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Broker-Dealer and Market Regulation

Bracewell & Giuliani advises broker-dealers on all aspects of financial markets regulation. We work closely with clients to ensure compliance with the requirements of the Securities and Exchange Commission (SEC), the Federal Reserve Board, the Financial Industry Regulatory Authority, Inc. (FINRA), and other securities industry self-regulatory organizations. We help broker-dealers and their associated persons respond to regulatory examinations and inquiries, and provide effective representation in a range of enforcement proceedings. Our lawyers have represented major broker-dealers, securities exchanges, service providers, analysts, traders, and salespeople in regulatory investigations involving, among other things, margin, securities lending, gifts and gratuities, market-making, research, frontrunning, trading ahead, and short-sales.  

Our firm has become a "go to" firm on a number of broker-dealer issues that are beyond the capabilities of most firms.  We are regularly retained on issues involving correspondent clearing, prime brokerage, net capital, margin, securities lending, and customer protection. We are recognized for our knowledge of trading practices on the NYSE, NASDAQ, and other securities exchanges, and have, within our midst, lawyers who have years of trading experience. 

Members of our team serve on the NASDAQ Market Operations Review Committee as well as the best-execution committees of several major broker-dealers.

Broker-Dealer Compliance

We regularly advise broker-dealers on issues arising under the federal laws and rules that govern investment advisers, investment companies and the securities markets. We regularly advise broker-dealers on the rules of the SEC, FINRA and other regulatory and self-regulatory organizations. We are in regular contact with key regulators, and have an in-depth understanding their goals and perspectives.

We assist a full range of broker-dealer clients, including the brokerage and securities lending operations of major financial institutions. We also represent investment and private-equity funds, hedge funds, fund management, and the broker-dealer operations of securities dealers and global investment bankers.

We provide counsel on:

  • Short sales, prime brokerage, securities lending, and other compliance matters
  • Examination and sweeps-based enforcement actions
  • Net capital and customer securities segregations issues
  • Clearance and settlement issues, as well as margin and securities lending concerns
  • Credit derivatives, options, swaps, and similar hedges
  • Collateralized debt obligations
  • Directed brokerage and soft-dollar arrangements
  • Clearing, account settlement and order-routing and execution agreements
  • Written supervisory procedures and compliance manuals.

Our attorneys advise clients on a wide range of transactions. These transactions range from the establishment of a broker-dealer, to the obtaining of an approval of a change of control or material changes in business. We perform due diligence and act as special counsel in connection with mergers and acquisitions of broker-dealers and their operations. For foreign financial institutions, we establish 15a-6 arrangements that allow them to offer brokerage services to major U.S. institutional investors in conjunction with a U.S. broker-dealer, without registering in this country.

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Financial Services Enforcement

We defend broker-dealers and their associated persons in a full range of enforcement inquiries, investigations and actions brought by the Department of Justice, SEC, FINRA, and state attorneys general. These include insider trading and manipulation issues, fiduciary duty claims, general solicitation issues, misleading advertising claims, investment company registration claims against private funds, and investment adviser and broker-dealer registration claims against private fund interests.

We represent broker-dealers in litigation relating to the promotion of investments and investment products, including investor litigation in the U.S. and abroad. We defend clients in investor disputes involving, among other issues:

  • Fiduciary duty claims (such as self-dealing, side-by-side trading, non-disclosure of conflicts, and oppression of minority shareholders)
  • Duty of care and business judgment rule-based claims
  • Claims based on adequacy or effectiveness of disclosure
  • Suitability claims
  • Prohibited transaction claims.