Practice/Industry Group Overview
Sutherland defends securities and accounting clients in exams, investigations and litigation involving the SEC, FINRA, other self-regulatory organizations, states and private parties.
Sutherland defends broker-dealers, investment advisers, public companies, accounting firms and individuals in securities exams, investigations, enforcement actions, arbitrations and related securities litigation, including class actions. With a comprehensive understanding of the financial regulatory landscape and an appreciation of our clients’ business needs, we know what it takes to make cases go away—whether that means shutting cases down early, negotiating reasonable settlements or litigating.
We represent clients in investigations by federal or state civil or criminal authorities and self-regulatory organizations (SROs), and undertake internal investigations for clients on behalf of audit committees, boards of directors, and other corporate clients. We also handle white collar defense. We know that at times it pays to litigate, and we have extensive experience litigating against the regulators as well as trying federal and state cases, arbitrations and class actions. Our nationally recognized enforcement and litigation practice typically works with our financial services regulatory colleagues to counsel broker-dealers, investment advisers and other regulated businesses on regulatory compliance issues.
Sutherland's team includes attorneys who have served as senior counsel at the SEC, FINRA and the Department of Justice (DOJ). Consequently, we know how the regulators approach examinations, investigations and litigation, enabling us to see potential pitfalls. Our attorneys appear before the SEC, FINRA and other SROs as well as state regulators’ offices throughout the country. We also litigate in federal and state courts nationally.
Full range of services. We offer complete legal services, including advice and support during federal and state regulatory compliance examinations; internal investigations; defense and guidance during civil and/or criminal investigations; vigorous representation in arbitrations, as well as in self-regulatory, administrative, civil, and criminal proceedings, trials and appeals.
We understand regulators. Many of our attorneys were at one time senior counsel with the SEC, NASD/FINRA and the DOJ. This gives us exceptional insight into the concerns of regulators and enables us to assist clients in dealings with regulators in ways few others can.
Extensive agency experience. We have extensive knowledge of federal and state administrative agencies and can provide our clients with advice particular to each agency, regulator and office. In addition, we are prepared to litigate when reasonable solutions are not possible or when bet-the-company matters arise.
Internal investigations. Our attorneys work with clients to develop and prepare appropriate reports for audit committees, corporate boards, counsel and regulators in connection with internal investigations.
State-level expertise. Our experience provides us with depth and understanding of state regulatory agencies—and helps us conceive and implement strategies that lead to effective and efficient solutions. Sutherland attorneys are involved daily in enforcement matters. We know the rules and what hot issues are on the minds of state regulators.
Proactive advice. Preventing problems is always easier than solving them. We work with our financial services regulatory colleagues to help clients establish effective compliance programs.
Nuts and Bolts
Our experience includes matters in the areas of:
- variable products
- alternative investments, including Regulation D investments and non-traded REITs
- Suitability Rule and Know Your Customer Rule
- sales practice issues (including churning and unauthorized trading)
- insider trading
- books and records
- gifts and gratuities
- non-cash compensation
- 529 Plans
- selling away and outside business activities
- municipal securities
- unregistered offerings
- market manipulation
- chief legal officer/chief compliance officer liability
- financial reporting and accounting
- asset management
- market abuse
- government contracts/procurement
- money-laundering (criminal and administrative)
- directed brokerage/revenue sharing
- market timing and late trading
- commercial bribery/kickbacks
- Foreign Corrupt Practices Act (FCPA), including parallel investigations by foreign governments
When clients need to respond to regulatory scrutiny, conduct an internal investigation, or defend civil actions, Sutherland’s experienced Securities Enforcement & Litigation practice is ready to take the lead.
Negotiated a favorable eleventh-hour settlement for a broker-dealer and investment adviser on the eve of trial against the SEC involving valuation issues.
Negotiated a settlement on the eve of trial for a broker-dealer and investment adviser involving the SEC, FINRA and a consortium of states. The settlement resolved administrative proceedings against the client involving the sales of mutual funds. The settlement included significantly reduced charges and a fine substantially less than what the regulators originally demanded.
Served as nationwide counsel for an independent broker-dealer in a series of related regulatory matters, class actions and arbitrations concerning Regulation D offerings and other alternative investments.
Served as nationwide counsel for a major independent broker-dealer in a large number of related regulatory matters, class actions and arbitrations concerning Regulation D offerings, non-traded REITs, and other alternative investments, including product due diligence, suitability, and supervision issues. We successfully litigated and settled actions brought by national and state regulatory authorities, as well as private litigation, arbitrations and mediations.
Convinced the SEC, FINRA, a state securities commission and the U.S. House of Representatives Committee on Education and Labor to close investigations into a broker-dealer and insurance company's revenue sharing and marketing payments.
Represented a broker-dealer and its affiliated insurance company in investigations of revenue sharing and marketing payments by the SEC, FINRA, a state securities commission and the U.S. House of Representatives Committee on Education and Labor. The investigations lasted more than three years. After extensive briefings, meetings, testimony and negotiations, we convinced each entity to close its investigation without action.
Articles Authored by Lawyers at this office:
DOL Issues Additional FAQs Related to New Fiduciary Rule
Eric A. Arnold,Wilson G. Barmeyer,Bruce M. Bettigole,Nicholas T. Christakos,Adam B. Cohen,Thomas W. Curvin,Olga Greenberg,Dodie C. Kent,Clifford E. Kirsch,Michael B. Koffler,Susan S. Krawczyk,Ben Marzouk,Carol T. McClarnon,Michael R. Nelson,S. Lawrence Polk,Stephen E. Roth,Brian L. Rubin,Vanessa A. Scott,Cynthia R. Shoss,Holly H. Smith,W. Mark Smith,Phillip E. Stano,Steuart H. Thomsen,Gail L. Westover,Allison E. Wielobob,Mary Jane Wilson-Bilik, January 20, 2017
The Department of Labor (DOL) has released two additional sets of FAQs providing guidance related to its final rule expanding the definition of fiduciary “investment advice” (the Final Rule) for purposes of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
Plaintiffs Have Come Up Empty on Class Action Slack Fill Litigation But Are Expected to Pick It Up in 2017
Brittany M. Cambre,Sarah Q. Chaudhry,Melissa A. Conrad-Alam,Michael R. Nelson,Meghana D. Shah,Ronald W. Zdrojeski, January 19, 2017
Complaints regarding the amount of product contained in a particular package appear to be the new battlefront on which plaintiffs are waging war on a wide range of consumer product manufacturers. The lawsuits are spurred by a set of regulations, issued by the U.S. Food and Drug Administration (FDA)...
NY DFS Publishes Revised Proposed Cybersecurity Rules for Financial Services Companies
Mark D. Herlach,John S. Pruitt,Stephen E. Roth,Cynthia R. Shoss,Phillip E. Stano, January 02, 2017
On December 28, 2016, the New York Department of Financial Services (the DFS) published a revised proposed cybersecurity regulation (the Revised Regulation) for further public comment. First published in September 2016, the Revised Regulation is a culmination of three years of work by the DFS to...
NAIC Report: 2016 Fall National Meeting
B. Scott Burton,Ling Ling,Michael R. Nelson,John S. Pruitt,Stephen E. Roth, December 30, 2016
The National Association of Insurance Commissioners (NAIC) held its 2016 Fall National Meeting December 10-13. Despite the glitzy setting at the Fontainebleau Hotel in Miami Beach, there were no splashy new developments—save the announcement of the appointment of Michael Consedine as NAIC...
Enhanced Cyber Risk Management Standards Announced in Joint Rulemaking Initiative by Treasury, Federal Reserve, and FDIC
Mark D. Herlach,John S. Pruitt,Stephen E. Roth,Cynthia R. Shoss,Phillip E. Stano, December 29, 2016
On October 19, 2016, the three major federal banking regulators announced a joint advance notice of proposed rulemaking (ANPR) for enhanced cyber risk management standards (Enhanced Standards) for large and interconnected federally regulated financial institutions and their third-party service...
NAIC Adopts Revisions to Actuarial Guideline 49
Eric A. Arnold,Frederick R. Bellamy,Thomas E. Bisset,Dodie C. Kent,Clifford E. Kirsch, December 19, 2016
On December 13, the National Association of Insurance Commissioners (NAIC) Executive (EX) Committee and Plenary adopted revisions to Actuarial Guideline 49 (AG 49) with an effective date of March 1, 2017. The revisions apply AG 49’s standards for determining the maximum annual rate of...
Seller Beware? Rise of Consumer Class Actions Under New Jersey’s TCCWNA Statute
Kymberly Kochis,Francis X. Nolan,Lewis S. Wiener, December 16, 2016
Nearly 35 years ago, New Jersey enacted the Truth-in-Consumer Contract Warranty and Notice Act (TCCWNA, pronounced “tic-wun-uh”), which provides additional protection for individual consumers who suffer harm as a result of unfair sales and advertising practices. A consumer can bring a...
Amendment to Criminal Procedure Rule 41 Impacts Data Privacy in U.S. and Abroad
Mark D. Herlach,Francis X. Nolan,Robert D. Owen,Phillip E. Stano,Mary Jane Wilson-Bilik, December 06, 2016
On December 1, 2016, amended Rule 41 of the Federal Rules of Criminal Procedure (FRCP) went into effect, thus expanding federal law enforcement’s power to search and seize electronic data. The new rule will allow law enforcement to seek a warrant from a “magistrate judge with authority...
Off the Grid: TCPA Class Action Settlement for Energy Utility Company
Thomas M. Byrne,Juan C. Garcia,Patricia A. Gorham,Phillip E. Stano,Rocco E. Testani, December 06, 2016
Utility companies continue to face ongoing litigation under the Telephone Consumer Protection Act (TCPA) that can arise from the use of automated communications with customers for purposes of marketing, customer servicing and collections. Recently, a New York federal court granted preliminary...
TCPA Hazards Abound Following Busy Month for the FCC
Thomas M. Byrne,Juan C. Garcia,Phillip E. Stano,Rocco E. Testani,Lewis S. Wiener, November 30, 2016
On November 16, 2016, the Federal Communications Commission (FCC) issued a final rule regarding the treatment of debt servicing and collection calls made by or on behalf of the federal government under the Telephone Consumer Protection Act (TCPA). The rule, a result of the Bipartisan Budget Act of...
CFPB: Consider the Future Post-Obama
Brian Barrett,Thomas M. Byrne,Kymberly Kochis,Lewis S. Wiener, November 23, 2016
The election of Donald Trump and the new administration means a changed political reality for the Consumer Financial Protection Bureau (CFPB). The President-elect is expected to replace Director Richard Cordray as head of the CFPB soon after taking office. Looking further ahead, the Republican...
Thomas M. Byrne,Juan C. Garcia,Phillip E. Stano,Rocco E. Testani,Lewis S. Wiener, November 23, 2016
The outcome of the 2016 presidential election has left many prognosticators scrambling to figure out the policy implications of the incoming Republican change in administration. Among countless other things, companies affected by the Telephone Consumer Protection Act (TCPA) should consider whether...
Cybersecurity Certifications Now Required to Access Death Master File
Wilson G. Barmeyer,Robert D. Owen,Phillip E. Stano,Steuart H. Thomsen,Mary Jane Wilson-Bilik, November 14, 2016
Tough cybersecurity certification requirements for parties seeking access to certain information in the Social Security Death Master File (DMF) take effect on November 28.
Impaired Access: ADA Website Accessibility Lawsuits On the Rise
Alexander P. Fuchs,Lewis S. Wiener,Amy Xu, November 14, 2016
An increasing number of class action lawsuits have been filed over the past year against private companies by individuals alleging violations of the Americans with Disabilities Act (ADA) for failure to maintain websites that are accessible to the blind and visually impaired. Since early 2015,...
FINRA, SEC Renew Focus on Senior Investors in Immediate Aftermath of FINRA Submission of Proposed Rulemaking to SEC
Bruce M. Bettigole,Clifford E. Kirsch,Brian L. Rubin,Sarah Razaq Sallis,Holly H. Smith, October 25, 2016
On October 22-23, members of the securities industry, academia, regulators, and public policy experts gathered in Washington, D.C., at the joint Financial Industry Regulatory Authority (FINRA) and Securities Industry and Financial Markets Association (SIFMA) Senior Investor Protection Conference....
CFPB Single-Director Structure Unconstitutional: CFPB Director Now Serves at President’s Will
Thomas M. Byrne,Matt Gatewood,Kymberly Kochis,Lewis S. Wiener, October 14, 2016
A divided panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled October 11, 2016, that the current structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional. The court concluded that an independent agency such as the CFPB cannot have a single director...
Reverse the Charges: Challengers Push Forward in Appeal of 2015 TCPA Order, Oral Argument Set for October 19
Thomas M. Byrne,Juan C. Garcia,Phillip E. Stano,Rocco E. Testani,Lewis S. Wiener, October 14, 2016
n July 2015, the Federal Communications Commission (FCC) issued a much-anticipated Declaratory Ruling and Order aimed at clarifying certain aspects of the Telephone Consumer Protection Act (TCPA). As previously reported, more than a dozen parties filed appeals to the Order, claiming that it did...
STOLI Scheme Saved By Expiration of Contestability Clause
Wilson G. Barmeyer,Kristine M. Ellison,Phillip E. Stano,Steuart H. Thomsen,Gail L. Westover, October 05, 2016
On September 22, the Florida Supreme Court in Wells Fargo Bank NA v. Pruco Life Insurance Co., No. SC15-382 (Fla. Sept. 22, 2016) denied Pruco Life Insurance Company’s challenge to the validity of an insurance policy purchased under a stranger-originated life insurance (STOLI) scheme because...
NY DFS Announces Proposal for Cybersecurity Rules for Financial Services Companies
Mark D. Herlach,John S. Pruitt,Stephen E. Roth,Cynthia R. Shoss,Phillip E. Stano, September 22, 2016
On September 13, 2016, New York Governor Andrew Cuomo announced a proposal by the New York Department of Financial Services (the DFS) of a rule that establishes cybersecurity requirements for financial services companies regulated by the DFS (the NY Regulation). The NY Regulation is the culmination...
SEC Adopts Changes to Form ADV and Books and Records Rules
Eric A. Arnold,Clifford E. Kirsch,Michael B. Koffler,Susan S. Krawczyk,Holly H. Smith, September 19, 2016
On August 25, the Securities and Exchange Commission (the SEC) adopted amendments to Form ADV Part 1 that will require SEC-registered investment advisers to provide a significant amount of new information.1 The SEC adopted these amendments to Form ADV to improve the depth and quality of information...
Cruise Ships Miss the Boat on TCPA Compliance to the Tune of Up to $76 Million
Thomas M. Byrne,Juan C. Garcia,Phillip E. Stano,Rocco E. Testani,Lewis S. Wiener, September 16, 2016
With a trial looming like storm clouds on the horizon, several cruise ship companies and their affiliated travel agencies settled a “robocall” Telephone Consumer Protection Act (TCPA) class action up to $76 million. The settlement, announced on September 8, 2016, was reached just weeks...
Lumber War May Be Imminent
Mark D. Herlach,Gregory S. Kaufman,Allison E. Speaker,Ryan R. Weiss, September 16, 2016
Negotiations to keep the peace in the complex and long-running international trade dispute between the United States and Canada over U.S. imports of Canadian softwood lumber appear to have stalled. Parties on both sides of the border are preparing for another round of import relief actions, which...
NAIC Task Force Releases Revised Draft Insurance Data Security Model Law
Mark D. Herlach,John S. Pruitt,Stephen E. Roth,Cynthia R. Shoss,Mary Jane Wilson-Bilik, August 30, 2016
On August 17, the National Association of Insurance Commissioners (the NAIC) Cybersecurity (EX) Task Force (the Task Force) released for comment a revised draft Insurance Data Security Model Law (the Model Law). This Model Law purports to “establish exclusive standards . . . for data security...
Ten Things You Should Know About the 2016 Uniform Unclaimed Property Act
Wilson G. Barmeyer,Holly H. Smith,Phillip E. Stano,Steuart H. Thomsen,Mary Jane Wilson-Bilik, August 11, 2016
The 2016 Uniform Unclaimed Property Act (2016 Act) was adopted unanimously by the Uniform Law Commission (ULC) in a 49-0 vote at its 2016 summer meeting. The adoption of the revised model law is a significant step forward for the new 2016 Act, which has been under development by the ULC for more...
White House Issues Guidance Advising Agencies to Assess Climate Change in NEPA Reviews
Reginald J. Clark,Jay Holloway,Susan G. Lafferty,Peter Ligh,David M. McCullough, August 11, 2016
On August 1, the White House Council on Environmental Quality (CEQ) issued its final guidance for federal agencies on considering greenhouse gas (GHG) emissions and the effects of climate change in National Environmental Policy Act (NEPA) reviews.1 This final guidance comes after the first draft...
Three Million Reasons to Understand the New Federal Rules: Deleting Emails Results in Multi-Million-Dollar Rule 37(e) Sanction
Francis X. Nolan,Robert D. Owen,Jim L. Silliman,Phillip E. Stano, August 02, 2016
On July 12, a federal district court imposed a $3 million punitive sanction pursuant to the recently amended Federal Rule of Civil Procedure 37(e). GN Netcom, Inc. v. Plantronics, Inc., No. CV 12-1318-LPS, 2016 WL 3792833 (D. Del. July 12, 2016). The sanction was imposed on a corporate defendant...
NAIC Life Insurance and Annuities (A) Committee Adopts Revisions to Actuarial Guideline 49
Eric A. Arnold,Frederick R. Bellamy,Thomas E. Bisset,Dodie C. Kent,Clifford E. Kirsch, August 01, 2016
On July 27, 2016, the Life Insurance and Annuities (A) Committee adopted revisions to Actuarial Guideline 49 (AG 49) to address situations where indexed universal life (IUL) insurance policies make available multiple index account options with different account charges (the dual account issue). The...
Voice Over Internet Protocol and the TCPA: The Hidden Pothole on the Information Super Highway
Thomas M. Byrne,Juan C. Garcia,Patricia A. Gorham,Phillip E. Stano,Rocco E. Testani, July 27, 2016
Since the enactment of the Telephone Consumer Protection Act (TCPA) in 1991, technological advances in the way people communicate have often outpaced the ability of the courts and the Federal Communications Commission to reconcile those advances with the TCPA. The proliferation of cell phones and...
Tables Turned: 21 States Tell Delaware to “Fork Over Our Unclaimed Property!"
Wilson G. Barmeyer,Holly H. Smith,Phillip E. Stano,Steuart H. Thomsen,Mary Jane Wilson-Bilik, June 15, 2016
The latest salvo in an ongoing battle against Delaware was fired on June 9, when 21 states, led by Texas and Arkansas, filed a motion in the U.S. Supreme Court to force Delaware to return to the States between $150 million and $400 million that Delaware had allegedly wrongfully claimed as abandoned...
FinCEN Customer Due Diligence Final Rules
Eric A. Arnold,Clifford E. Kirsch,Michael B. Koffler,Susan S. Krawczyk,Holly H. Smith, May 20, 2016
On May 5, 2016, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued final rules (the Final Rules) on customer due diligence requirements for banks, securities broker-dealers, mutual funds, and futures commission merchants and introducing brokers in commodities...
Unclaimed Property Primer for Health and Property & Casualty Insurance
Wilson G. Barmeyer,Holly H. Smith,Phillip E. Stano,Steuart H. Thomsen,Mary Jane Wilson-Bilik, May 17, 2016
Unclaimed Property: It’s not just about life insurance. The same contingency-fee unclaimed property auditors that targeted unclaimed life insurance proceeds are now turning their focus to other types of insurance, including health insurance and property & casualty insurance (P&C). For...
Basic-Supplemental Life Insurance Plan Pricing Structure Upheld in ERISA Class Action
Wilson G. Barmeyer,Carol T. McClarnon,Phillip E. Stano,Steuart H. Thomsen,Gail L. Westover, May 05, 2016
An employee benefit plan that includes an alleged subsidization component for its basic and supplemental options is neither prohibited by the Employee Retirement Income Security Act of 1974 (ERISA) nor a violation of the plan sponsor or service provider’s fiduciary duties, a federal district...
Tyson Foods v. Bouaphakeo: “Representative” Evidence May Be Used in (Some) Class Actions
Thomas M. Byrne,Thomas W. Curvin,Matt Gatewood,Patricia A. Gorham,Phillip E. Stano, March 24, 2016
On March 22, 2016, the United States Supreme Court affirmed the certification of a class of Tyson Foods employees under Rule 23(b)(3) and a collective action under the Fair Labor Standards Act (FLSA). The Court held that representative evidence could be allowed to fill an evidentiary gap created by...
Dial “C” for Confusion: Courts Split on TCPA Definition of Autodialer
Thomas M. Byrne,Juan C. Garcia,Phillip E. Stano,Rocco E. Testani,Lewis S. Wiener, March 15, 2016
Notwithstanding so-called “guidance” from the Federal Communications Commission (FCC) in its July 2015 Order, the definition of “automatic telephone dialing system” (ATDS or autodialer) continues to be a disputed issue. This issue perpetuates the uncertainty over the scope...
Store Credits Not Subject to Unclaimed Property, Says California Court
Wilson G. Barmeyer,Holly H. Smith,Phillip E. Stano,Steuart H. Thomsen,Mary Jane Wilson-Bilik, March 15, 2016
In a decision with potentially broad implications, a California Superior Court has held that merchandise credits not redeemable for cash are not subject to California's Unclaimed Property Law (UPL). The court also held that these credits qualified for exemption under the California unclaimed...
EU-U.S. Privacy Shield - Full Text Released
Daniel E. Frank,Mark D. Herlach,Brian M. Murphy,Robert D. Owen,Brian L. Rubin, March 08, 2016
On February 29, 2016, the European Commission released the text of the EU-U.S. Privacy Shield. The text reveals the details of a new framework that will place stronger obligations on U.S. companies to protect the personal data of EU citizens. It will also involve heightened compliance requirements...
NAIC IUL Illustration (A) Subgroup Approves Proposed Revisions to Actuarial Guideline 49 for Exposure and Comment
Eric A. Arnold,Frederick R. Bellamy,Thomas E. Bisset,Dodie C. Kent,Clifford E. Kirsch, March 03, 2016
On February 24, the IUL Illustration (A) Subgroup of the Life Actuarial (A) Task Force approved proposed revisions to Actuarial Guideline 49 (A.G. 49) for exposure and comment. Among other things, A.G. 49, which was adopted by the NAIC in 2015, establishes a uniform methodology for determining the...