Broker-Dealer & Investment Adviser
Arnold & Porter provides a full range of legal services to broker-dealers and other financial intermediaries. Our clients include international, national, regional, and specialty broker-dealer firms. Our Broker-Dealer lawyers also work closely with other practice areas, including Financial Services, Investment Management, Corporate and Finance, Litigation, Mergers & Acquisitions, Legislative and Public Policy, Labor & Employment, and Antitrust law, allowing us to provide comprehensive advice to broker-dealers and diversified financial services companies.
- Investigations, Litigation and Arbitration: The firm regularly represents broker-dealers and other financial firms in investigations and litigation. We have handled numerous regulatory examinations, investigations, and enforcement actions involving the SEC, Department of Justice, Congress, the Commodity Futures Trading Commission, the Financial Industry Regulatory Authority (FINRA) and other SROs, and bank regulators. We also defend against customer and employee arbitration and litigation claims in all types of disputes, including claims of unsuitability, failure to supervise, breach of fiduciary duty, and more.
- International Practice: With attorneys in New York, Washington, San Francisco, and London, we frequently advise non-US securities firms as to their operations in the US and relations with US investors, including under SEC Rule 15a-6. Our lawyers have represented firms based in Latin America, Europe, and Asia in forming new broker-dealers, expanding operations, establishing relationships with US broker-dealers, and acquiring or selling existing US broker-dealers.
- Regulatory Policy and Legislative Work: We also advise broker-dealer clients regarding legislative and regulatory policy matters. Our work includes counseling firms as to the effects of regulatory reforms and engaging with policymakers on behalf of our clients. Our experience includes policy-related advocacy in Congress and before regulators, and representation of clients in obtaining no-action and exemptive relief from regulators. We frequently submit comments to US, UK, and EU authorities with respect to proposed laws and regulations affecting broker-dealers and other types of financial firms.
- Formation and Activities Expansion: For new broker-dealers, we advise on the appropriate business vehicle from commercial and tax perspectives both at the country-specific and the global level. Our lawyers draft FINRA membership applications, organizational documents, operating agreements, supervisory and compliance manuals, policies, and procedures, as well as vendor agreements. In addition, we handle regulatory applications. We also advise on corporate governance and culture issues, registration of personnel, employment compensation and contracts, and protection of intellectual property rights.
- Acquisitions: We advise on the unique regulatory and legal issues that arise when acquiring a broker-dealer. We perform due diligence reviews of broker-dealer, investment management, and advisory firms that are candidates for acquisition. We focus on the internal controls of the target, its compliance with regulatory standards and its management structure, and assist with filings with FINRA and state and federal regulators.
- Prime Brokerage Services: Since our lawyers represent many hedge fund managers, we are experienced in reviewing prime brokerage documents and custody agreements from the buy-side. This gives us a more rounded perspective and an eye for the key issues when advising the sell-side. We also advise parties to financial market contracts with respect to counterparty insolvency risks.
- Underwriters' Counsel: Our lawyers have represented underwriters and placement agents in a wide variety of capital raising transactions.
- Bank Affiliations and Relationships: We have expertise in relationships between broker-dealers and banks. We advise broker-dealers that are affiliated with banks on the regulatory requirements applicable to their securities activities under the banking laws (such as the Bank Holding Company Act Regulations Y and K, Federal Reserve Act Sections 23A and B and Regulation W, consolidated supervision, systemic risk issues, and the Volcker Rule). We advise clients on the establishment of account sweep programs, and as to the operations of broker-dealers in wealth management firms. We also advise banks on Regulation R and the "bank" exemptions from the definitions of "broker" and "dealer."
- Regulatory Compliance and Operations: Compliance and awareness of impending regulatory changes are critical to a broker-dealer's success. Our lawyers advise on all aspects of broker-dealer regulation, including authorization requirements, research distribution, client classification, market abuse, commodity and derivatives trading, and financial promotions. Our Broker-Dealer lawyers are experienced in developing and enhancing compliance programs and drafting and revising compliance and supervisory policies, procedures and manuals, and training programs.
Our day-to-day work includes drafting and reviewing counterparty and customer documentation; vendor agreements; ISDA documentation; clearing, give-up, introducing broker, repo, and stocklending agreements; advice on the margin lending rules, derivatives regulation, privacy, and cybersecurity issues. - Anti-Money Laundering, FCPA, and OFAC: We advise broker-dealers on Anti-Money Laundering (AML), Foreign Corrupt Practices Act (FCPA), and Office of Foreign Asset Control (OFAC) compliance programs and issues. For UK clients, we advise on the Proceeds of Crime Act and the Money Laundering Regulations. We have drafted AML manuals, conducted training seminars, and advised on reporting requirements. Our lawyers have represented firms and individuals in money laundering investigations and asset forfeiture proceedings by the Department of Justice, including in cases where transactions were routed through institutions on multiple continents. We have represented both foreign and domestic clients being investigated for FCPA issues by the Department of Justice and the SEC.
- Internal Reviews and Investigations: At the request of our clients, our lawyers review and investigate compliance with FINRA, SRO, SEC, and state regulations. Internal reviews and investigations help clients identify compliance with best practices in response to regulatory inquiries and investigations, customer complaints, or whistleblowers. We also help clients comply with FINRA Rules by assisting with internal inspections, evaluations, and certifications.
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