Access the profiles of the more than 350 Lowenstein Sandler lawyers who provide critical legal counsel to clients in virtually every sector of the global economy...
Discover the latest updates and developments about Lowenstein Sandler...
Access our insightful thought leadership, including articles, client alerts, and blog posts...
We guide broker-dealers through every aspect of their businesses. From formation, federal and state registration, and Financial Industry Regulatory Authority (FINRA) membership to transaction advice and day-to-day compliance matters, our broker-dealer lawyers provide comprehensive solutions for both U.S. and non-U.S. broker-dealers.
We are proactive in our advice, providing real-time regulatory updates whenever changes are on the horizon as well as concrete suggestions for compliance and implementation.
In Securities and Exchange Commission (SEC) and FINRA examinations, federal and state regulatory actions, and a wide variety of other enforcement matters, our broker-dealer lawyers, in conjunction with our leading enforcement defense litigators, prepare and defend clients to achieve effective solutions with minimal disruption to their businesses.
Services include:
|
Regulation Best Interest Resources
|
On October 24, 2022, Lowenstein Crypto, Rutgers Law, and the Wall Street Blockchain Alliance hosted a symposium entitled “Regulating Financial Innovation: The Future of Crypto and Blockchain,” that featured Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam discussing his agency’s role in regulating the fintech and crypto industries, the jurisdictional issues between the CFTC and the U.S. Securities & Exchange Commission( SEC), and pending legislation aimed at clarifying whether cryptocurrencies are commodities or securities. Fortune reports that Benham “sought to dispel the narrative of a turf war between his agency and the Securities and Exchange Commission. ‘It’s a pretty cynical view to suggest two agencies can’t figure it out and work together,’ he said to an audience of lawyers and industry leaders.” Benham did acknowledge a difference of opinion between him and SEC Chair Gary Gensler on the classification of the cryptocurrency Ether, but he stated that “the CFTC and SEC would continue to work together, pointing to the two agencies’ track record of collaboration, such as with the development and evolution of security futures.”
Benham denied that CFTC would be more favorable in enforcement actions towards crypto than the SEC, saying: “Our enforcement record speaks for itself.” He did note that his agency’s current limited oversight and resources prevented it from doing more to stop fraud in the crypto industry, adding that if Congress removed the CFTC’s "handcuffs…we could bring more fraud and manipulation to light.”
In addition to Behnam’s remarks, the event included a panel moderated by Lowenstein partner Ethan L. Silver; co-Chair of Lowenstein Crypto and Chair of the firm’s Broker-Dealer and FinTech practices, on Managing Regulatory Risk, that addressed compliance challenges and risks faced by fintech firms and the crypto asset industry as well as the multi-level regulatory landscape in the U.S. Partner Christopher W. Gerold, former Chief of the New Jersey Bureau of Securities and president of NASAA, hosted a panel on Challenges of Financial Innovation that examined new approaches to financial innovation, the impact of federal regulation, and potential statutory and regulatory reforms.
Law360, Bitcoinist, Coindesk, Dailycoin, Coinspeaker, Yahoo!/Yahoo! Finance, The Block, Insider, Coingeek, and Investing.com also covered the event.
Law.com interviews Michael G. Gordon on how being mentored, and mentoring others, has positively impacted his career. “The role of a mentor is something you surely set out to take, and doing so produces rewards more than one can imagine,” says Gordon, who is being honored by the New Jersey Legal Awards for his contributions as a Mentor and Advisor at Seton Hall, where he mentors countless undergraduate and law students, and serves as the Founder of its Minority Pre-Law Organization. “Having such a strong mentor [as Professor Denis McLaughlin from Seton Hall Law School] helped me realize the value of mentorship and instilled in me the passion to give back and pay it forward. I knew there were so many students just like me who may have been interested in the law, but who had no idea how to start along the right path, how to excel in law school, and how to be the best attorney one can be.” He adds: “It all makes it worthwhile when, years later, my students still stay in touch and keep me abreast of their lives, both personally and professionally.”
Christopher W. Gerold, partner in Lowenstein’s Securities Litigation, Blockchain Technology & Digital Assets, and Corporate Investigations & Integrity practices and former chief of the New Jersey Bureau of Securities, talks to MarketWatch about a rise in lobbying by cryptocurrency companies in anticipation of increased government regulation. Gerold says: “When we see bigger, broader legislation introduced, we’re going to see money pour into the lobbying space from crypto companies, and rightfully so. If the wrong legislation passes, it could put certain companies out of business.” He adds, “It’s really a hyper technical area, as the regulators define different entities and protocols in the digital asset space.” The article is also available on Crypto News BTC.
Christopher W. Gerold's new role as partner in the firm’s Securities Litigation group was reported by Law.com, Law360, Bloomberg Law, ROI-NJ, Spot on New Jersey, and NJBIZ. Gerold tells Law.com that “Regulators are still responding to [the cryptocurrency market]. I expect that will be a large part of my practice, as well as the more traditional securities cases.”
In an HFM article on the increasing popularity of hybrid public/private funds, partner Benjamin Kozinn of the Investment Management group discusses how to structure these funds and their fees, as well as how to mitigate compliance risks. “One approach is to have opt-in opt-out structures where the investor elects whether they want to allocate a portion of their capital (e.g., 10%, 20%) to privates. In the opt-in/out model, whether you actually invest in privates becomes a function of how many people opted in or opted out,” Kozinn says. He adds that one common approach with these funds is to charge a lower management fee and a higher incentive fee: “Maybe you don’t have to worry about portfolio risk management every day as you would with public markets, but the costs and the complexity of private investments can be higher than public investments.” Kozinn also warns of possible MNPI (Material Nonpublic Information) issues with these structures: “If a private company you are invested in is getting bought by a public company, or it is entering into a significant commercial arrangement with a public company, the manager is potentially walking into MNPI problems if you don’t have a physical separation and appropriate information barriers between the private and public investment teams.” (subscription required to access article)
In The Hill, Ethan L. Silver addresses the patchwork of federal regulation of cryptocurrency, where the Treasury Department oversees its taxation and compliance with anti-money laundering rules, the SEC and the Commodity Futures Trading Commission each has jurisdiction over different investment offerings, and no federal agency at all regulates the spot cryptocurrency exchange rate. “While it’s novel, it’s incumbent on those regulators to understand it because this stuff is not going away,” he says.
Hedge Fund Law Report interviews Boris Liberman, partner in Lowenstein’s Investment Management group, about his recent move to the firm from AQR Capital Management LLC, where he served as Senior Counsel. Liberman brings to Lowenstein his deep experience advising U.S. and international hedge funds, mutual funds, managed accounts, sovereign wealth funds, and other asset owners on all aspects of implementing their investment and trading strategies. He predicts that in the next two years, “a much larger number of buy-side entities will be in scope of the (regulatory initial margin) framework and will need to be in compliance if they want to continue with their OTC trading activity.”
Ethan L. Silver, Chair of the firm's Broker-Dealer practice, comments in Law360 on the Securities & Exchange Commission’s (SEC) proposed exemptions that would allow unregistered “finders” to be compensated for private fundraising activities. Silver says that finders not subject to broker-dealer compliance regulations might be difficult to manage, while “registered broker-dealers, on the other hand, are expected to behave in compliance with regulations because of the threat of an exam, the regulator coming in and examining you, or a supervisor or manager holding you accountable for your behavior.”
Boris Liberman's arrival to Lowenstein Sandler as a partner in the Investment Management group is noted in Bloomberg Law, General Counsel News, The Daily Docket, and Law.com (New York Law Journal). View Lowenstein's news announcement about Liberman's arrival to the firm.
Benjamin Kozinn recently participated in a webinar on valuation presented by the Hedge Fund Law Report; its points are summarized in this article. Kozinn comments on valuation challenges; valuation frequency, processes, and governance; valuation committees and third-party valuation agents; and the impacts of the coronavirus pandemic on valuation. He notes that “the effect of the coronavirus pandemic has been relatively mild [on asset valuation]. … Market disruptions have been fairly short-lived. Advisers have been revisiting their valuation policies and speaking with their auditors.”
Ethan L. Silver comments in Regulatory Compliance Watch on the SEC’s Form CRS, including the importance of documenting date of delivery, as well as the focus of the responses. The article recommends Lowenstein’s “Form CRS Drafting Guide and Template” as a source of further information. (subscription required to access article)
William Brannan is quoted in Law360 and cryptonews, where he provides an analysis of Telegram’s $1.7 billion digital token sale of Grams and the need for regulatory clarity for early stage companies in the digital asset and blockchain space. (subscription required to access article)
Ethan L. Silver is quoted in The Wall Street Journal discussing concerns by the Securities and Exchange Commission surrounding digital-securities firms and their ability to safeguard investors’ funds and assets. (subscription required to access article)
Ethan L. Silver was featured in both American Banker and Interactive Investor, commenting on the US Securities and Exchange Commission’s (SEC) reticence to approve new cryptocurrency, despite encouraging more discussion. Silver states that: “the practical realities are that there has been a lot of meetings and discussions that have yielded little progress." He agrees with SEC Commissioner Hester Peirce that the Howey Test – used by US regulators to determine what should be considered a security – is “overly broad.” Silver asserts that until the SEC provides clarity on how digital assets should be custodied under its existing rules, a bitcoin exchange-traded fund (ETF) will never be approved.
Ethan L. Silver is quoted in CoinDesk, CoinWire, Invest in Blockchain, and XBT.net regarding the U.S. government shutdown’s effect on cryptocurrency progress on Wall Street. Silver anticipates that, should the shutdown continue, any remaining staffers would most likely reject the rule change proposal for the highly anticipated exchange-traded fund, in lieu of allowing it to be approved on a technicality.
Ethan L. Silver is quoted in InvestmentNews addressing cryptocurrency market manipulation and custody as it relates to the possibility of a crypto-ETF entering the market in 2019. Silver states that the challenge for the SEC is how to integrate this new technology into the existing SEC rules.
