Overview

Our Financial Markets and Products Group solves the legal and regulatory challenges confronting clients who participate in the U.S. securities and futures markets. With deep experience inside the federal agencies that regulate the financial markets, we offer effective compliance advice to help clients avoid regulatory pitfalls. And when regulators or private litigants come against a client, we help navigate the legal thicket, either by taking the case to trial or by negotiating a solution that protects the client’s larger interests.

We represent broker-dealers, proprietary trading firms, financial exchanges, alternate trading systems, futures commission merchants, investment advisers, clearing agencies, transfer agents, mutual fund independent directors, investment funds, accounting firms, and public companies. Our lawyers are active in all U.S. regulatory and financial centers, including Washington, New York City, Chicago, and San Francisco and the West Coast.

Knowing the Regulators

There are a handful of keys to our success. First, we know from the inside the federal agencies that regulate the financial markets. A number of our lawyers held senior positions at those agencies and were responsible for the same issues that confront our clients. For example:

  • Our securities lawyers include a former Director of what now is the SEC’s Division of Trading and Markets and a former Associate General Counsel and Regional Administrator for the SEC’s Division of Enforcement.
  • Our futures/derivatives lawyers include a former Chief Trial Attorney for the CFTC’s Division of Enforcement and a former General Counsel of the Chicago Mercantile Exchange.

 

In addition, as counsel for securities and futures exchanges, we assist exchanges in enforcing rules and disciplining members. This work requires that we think and act as regulators, a perspective that gives us special insights when representing regulated entities on compliance or enforcement matters.

Our lawyers’ experience as federal and industry regulators means that we know how regulators think and what will concern them. This understanding enables us to anticipate and prevent problems. If enforcement issues arise, we know what will work and what will not, putting us in the best position to negotiate a legal or regulatory solution when that meets our client’s goal.

Knowing our Clients

When we work with clients, we make sure to know their business goals so that legal strategy advances those goals. We also strive to understand the individual goals and pressure points facing the client’s inside counsel and key representatives. Our job is to support and help the inside counsel succeed as the client’s primary legal advisor.

This deep understanding of our clients leads to enduring relationships. For example, we were instrumental in 1973 in creating the Chicago Board Options Exchange (CBOE) and the regulatory framework that enabled the exchange-traded options industry to grow and flourish. Forty years later, we remain a trusted advisor highly involved in helping CBOE confront the regulatory and legal issues it faces. Our relationships with clients last because we are dedicated to them — both at the corporate and the individual level — and they know it.

Attention at the Highest Levels

Our clients receive the full attention of our most experienced lawyers whenever they need it. Of course, we work with our junior colleagues in order to solve problems in an efficient and cost-effective manner. However, we believe our most experienced lawyers should be directly involved in all appropriate aspects of addressing our clients’ challenges. Consistent with our commitment to creating enduring relationships, our senior lawyers are a constant and direct presence, not a remote presence in the background.

Core Strengths

Schiff Hardin is nationally known for its work concerning the regulation of the U.S. financial markets and products. Our core strengths include the following areas:

Derivatives and Trading
Our experience embraces both principal types of exchange-traded derivatives – i.e., options and futures. As counsel to CBOE since its creation and the corresponding birth of the exchange-traded option industry, we have been actively involved in options and options trading for longer than any other law firm in the world. Our lawyers have also been at the cutting edge of the regulation of futures markets, frequently representing some of the largest futures commission merchants in the country. Moreover, we represent many proprietary trading firms that regularly engage in sophisticated and often novel trading strategies employing options and futures, among other contracts. We have litigated when and whether these derivatives trading strategies may test legal limits. That same expertise is invaluable when complex trading strategies are challenged, particularly those that involve options or futures.  

Enforcement and Litigation
Enforcement proceedings by federal and industry regulators, and the class actions they trigger, can represent a fundamental threat to firms and individuals participating in the securities and futures markets. We have a long track record of successfully dealing with these challenges. Success comes from our deep understanding of the markets, the activities being challenged, and the regulators and their goals. We succeed also because we work hard to fully understand the client and its needs. We also are attentive to the effect an enforcement action will have on the private litigation that so often follows. Our enforcement and litigation experience covers a broad area of regulatory issues, including market manipulation, disruptive trading, insider trading, spoofing, false statement liability, improper sales practices, failure to segregate customer funds, failure to supervise, and anti-money laundering and anti-corruption (Foreign Corrupt Practices Act).

Regulatory Counseling and Compliance
For decades, Schiff Hardin has been one of the nation’s leading law firms in providing regulatory counseling to the securities and futures industries. That work now includes swaps and security-based swaps and the application of the Dodd-Frank Act. In all cases, our focus is not on fighting the last war, but on using our knowledge of the regulators to enable our clients to anticipate and plan for the regulatory challenges that lie ahead. Our mission is to help the client achieve its business goals while minimizing legal and regulatory risk.

Mutual Fund Governance
We serve as independent legal counsel for the directors and trustees of a number of mutual funds, including exchange-traded funds. We guide the directors and trustees in performing their “watchdog” role under the Investment Company Act of 1940. In particular, we advise them as they oversee the fund’s investment advisers and other service providers to the funds the board serves. We focus on analyzing and synthesizing the potentially overwhelming quantity of available information that bears on the board’s oversight responsibilities and on helping the board to be nimble and effective in evaluating potential new products, strategic relationships or proposals that may impact the funds and their shareholders.

Financial Markets Intellectual Property
We have been advising clients about intellectual property since the earliest disputes over electronic trading in the 1990s, helping brokerage firms, financial exchanges, and proprietary trading firms protect and monetize their intellectual property and defend against IP challenges. Our lawyers are known nationwide for their skill and strategy in navigating the challenges at the intersection of financial markets and intellectual property — litigating the most complex patent issues over electronic trading systems; advising clients about protecting their valuable licenses, trading strategies and algorithms, and market data; and using trade secrets, copyrights and patents to protect our clients’ technological innovations. We advise our clients on ways to maximize the opportunities afforded by intellectual property while preventing IP entanglements that can block the path to business success.

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Ripple secures first NY BitLicense for enterprise use of digital assets

Schiff Hardin’s Peter J. Kiernan guided Ripple through New York’s application process, nabbing the state’s first license issued for a financial institution use case. MORE

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Is opportunistic timing
of public company disclosures legal?

Since its adoption in 2000, SEC Rule 10b5-1 has been the subject of controversy. Partner Allan Horwich examines whether persons who created plans under this rule—and then time corporate disclosure to improve trading outcomes—have violated the law. MORE

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Disruptive trading and the search for wrongful intent

The new prohibitions of disruptive trading in the Commodity Exchange Act and in rules promulgated by the leading commodity exchanges require proof of scienter but, notably, no proof of actual market impact. If it is the “thought” that counts in this developing area of law, how will the scienter analysis proceed? More

New book features Ken McCracken on CFTC enforcement

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Schiff Hardin partner Ken McCracken, a former CFTC Chief Trial Attorney, comments on the CFTC enforcement process in a new financial regulation book geared toward compliance professionals. More

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Is the mosaic theory of materiality an illusion?

In Northwestern University's Law and Economics Series, Chicago partner Allan Horwich examines the uncertain contours of the mosaic theory of materiality in the context of insider trading, asking whether the theory offers meaningful--or merely illusory--protection. More

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CFTC steps up enforcement of false statement authority

The Commission has vigorously and repeatedly enforced the additional Dodd-Frank authority to prosecute false statements, on the basis of not only sworn testimony but also oral interviews and emails. We highlight the key issues requiring increased awareness by practitioners in every communication with the Commission. More