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Fundamentals of Broker-Dealer Regulation 2017


Speaker(s): Caroline K. Hall, Cece Baute Mavico, Clifford E. Kirsch, David F. Freeman, Jr., G. Philip Rutledge, Ira Hammerman, Joanne C. Rutkowski, Joseph J. Sheirer, Julie K. Glynn, Lanny A. Schwartz, Lee A. Schneider, Mark M. Attar, Sandra Clarke, Susan S. Krawczyk, William D. Edick
Recorded on: Jul. 17, 2017
PLI Program #: 180100

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.


Lee A. Schneider is General Counsel at Block.one, one of the world’s largest blockchain companies and creator of the EOSIO blockchain protocol.  In that role, Schneider is responsible for various aspects of the legal function as well as the company’s government affairs initiatives.

He joined Block.One after leading the blockchain, FinTech and broker-dealer practices at two major international firms.  Lee has been recognized as one of the leading voices in blockchain-related regulation and compliance and has played a role in structuring several of the largest and most successful blockchain-related projects.  He is the contributing editor of the Chambers and Partners 2019 FinTech Practice Guide.

Schneider co-hosts Appetite for Disruption, a bi-weekly FinTech podcast with former SEC Commissioner Troy Paredes, which features interviews with leading voices in the space.  Lee is also a co-founder of Genesis Block, a blockchain and start-up advisory firm.

Schneider holds a Juris Doctor degree from American University’s Washington College of Law and a bachelor’s degree in Economics from the University of Michigan.  He is the father of two wonderful, exhausting teenage ladies and learns about Japanese art history from his wife.  


A former SEC regulator, Mark Attar is uniquely conversant in the SEC’s complex broker-dealer financial responsibility rules. His extensive experience with the net capital rule, customer protection rule, hypothecation rules, books and records rules, financial reporting rules, and risk assessment rules enables his clients to make smarter decisions about their money.

Before re-joining Schiff Hardin, Mark spent twelve years working in increasingly senior positions within the SEC’s Office of Broker-Dealer Finances, administering the SEC’s broker-dealer financial responsibility rules.

Mark has assisted clients in responding to interpretive questions under SEC and SRO rules, preparing comment letters on SEC and SRO rulemaking proposals, requesting no-action relief from regulatory requirements, preparing written responses to examination and enforcement inquiries, drafting new and continuing SRO membership applications, assessing coverage under the Securities Investor Protection Act of 1970, and negotiating contracts.

Experience

  • U.S. Securities and Exchange Commission, Division of Trading and Markets
  • Mark managed attorneys responsible for administering the SEC’s broker-dealer financial responsibility rules, including the net capital rule, customer protection rule, hypothecation rules, books and records rules, financial reporting rules, and risk assessment rules.
  • He provided formal guidance in the form of no-action and interpretive letters, and assisted in the preparation of Division publications answering frequently asked questions.
  • Mark provided interpretive guidance to SEC staff, market participants, and the public on broker-dealer financial responsibility rules and federal and self-regulatory organization securities credit regulations.
  • Mark served as primary liaison on enforcement matters involving broker-dealer financial responsibility.
  • He assessed potential SIPC coverage under the Securities Investor Protection Act of 1970.
  • Mark coordinated with self-regulatory organizations on overlapping financial responsibility issues.
  • Mark was a member of teams responsible for completing mandated rulemaking under the Dodd-Frank Act relating to, among other things, security-based swap dealer capital, margin, and segregation, statutory and regulatory credit rating reference removal, broker-dealer reporting, audit, and notification requirements, and rescission of the SEC’s investment bank holding company program.
  • He responded to rating agency requests to be recognized as nationally recognized statistical rating organizations and served as a primary drafter of the SEC’s report under the Sarbanes-Oxley Act of 2002 on the Role and Function of Credit Rating Agencies in the Operation of the Securities Markets and related SEC rulemaking initiatives leading up to the Credit Rating Agency Reform Act of 2006.


Cece is a managing attorney in LPL’s Compliance, Legal, and Risk organization, specifically the Head of Regulatory Inquiries & Strategy.  She and her team are responsible for representing the firm in complex regulatory matters and advising on regulatory strategy.  She is located in LPL Financial’s Fort Mill office.

Prior to joining LPL Financial in 2015, Ms. Mavico was in private practice where she focused on securities regulatory and enforcement matters and was a senior regulatory specialist with the NASD in Washington, DC.  Ms. Mavico started her career in the financial services industry in compliance and supervisory roles and held various securities and insurance licenses.  Ms. Mavico received a Bachelor of Science in Finance from Trinity University and a Juris Doctor from American University, Washington College of Law.  She is a member of the New York, District of Columbia and Texas Bar Associations.


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, University of Pennsylvania.  He currently holds an appointment as a Tutor, Centre for Financial and Management Studies, University of London. In 2015, he was appointed Visiting Professor in Securities Law and Regulation in the LLM Program at BPP University, 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 Banque de France Financial Stability Review, 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 five years, he has been named in The Best Lawyers in America and, in 2015, was named “Lawyer of the Year” in Central Pennsylvania for his expertise in securities and securities regulatory matters.

He is a member of the Council of the Business Law Section of the Pennsylvania Bar Association and is Chair of its Securities Regulation Committee.  In 2009, he received the Freedom of the City of London in the Worshipful Company of Pattenmakers. In 2010, he was appointed to the Editorial Advisory Board of the Centre for Business Law, University of the Free State, in the Republic of South Africa.


Mr. Edick has been with Pickard Djinis and Pisarri LLP since 1995 and became a partner of the firm in 2003. He specializes in regulatory and enforcement matters involving broker-dealers, investment advisers, investment companies, hedge funds and independent research firms. Mr. Edick counsels clients on compliance and registration issues, and represents clients before the SEC, FINRA and other securities industry regulators.  Prior to joining Pickard Djinis and Pisarri, Mr. Edick was an analyst with the Market Surveillance Department of the NASD, where he focused on insider trading investigations.

Education

Georgetown University, LL.M., Securities and Financial Regulation, with Distinction, 1997

American University, J.D., summa cum laude, 1994

American University, B.S.B.A.


Caroline Hall is a Senior Vice President and Associate General Counsel of Raymond James Financial.  In her role, she heads the Regulatory Enforcement and Investigations unit in the Firm’s law department.  Ms. Hall and her team represent Raymond James and its subsidiaries and employees in enforcement and pre-enforcement matters.  The group also conducts internal investigations for the Firm working closely with compliance and the AML teams to help the Firm in its risk mitigation efforts. Prior to joining Raymond James, Ms. Hall worked at UBS for 10 years as an in house lawyer and spent 10 years in private practice representing a variety of financial institutions in litigation and regulatory matters. Ms. Hall has practiced before the Federal Reserve, the  SEC, the CFTC, FINRA and many of the State Regulators. Ms. Hall has been a speaker at a variety of industry conferences speaking on topics related to enforcement matters pursued by the State, Federal and SRO regulators. Ms. Hall graduated from Hofstra University School of law with Honors and Vanderbilt University with a BA in Political Science and Psychology.


JOANNE RUTKOWSKI is Senior Special Counsel in the Office of Chief Counsel of the Division of Trading and Markets (formerly the Division of Market Regulation) at the U.S. Securities and Exchange Commission.  In this capacity, Ms. Rutkowski works on public policy and regulatory issues related to broker-dealers.  She also has worked extensively on issues related to the implementation of business conduct standards for security-based swap dealers and major security-based swap participants under Title VII of Dodd-Frank, as well as crowdfunding initiatives under the JOBS Act.  Prior to rejoining the Commission, she worked in both the public and private sectors, most recently as a partner in the Washington, D.C. office of Baker Botts LLP.  Ms. Rutkowski received her J.D. from Harvard University, and her B.S. in Mathematics from Albright College.


Joseph J. Sheirer is the Director of FINRA’s New Jersey District Office. Mr. Sheirer oversees the Surveillance, Cycle Examination, and Cause Investigation Programs for member firms and associated persons located in New Jersey and New York (outside of the five boroughs of New York City and Long Island). Mr. Sheirer previously 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.


Julie Glynn joined JP Morgan Chase in 2011 and is currently the General Counsel of Chase Wealth Management.  She previously worked in the Government Investigation and Regulatory Enforcement Group and as Deputy Chief Legal Officer for JP Morgan Securities, LLC and JP Morgan Clearing Corporation.  Prior to working at JP Morgan Chase was worked at FINRA Enforcement, Morgan Stanley and Morrison & Foerster. 


Lanny Schwartz is Chief Regulatory Officer of the Municipal Securities Rulemaking Board, where he oversees rulemaking activities and regulatory policy development.

Before joining the MSRB, Mr. Schwartz spent more than a decade as a partner at Davis Polk & Wardwell LLP, where he provided regulatory counsel to broker-dealers, banks, swap dealers, securities exchanges and others.

From 1999 to 2005, Mr. Schwartz served as executive vice president and general counsel at the Philadelphia Stock Exchange. Earlier, he was managing director and counsel for Bankers Trust Company and worked as an associate at Cleary, Gottlieb, Steen & Hamilton and Coudert Brothers.

Mr. Schwartz is the author of many articles on broker-dealer and market regulation and is a frequent speaker and panelist at industry conferences, as well as a former adjunct faculty member at the Columbia University Law School.

Mr. Schwartz earned a bachelor’s degree from the University of Pennsylvania and a law degree from the New York University School of Law.


Sandra Clarke is an Associate Director of the Membership Application Program (“MAP”) located in the New York District Office. She currently oversees new member and continuing membership applications; funding portal membership, surveillance and examinations; the subordinated loan program; and membership applications for certain exchanges governed under Regulatory Service Agreements with FINRA. She commenced her employment with FINRA in 1990. From 2010 to 2013, Sandra was an Examination Manger in the New York District Office Sales Practice Program and was responsible for managing the examinations of broker-dealers and their branch offices.  Prior to joining Member Regulation, Sandra worked in the New York Office of Dispute Resolution for eight years and held various positions including Sr. Legal Assistant and Regional Support Team Supervisor.


Susan Krawczyk is a partner with the law firm Eversheds Sutherland (US) LLP. Susan advises clients regularly on distribution and wholesaling arrangements for both public and private securities offerings, including incentive, non-cash compensation and marketing support arrangements. Susan has particular experience with firms involved in the sale and distribution of investment products and programs in the registered investment adviser context (i.e., the RIA channel) and retirement plan markets.


Since 2004, Mr. Hammerman has overseen SIFMA’s legal advocacy efforts and outside counsel relationships. He has been intimately involved with SIFMA's response to the 2008 financial crisis, particularly SIFMA's advocacy efforts related to the Dodd-Frank Act. Prior to joining SIFMA, Mr. Hammerman was a partner of Clifford Chance, where over a 19-year period he represented the financial services industry on a wide variety of securities regulatory and enforcement matters before the SEC, FINRA and state regulatory authorities. His practice focused on U.S. securities regulation of U.S. and foreign financial institutions, including broker-dealers, investment advisers, banks and investment companies. A substantial part of his practice included representation of financial institutions with respect to trading, compliance and enforcement matters. Mr. Hammerman received his law degree from Georgetown University Law Center in 1985 and received a B.A. from Emory University in 1982. He is a member of the District of Columbia and New York Bars.