Securities and Futures Regulation
Schiff Hardin is proud to have nationally recognized expertise in securities and futures regulation.
Distinctive and Distinguished Practice
Our securities and futures regulation team is respected throughout the securities and futures industries, and represents a broad range of clients involved in the formation, distribution, trading, advising and transfer of securities and futures products and services. Our attorneys have provided counsel to many broker-dealers and futures traders and to the Chicago Board Options Exchange and Chicago Stock Exchange over the years, as well as to investment advisers, mutual fund complexes, hedge funds, private equity funds, variable insurance product developers and transfer agents.
In addition to a comprehensive understanding of the equities and debt markets, we have spent years helping industry leaders create and trade on a global basis the most widely used derivative instruments, from standardized options (we were instrumental in the birth of these instruments at the Chicago Board Options Exchange and The Options Clearing Corporation) to over-the-counter derivatives and exchange-traded futures. We counsel markets, trading firms, investment managers, mutual funds, hedge funds and their directors, and corporate issuers and their officers and directors with respect to their obligations under the complex web of laws and regulations governing use of these instruments.
We have a reputation for "outside the box" creative thinking in securities and futures regulatory matters and for bringing about desired results.
Our attorneys have several decades of combined service at the Securities and Exchange Commission (SEC). They include a former Director and former Senior Associate Director of the Division of Market Regulation (now the Division of Trading and Markets), as well as other attorneys from that Division, a former Associate General Counsel and Regional Administrator for the Division of Enforcement, and a former Assistant Chief Litigation Counsel for the Division of Enforcement, and other attorneys from the General Counsel's Office. Our futures regulation attorneys include a former General Counsel of the Chicago Mercantile Exchange. Members of the team maintain continuing relationships with key staff of the SEC, the Commodity Futures Trading Commission (CFTC), the Board of Governors of the Federal Reserve System, the Financial Industry Regulatory Authority (FINRA), and the other self-regulatory organizations (SROs).
We counsel the following entities on all aspects of their operations, including federal and state regulatory requirements and the rules of SROs.
- Major, full-service broker-dealers
- Equity and options market making units
- Retail broker-dealers
- Securities markets
- Electronic and Internet-based trading systems
- Transfer agents
- Investment advisers
- Hedge funds
- Futures firms
Among other things, we have assisted securities firms (including broker-dealers, investment companies and investment advisers), as well as several securities exchanges, in fashioning and administering their compliance programs.
We have been on the leading edge of securities regulation law as it has evolved. We continue to play a major role in the development of the options markets through our representation of the Chicago Board Options Exchange. Several years ago, we played a significant role in the legislation and rulemaking that led to the introduction of single stock futures. We also have been heavily involved in the development and administration of several National Market System Plans over the years.
In addition, our lawyers deal regularly with the SEC examination and enforcement staff in the Washington, D.C. and regional offices, as well as with examination and enforcement staff of SROs, on a wide range of matters. We have recently represented, or presently represent, entities and individuals in matters concerning:
- Broker-dealer and investment adviser registration issues
- Sales practices
- Trading issues
- Accounting issues
- Market integrity issues
We also have recently represented, or presently represent, public companies and their officers and directors in:
- Accounting investigations
- Insider trading inquiries
- Antifraud inquiries based on public filings and statements
- Accounting practices and financial statements
- Matters involving securities registration requirements
Our lawyers have hands-on experience in dealing with securities enforcement matters, both from a defense perspective and from the government point of view. We have found that the experience gained from government service and the credibility we have established in dealings with regulators are invaluable when seeking solutions to client regulatory or enforcement problems. This credibility with regulators was evidenced by the appointment over the past several years of Schiff Hardin partners as independent monitors in connection with the implementation of the settlements of three separate major SEC enforcement actions.
Securities and Futures Regulation Services
Our securities and futures regulation team provides a broad range of legal representation to clients in the securities and futures markets and related industries, including advice with respect to:
- SEC and CFTC regulatory matters
- Compliance with New York Stock Exchange, FINRA, National Futures Association, and other SRO rules, including the review and preparation of compliance manuals for clients
- Broker-dealer, alternative trading system and investment adviser registration
- National Market System plans
- Investment company compliance, governance and regulation
- Analysis of securities and commodities legislation and rulemaking
- Disclosure issues
- Derivatives and hedging activities and documentation
- Sales practice and order handling questions issues and enforcement actions
- New product development
- Net capital and margin issues
- Investment adviser compliance issues
- Development and distribution of variable insurance products
- Issues presented by online securities activities
- Issuer activities in their own securities
- Stock lending
- Foreign Corrupt Practices Act (FCPA)
- Anti-Embargo Act
- Clearing firm regulation
- Business continuity planning
- Anti-money laundering programs
- Public offerings and private placements
- Prime broker arrangements
- Outsourcing arrangements
- Mergers and acquisitions of financial service companies
- Intellectual property issues of interest to participants in the securities and futures markets, including issues with respect to rights in market data, rights of index owners and business method patents
- License agreements, software development agreements and technology transfer agreements
Dodd-Frank 'Whistleblower' Defense
Among the many reforms enacted in the Dodd-Frank Act, Congress opened the door to myriad claims by "whistleblowers." They can receive substantial "bounties" (no less than 10% and as much as 30% of what the SEC and other agencies actually collect in enforcement actions where more than $1 million is recovered), for informing the SEC about alleged violations of the securities laws, including corporate wrongdoing. Dodd-Frank also strengthened the remedies available to a whistleblower who contends that there was retaliation by his employer.
Important to note — whistleblowing covers a wide range of potential claims. While much of the press commentary on whistleblowing has focused on reporting wrongdoing by public companies and how that impacts corporate compliance policies, whistleblowing issues can arise out of any violation of the securities laws. The potential for a report to the SEC extends to non-public companies as well as securities professionals.
Schiff Hardin can provide multi-disciplinary assistance to any company or person whose conduct is in any way covered by the federal securities laws and who may be the target of a Dodd-Frank Act whistleblower claim. These include our White Collar Crime and Corporate Compliance, Securities and Futures Regulation, Securities Litigation, Corporate and Securities, Public Companies and Labor and Employment groups.
Our assistance includes:
- Education — Our lawyers regularly publish on the Dodd-Frank Act. We also can provide in-house training/briefing programs on the requirements of the Act.
- Prevention — Our Corporate Compliance services assist clients in managing risks by preventing and discovering misconduct before it is reported to the SEC, formulating an appropriate internal remedial action to best position our clients to address potential Dodd-Frank Act whistleblower claims. These services include preparing compliance policies and programs and conducting internal investigations.
- Counseling — Our Corporate Compliance services also assist clients in protecting the client from a claim of retaliation against a whistleblower.
- Litigation — When litigation becomes the only option, Schiff Hardin's vast, multi-disciplinary experience and depth is available to vigorously defend against SEC enforcement actions and any underlying whistleblower claims.