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Fundamentals of Broker-Dealer Regulation 2020


Speaker(s): Alex Khachaturian, Andrew J. Shipe, Andrew N. Siegel, Brandon A. Hill, Christine M. Lombardo, Clifford E. Kirsch, David F. Freeman, Jr., David W. Blass, G. Philip Rutledge, John S. Polise, Joseph J. Sheirer, Josh Rubin, Lilya Tessler, Meredith Cordisco, Ronak V. Patel
Recorded on: Jul. 13, 2020
PLI Program #: 273936

Andrew Shipe is based in Washington, DC.  He is a member of the New York and District of Columbia bars.  He is the author of Chapter 1A of PLI’s Broker Dealer Regulation, “Legal Framework of Broker—Dealer Regulation Under the Securities Exchange Act of 1934.”

Mr. Shipe previously practiced with the Securities and Exchange Commission and the Commodity Futures Trading Commission.  He has advised U.S. and non-U.S. firms as to compliance with the numerous, overlapping laws and regulations that apply to securities broker-dealers, derivatives firms and asset managers.  Mr. Shipe’s experience includes counseling on new products and lines of business, membership in self-regulatory organizations, compliance with self-regulatory organization rules, and the qualifications of personnel.  He has counseled numerous non-U.S. financial institutions as to doing business in the United States, and advised exchanges and trade execution platforms on compliance with U.S. securities and derivatives laws.

Mr. Shipe is a graduate of the Georgetown University School of Foreign Service and the Fordham University School of Law.


Brandon Hill is a Senior Counsel in the Office of Chief Counsel, Division of Trading and Markets, where he focuses on broker-dealer registration status issues, enforcement investigations, cryptocurrency and digital assets, cybersecurity and exchange-traded products.  Prior to joining the Division of Trading and Markets, Mr. Hill served in the Division of Corporation Finance reviewing registration statements, annual reports and other periodic and transactional filings for issuers in the telecommunications and for-profit education industries.  Prior to joining the SEC, Mr. Hill was in private practice in Washington, D.C. and Seattle, WA focusing on public and private company mergers and acquisitions, public company regulatory compliance and private equity.  Mr. Hill obtained his law degree from Harvard Law School and his undergraduate degree from Howard University.


Cliff Kirsch began his career at the U.S. Securities and Exchange Commission (SEC), became chief legal officer for one of the country’s largest dually- registered broker-dealer/advisers and then joined Sutherland (now Eversheds Sutherland) in 2006. He relies on his regulatory and in- house background and an up-to-date knowledge of regulatory developments to provide practical and innovative counsel to broker-dealers and investment advisers in the areas of securities regulation and compliance.

With more than 25 years of experience, Cliff regularly counsels clients on the design and distribution of investment products including wrap-fee programs and other advisory products, mutual funds, bank collective investment funds and insurance products. He also focuses on issues related to the design and implementation of compliance programs at financial services firms.

While at the SEC, Cliff received the Manuel F. Cohen Award, which recognizes younger lawyers who have displayed outstanding legal ability, integrity and judgment and he served as assistant director of the SEC's Division of Investment Management.

Cliff is a frequent speaker at industry conferences, and is the author and editor of two of the leading treatises in the broker-dealer and adviser arena: Broker-Dealer Regulation and Investment Adviser Regulation (published by the Practising Law Institute).

Cliff is also co-founder of the Julia Anne Kirsch Foundation, which seeks to serve the needs of disabled individuals and their families.

Experience

Eversheds Sutherland counsels a coalition of major life insurance companies on evolving state and federal regulations and other legal developments.

Eversheds Sutherland represents a coalition of major life insurance companies, which collectively account for more than 80% of the annuity business in the United States, in their efforts to affect the direction and details of various SEC, FINRA, CFTC, NAIC and state rule proposals and initiatives.

Eversheds Sutherland serves as outside counsel on broker-dealer and adviser regulatory issues for one of the largest independent broker-dealer networks in the country.  Eversheds Sutherland serves as regular primary outside counsel on broker-dealer and adviser regulatory issues for one of the largest independent broker-dealer networks in the country.

Eversheds Sutherland represents coalition of collective trust fund sponsors, advisers and other service providers.

Eversheds Sutherland serves as counsel to the Coalition of Collective Trust Funds. Among other things, Sutherland monitors and reports on legal and regulatory matters affecting collective trust funds.

Professional Activities

Member, New York City Bar Association

Faculty, FINRA Compliance Institute at The Wharton School of the University of Pennsylvania

Former Chair, FINRA Variable Products Committee

Former Board Member, National Society of Compliance Professionals


David Freeman is a partner and head of Arnold & Porter‘s Financial Services practice group.  He represents broker-dealers, banking organizations and other financial institutions on a variety of matters including securities and bank regulatory issues, applications, compliance matters, legislation and rulemakings, transactions and documentation.

Mr. Freeman received his J.D., M.B.A. and B.A. degrees from the University of Virginia.


John Polise is the Associate Director in the Office of Compliance Inspections and Examinations new Broker-Dealer/ Exchange Group (BDX).  He heads the National Examination Program for registered broker-dealers and exchanges.  Previously he lead the Market Oversight Group where he supervised  the inspection of all domestic equity and options exchanges, the operation of FINRA, the MSRB and SIPIC.    Mr. Polise has served as an Assistant Director in the SEC’s Division of Enforcement, the Division of Trading and Markets, and the Office of Compliance Inspections and Examinations.  Mr. Polise was Counsel to the Chairman of the SEC, Counsel to the Chairman of the CFTC, Counsel to the Director, Division of Enforcement at the CFTC and Counsel to the Director for Markets at the SEC’s Division of Enforcement.   He has held positions at FINRA in both Enforcement and Member Regulation.  He began his career as an Associate at Cahill Gordon & Reindel in New York and clerked for the Honorable Stanley Sporkin, US District Court for the District of Columbia.  He graduated from the University of Pennsylvania, magna cum laude in 1985 and is a 1988 graduate of New York University School of Law.   He has been an adjunct professor at Georgetown University School of Law and is currently an adjunct professor, teaching securities regulation at George Mason School of Law.


Joseph J. Sheirer currently leads FINRA’s national Member Supervision Firm Examination Program. Mr. Sheirer previously oversaw the Woodbridge, Boston and Philadelphia district offices, developed and oversaw FINRA’s national Membership Application Program group, and worked in varying capacities in a number of other FINRA departments including Risk Oversight & Operational Regulation, Continuing Education, Testing, and Qualifications & Registration. Mr. Sheirer is a graduate of Brooklyn Law School and Drew University and is a member of the Bars of the States of New York and New Jersey.


Josh Rubin is Director of Legal at Betterment, the largest independent online financial advisor in the United States. Josh serves as lead counsel for the company’s product offerings and privacy program. He also advises the company on regulatory and policy developments. Prior to joining Betterment, Josh practiced law at Jenner & Block LLP and served as a law clerk to Judge Richard W. Roberts on the United States District Court for the District of Columbia. Josh is a graduate of Harvard Law School and Cornell University.


LILYA TESSLER is a partner and the New York head of Sidley’s FinTech and Blockchain group, which is recognized as a Band 2 practice in the 2020 Chambers Fintech guide. She focuses her practice on representing digital asset trading platforms, blockchain technology companies, U.S. and non-U.S. broker-dealers, financial services firms and cryptocurrency funds. Lilya is ranked in the 2020 Chambers Fintech guide in the USA Legal: Blockchain & Cryptocurrencies category and was named a “Rising Star” in Fintech by Law360 (2019).

Lilya advises technology companies on blockchain token offerings, including so-called ICOs. She also counsels financial institutions and digital asset exchanges with day-to-day securities issues, private placement agent requirements, custody rule requirements, cross-border regulatory issues, money services business registration requirements, as well as FINRA and SEC regulatory inquiries. She advises several U.S. and non-U.S. FinTech companies, including robo-advisors and high-frequency trading firms in evaluating the broker-dealer and investment adviser registration requirements.

Lilya is a member of Sidley’s global Securities Enforcement and Regulatory practice, which received the 2019 Chambers USA Award for “Financial Services Regulation,” and which was named the “Law Firm of the Year” for Securities Regulation in 2020 and 2017 by U.S. News – Best Lawyers. She works with transactional lawyers on structuring deals involving financial services and technology companies, digital asset exchanges and blockchain token offerings. She regularly assists both financial services firms and their vendors in negotiating U.S. and cross-border technology agreements for all types of services and considering the U.S. securities laws and broker-dealer regulatory issues associated with such technologies. Lilya has testified before the New Jersey Assembly Science, Innovation and Technology Committee on the economic development opportunities presented by blockchain technology innovation.

Lilya is a frequent speaker and writer on various topics in FinTech, with a particular focus on distributed ledger technology, blockchain tokens and digital asset trading platforms. She participated in the Legislating Certainty for Cryptocurrencies Roundtable hosted by Congressman Warren Davidson.

Lilya is the founder and co-chair of the Digital Asset Regulatory and Legal Alliance (DARLA), an industry working group consisting of General Counsel and Chief Compliance Officers of prominent blockchain and digital asset businesses. Lilya is a certified public accountant, FINRA dispute resolution arbitrator and previously held FINRA Series 7 and 24 licenses.

Prior to joining Sidley, Lilya was co-head of the FinTech and Blockchain Group and a leader of the broker-dealer practice at another global law firm.


Meredith Cordisco is Associate General Counsel with FINRA’s Office of General Counsel. In this capacity, she provides legal guidance on policy initiatives, rule changes and interpretations in various areas, including regarding new issues and spinning, suitability, private securities transactions and outside business activities. Before joining FINRA in 2015, Ms. Cordisco was counsel in the Securities Litigation and Enforcement group at WilmerHale, where she focused her practice on complex securities enforcement investigations. Ms. Cordisco received her B.S., summa cum laude, in International Business and French from Mount St. Mary’s University in Emmitsburg, Maryland, and her J.D., summa cum laude, and M.B.A., cum laude, from Villanova University. Following her studies, Ms. Cordisco clerked for the Honorable Eduardo C. Robreno on the U.S. District Court for the Eastern District of Pennsylvania. 


Mr. Rutledge is a partner of Bybel Rutledge LLP, Harrisburg, PA where his practice focuses on corporate and securities law, regulation of financial intermediaries and regulatory representation.  He is a nationally recognized expert in securities regulation and was instrumental in shaping various provisions of the Securities Markets Improvement Act of 1996, the Gramm-Leach-Bliley Financial Modernization Act of 1999 and the Sarbanes-Oxley Act of 2002. He has served as an expert witness for the Pennsylvania Office of Attorney General and has prepared expert opinions and testified as a securities expert before the U.S. Senate Permanent Subcommittee on Investigations, in FINRA arbitrations and in civil litigation.

Mr. Rutledge has taught securities regulation at Widener University School of Law, The Dickinson School of Law of the Pennsylvania State University and the FINRA Compliance Certificate Program at The Wharton School of the University of Pennsylvania.  He currently holds an appointment as Visiting Professor in Securities Law and Regulation in the LLM Program at BPP Law School, London and Tutor, Centre for Financial and Management Studies, University of London. He routinely is a guest lecturer at the Cambridge International Symposium on Economic Crime held at Jesus College, University of Cambridge, England.

He writes extensively in his area, most recently contributing chapters on State Regulation of Broker Dealers and State Regulation of Investment Advisers for the Practising Law Institute’s  multi-volume Treatise on Broker-Dealer Regulation and Investment Adviser Regulation, respectively.  He also is the author of books on Electronic Markets and Civil and Administrative Liability under Pennsylvania Securities Law and has written chapters for The Sarbanes-Oxley Handbook, The Fiduciary, the Insider and the Conflict, and International Tracing of Assets.  His legal articles have appeared in the ABA Business Lawyer, Journal of European Financial Services Law, The Dickinson Journal of International Law, Journal of Financial Crime and The Company Lawyer.

Mr. Rutledge is a member of the Securities Regulation Advisory Committee for the American Law Institute and the Securities Advisory Committee of the Pennsylvania Department of Banking and Securities.  He also served on the Board of Editors of the ABA Business Lawyer.   For the past six years, he has been named in The Best Lawyers in America in Central Pennsylvania for his expertise in corporate, securities transactional, litigation and regulatory matters.

Mr. Rutledge is a Freeman of the City of London in the Worshipful Company of Pattenmakers and a member of the Council of the Business Law Section of the Pennsylvania Bar Association.


Mr. Siegel is General Counsel and Chief Compliance Officer of Galaxy Digital LP, a diversified financial services firm dedicated to the digital currency and blockchain sectors

Prior to Galaxy Digital, Mr. Siegel served in a variety of legal and compliance roles for Perella Weinberg Partners, a financial services firm providing advisory and asset management services to a global client base.  Prior to joining Perella Weinberg, Mr. Siegel was General Counsel and Chief Compliance Officer of Stanfield Capital Partners LLC, an alternative asset manager based in New York. Prior to joining Stanfield, Mr. Siegel served in the law division of Morgan Stanley, initially advising the Mergers and Acquisitions Department. Ultimately, Mr. Siegel was the senior attorney responsible for advising Morgan Stanley Investment Management’s alternative investment funds, including its private equity funds, venture capital funds, hedge funds and fund of funds. Previously in his career, Mr. Siegel was a corporate attorney at Shearman & Sterling where he focused on public and private mergers and acquisitions, private equity transactions and join ventures.

Mr. Siegel is admitted to the Bar of the State of New York and has been designated a Certified Regulatory and Compliance Professional by FINRA.

Mr. Siegel received a Bachelor of Arts in Political Science, magna cum laude, from Tufts University and a Juris Doctor, summa cum laude, from Washington College of Law at American University where he was an editor of The American University Law Review.


David Blass is a Partner in Simpson Thacher & Bartlett LLP’s Investment Funds Practice. David is a leading regulatory lawyer in the funds industry and has advised on matters involving innovative registered funds products, Investment Advisers Act compliance, SEC examination and enforcement matters, and broker-dealer regulatory compliance.

Prior to joining Simpson Thacher, David served as General Counsel of the Investment Company Institute (ICI), where he was responsible for the full range of legal and regulatory matters affecting the asset management industry, including investment company, capital markets, pension and tax issues.

Before joining ICI, David held a number of senior positions for over a decade at the Securities and Exchange Commission. From 2011 to 2014, David was Chief Counsel and Associate Director of the SEC’s Division of Trading and Markets. In that role, David led a team of 45 attorneys responsible for legal and policy decisions on matters affecting the securities markets and broker-deals generally, and the private equity industry specifically. In that role, he authored several no-action letters, including an important letter for M&A brokers. Before that, he was the Associate General Counsel, advising the SEC Chair and Commissioners on legal policy matters for the agency’s asset management, trading and markets, examination and international programs. Previously, as Assistant Director in the SEC’s Division of Investment Management, he managed the office in charge of investment adviser regulation, which included private fund advisers. David has also spent time in private practice, having worked at two other international law firms.

David has a strong reputation as a thought leader and speaker. David has advocated for the asset management industry before countless domestic and international regulators, and he has testified on industry’s behalf before Congress. He is a sought-after speaker in asset management and broker-dealer conferences. He has written and delivered speeches outlining broker-dealer issues on transaction fees for the private equity industry and rulemaking impacting the asset management industry, including private funds and their advisers and the recent SEC suite of rulemakings targeting asset managers and funds.

David received his J.D. from Columbia University School of Law and his B.A. from the University of Alabama. David is admitted to practice in New York and the District of Columbia.


Ronak Patel is a member of Winstead’s Litigation Practice Group and Securities Litigation & Enforcement Practice Group. He focuses on a wide range of securities regulatory and litigation matters. He is an experienced litigation attorney who possesses extensive regulatory experience with securities regulatory agencies across the U.S.

Ronak represents clients in matters involving state securities regulators across the country including the Texas State Securities Board, the Massachusetts Securities Division, the Alabama Securities Commission, and many others. He also represents as well as the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA). He represents broker-dealers, investment advisers, hedge funds and other private funds, public companies, asset managers, gate-keepers, and other institutions in government investigations, securities law enforcement matters and related litigation and regularly advises these clients on compliance matters and their regulatory strategies.

Before establishing his private practice, Ronak served as Deputy Securities Commissioner of Texas. He held numerous leadership positions with the North American Securities Administrators Association (NASAA), working very closely with state and federal securities regulators across the country.  As a regulator, he led the prosecution of a number of high profile investigations involving matters such as the 2008 failure of the auction rate securities market, Ponzi schemes, broker misconduct and complex investment products. Patel now draws on that experience to navigate broker-dealers and investment advisers through complex regulatory investigation, enforcement actions, and litigation involving allegations such as failures to supervise, fraud, and breach of fiduciary duty.


Alex Khachaturian serves as a Director in FINRA’s Office of Financial Innovation (OFI).  Alex’s supports OFI’s mission in the identification and analysis of emerging technologies, products, laws and regulations, business models, and industry practices (both domestic and international) to inform FINRA’s risk management and strategy goals.  Prior to joining FINRA, Alex served as an attorney in the Office of International Affairs at the U.S. Commodity Futures Trading Commission (CFTC), where he worked on legal and policy issues related to global derivatives regulation.  Additionally, Alex has worked as an attorney in the International Dispute Resolution group at White & Case and as a FX derivatives analyst at a global financial services firm.  Alex received a J.D., with honors, from the University of Connecticut School of Law, where he served on the Law Review; a master’s degree, in International Relations, from Suffolk University, in Boston; and a B.A., with distinction, from the University of Michigan, Ann Arbor.


Christine Lombardo advises investment managers and broker-dealers on financial regulatory matters. She concentrates her practice on securities regulation for a broad range of financial firms including retail asset managers, private fund managers, family offices, broker-dealers, other professional traders, and high-net-worth individuals. Christine also counsels legal, compliance, and business personnel on the structure, operation, and distribution of advisory programs, including digital advisory offerings, and investment products, including hedge funds, private equity funds, venture capital funds, real estate funds, and other alternative investment products.