Securities Litigation

The SEC has gathered its guidance in a single location. Topics covered include:

(a) The SEC’s own Business Continuity Plan (“BCP”) and its implementation;
(b) Increased market monitoring and surveillance;
(c) Issuer guidance regarding COVID-related disclosures;
(d) Conditional exemptive orders for registrants, including investment companies and investment advisers, easing meeting and certain reporting requirements;
(e) Delaying certain open rulemaking proposals until April 24.

The Enforcement Division remains active, having implemented temporary trading suspensions of Aethlon Medical, Inc. and Eastgate Biotech Corp. over claims regarding purported coronavirus treatments. See Aethlon Medical, Inc., ’34 Act Rel. No. 88142 (Feb. 7, 2020); Eastgate Biotech Corp., ’34 Act Rel. No. 88265 (Feb. 24, 2020).

SEC’s COVID page is here.

FINRA has canceled conferences and continued in-person arbitration, mediation, and disciplinary hearings through May 1, 2020. Regulatory Notice 20-08 reminds registrants of their business continuity plan requirements under Rule 4370, the need to update contact information with FINRA and push out customer BCP notices. FINRA reminds registrants of their supervision requirements but notes the possibility of working remotely and similar solutions, without the need to file interim U-4 updates. FINRA cautioned about heightened cybersecurity risks with expanded remote operations. Reg. Not. 20-08 is here.

And FINRA’s COVID page is here. 

MSRB has explained its own BCP and reminded municipal market participants of their supervisory obligations, but noting that Rules G-27 and G-44 do not necessarily require in-person supervision and allow flexibility, so long as a registrant maintains a reasonable system of supervision reasonably designed to ensure compliance. See MSRB Notice 2020-07, here.

MSRB’s resource page is here.

FinCEN has asked reporting institutions to notify it if they have concerns about potential delays in Bank Secrecy Act (“BSA”) filings. FinCEN also warned institutions to be especially vigilant for COVID-related illicit behavior, noting observed trends of:
(a) Imposter Scams posing as government, NGO, or healthcare actors;
(b) Investment Scams;
(c) Product Scams, especially false health claims;
(d) Insider Trading.
FinCEN’s release is here.

CFTC has canceled its in-person March 19 Open Meeting (Rel. 8131-20) and issued two rounds of no-action relief from various recording and record-keeping requirements to facilitate remote operations for commodities, swaps, and derivatives markets registrants (Rels. 8132-20, 8133-20), here.