NYU Law professor Samuel Estreicher and 2L Samuel Ball discuss the SEC’s new Rule 10D-1, which requires securities exchanges to mandate that listed companies adopt policies to recover erroneously awarded executive compensation in the event of an accounting restatement. Professor Estreicher and Mr. Ball explain how the new rule expands the scope of clawbacks compared to previous regulations and shifts the responsibility for implementing them from the SEC to the companies themselves, with the goal of improving compliance and avoiding potential legal challenges.
Cornell Law professor Michael C. Dorf comments on the pending U.S. Supreme Court case SEC v. Jarkesy, which questions the constitutionality of administrative law judges (ALJs) in the SEC and their role in enforcing securities laws. While Professor Dorf believes the Court should reject all three constitutional challenges presented in the case, he suggests that if the Court does rule against the government, the least disruptive outcome would be based on the removal issue rather than the Seventh Amendment or nondelegation claims.
BU Law emerita professor Tamar Frankel discusses the Securities and Exchange Commission (SEC)’s Regulation Best Interest (BI), which imposes on broker-dealers a commitment to act in the best interests of their clients. Specifically, Frankel addresses the SEC’s treatment of client waivers of the Regulation BI, which goes even further than general fiduciary law to prohibit any waiver of the broker-dealer’s conflicting interests.
BU Law emerita professor Tamar Frankel discusses an emerging issue affecting financial advisers—when a client may exercise control over the actions of the adviser. Frankel relates the story of an investment adviser that did not follow the client’s orders to cease certain investments, at a cost of almost $5 million to the client. As Frankel explains, the Securities and Exchange Commission (SEC) got involved, resulting in the investment adviser’s settlement for a significant payment to the client and other conditions.
Boston University law professor Tamar Frankel comments on the increased use in “robo-advisers”—machines that purport to offer investment advice and order the performance of their advice by securities trades. Frankel describes how the Securities and Exchange Commission has responded to the rise in robo-advisers and summarizes some of the legal challenges they present, particularly when used by brokers and by financial advisers.
