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Steven Lofchie is a Partner based in New York. He advises financial institutions and corporate clients on the securities laws and the Commodity Exchange Act, with particular focus on the regulation of broker-dealers, swap dealers, investment funds and other market intermediaries. Steven's transactional practice focuses on securities credit and derivative transactions.

Recent Articles & Comments

SIFMA and ISDA Submit Comments on Cost Benefit Analysis in Response to CFTC Request

The District Court's original opinion in favor of the CFTC was not persuasive. See D.C. District Court Issues Opinion on SIFMA v. CFTC Cross-Border Guidance Case (with Lofchie and Zwirb Comments) (September 16, 2014). A second read shows that that decision is still too gentle. Perhaps by making their case in comments before a wider forum, the parties will effect some long-term benefit.

Senator Proposes Bill to Dissolve "Too Big to Fail" Financial Institutions
The proposed bill does not specify that the required breakup is limited to financial institutions. Although the preamble to the bill refers to "financial entities" (a term not defined in the bill), it does define an entity as "too big to fail" if the entity's failure, "due to its size, exposure to counterparties, liquidity position, interdependencies, role in critical markets, or other characteristics or factors would have a catastrophic effect on the stability of either the financial system or…
Finance Professor Calls CFTC Allegations That Nav Sarao Caused Flash Crash "Outrageous"
Based on the material presented to date, it seems unlikely that the CFTC will be able to demonstrate any link, let alone causation, between Nav Sarao's trading (even if illegal) and the Flash Crash. At best, the CFTC's assertions seem an argument of the "butterfly effect"; that Mr. Sarao's flapped his wings (or flipped his orders) causing ripples leading to a flood of ensuing events. In some philosophical sense, it may be true that every event in the world contributes to every other, but it is…
CFTC Publishes Appendix to Motion against Nav Sarao
The CFTC's allegations against Mr. Sarao raise two separate but related questions: (i) did Mr. Sarao trade in a manner that was illegal and (ii) did his trading contribute to the Flash Crash in any meaningful way? Assuming that Mr. Sarao's trading was improper, nothing in Mr. Hendershott's deposition seems remotely persuasive regarding the second question.   Mr. Hendershott first states that the Layering Algorithm "contributed" to the order book balances and market conditions. In a…