Tag Archives: Financial

Regulatory Analysis: FINRA Rule 3280 – Private Securities Transactions

The following is part of an occasional series on specific rules and regulations governing financial professions.  This article will analyze FINRA Rule 3280, which governs (and limits) private securities transactions by persons associated with a FINRA member (“associated persons” or “representatives”).  In general, the rule forbids representatives from participating in private securities transactions unless they …

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Definition of a Security: The Investment Contract (Part II)

The following is Part II of my article on investment contracts.  It will analyze the final two elements of the Howey Test: The expectation of profit and profit derived from the efforts of others. Part I can be found here. Expectation of profits As confirmed by the Supreme Court, the definition of “profit” is broad …

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Definition of a Security: The Investment Contract (Part I)

This article is the second in an occasional series on the definition of a “security.”  As I explained previously, when a financial instrument qualifies as a “security,” it becomes subject to an extensive apparatus of securities regulation.  The most notable of this group are the Securities Act of 1933 and the Securities Exchange Act of …

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The Accountant-Client Privilege in Illinois

Illinois recognizes an accountant-client privilege.  Though limited, it allows accountants to shield certain documents and communications from disclosure in litigation.  Source of the Privilege The privilege is codified in Section 27 of the Illinois Public Accounting Act.  In relevant part, Section 27 establishes that a “licensed or registered CPA shall not be required by any …

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Definition of a Security: It’s All in the Family (Resemblance Test)

This article is the first in an occasional series on the definition of a “security.”  The answer is important.  When a financial instrument qualifies as a security, it unlocks a set of laws and regulations that would not otherwise apply.  These include two statutes that are discussed extensively below: the Securities Act of 1933 and …

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Regulatory Analysis: FINRA Rule 3270 – Disclosure of Outside Business Activity (Part II)

This article is part of an occasional series on specific rules and regulations governing financial professions.  It is also the second in a multi-part analysis of FINRA Rule 3270.  Part II will analyze portions of the rule’s text that were not discussed in Part I, examine the content required for a notice under 3270 and …

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Regulatory Analysis: FINRA Rule 3270 – Disclosure of Outside Business (Part I)

This article is part of an occasional series on specific rules and regulations governing financial professions.  It is also the first in a multi-part analysis of FINRA Rule 3270. Part II is available here. THE RULE FINRA Rule 3270 – Outside Business Activity of Registered Persons No registered person may be an employee, independent contractor, …

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The Nature and Extent of Arbitral Immunity

While the COVID-19 pandemic has shuttered much of the country’s judicial machinery, courts have released opinions on matters argued prior to the stoppage.  Two recent federal court opinions – Cherdak, out of the D.C. District[1] and Lanza, decided by the First Circuit[2] – touched on an issue with relevance to financial professionals: arbitral immunity.  This …

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