As financial markets have become increasingly global, jurisdictions around the world have implemented comprehensive regulatory schemes to match those in the United States. The securities, futures and derivatives industries are among the most regulated businesses in the world. Within the U.S., firms and professionals are subject to pervasive federal and state laws, as well as the rules and regulations of self-regulatory organizations such as the Financial Industry Regulatory Authority (FINRA) and the various securities and futures exchanges, including the New York Stock Exchange. Recently, the industry has come under increasing scrutiny of regulators in all three realms, with criminal sanctions being used more frequently to enforce the law.

At the same time, professionals in these markets have had to adjust to a business environment transformed and made more competitive by artificial intelligence and machine learning. Once-reliable business models have suddenly become unprofitable and novel business models unimagined only a few years ago are vying for competitive footholds via the globalization of the financial markets.

Duane Morris represents securities, futures and derivatives firms and individual professionals as they meet the dual challenges of increasing regulation and intense competition. Our services are aimed at a broad range of firms catering both to public and institutional customers, and to market-makers, sponsors and operators of electronic communications networks (ECNs), internet and other online access firms, clearing firms, investment advisors, commodity pool operators, private investment and trading companies, and even exchanges themselves.

Our Broker-Dealer Regulation and Compliance Group benefits from the experienced attorneys in the firm’s other groups to offer bespoke guidance and representation to clients. By working in tandem with our colleagues in adjacent practice and industry groups, our attorneys offer mature legal representation in a broad range of complex transactional matters. We have assisted clients with regulatory guidance relating to capital markets, investment and merchant banking, corporate structure and municipal finance, mergers and acquisitions, and institutional lending.

Litigation and Arbitration

If litigation is necessary, Duane Morris attorneys bring decades of experience in securities industry arbitration, mediation and litigation. We represent broker-dealers, funds, other institutions and investment professionals in the arbitration forums of FINRA, the National Futures Association and the American Arbitration Association, as well as handling matters before the state and federal courts.

Since industry participants also regularly face enforcement actions by government agencies and self-regulatory bodies, we also represent clients in all aspects of the enforcement process in administrative proceedings and in court. With many regulatory violations now being treated as criminal offenses, we also represent clients through grand jury investigations and other pre-trial criminal proceedings.

Regulatory Compliance and Enforcement Defense

Regulations by federal and state government agencies, in addition to those from self-regulatory organizations, create complex and inconsistent requirements for broker-dealers to follow. Our clients—which also include exchanges, contract markets, ECNs, futures commission merchants, issuers, underwriters, investment advisors, hedge funds, portfolio managers, commodity pool operators and advisors, floor traders and exchange members—rely on us for guidance on:

  • Registration and qualification matters
  • Financial responsibility, books and records and back-office requirements
  • Front office and sales practice regulations
  • Marketing and advertising initiatives
  • Disclosure obligations
  • Clearance, prime broker and settlement issues
  • Preparation of supervisory procedures
  • Adherence to new regulatory enactments

We have also assisted clients with auditing practices and policies to find and correct any issues that could lead to an enforcement action. Self-correction and regulation are generally the best defense against future regulatory enforcement action.

Managed Investment Programs and Products

Pooled investment vehicles continue to proliferate. Many industry participants, who initially entered the field seeking to avoid regulatory strictures, now face new laws and regulations and are likely to face even more in the years to come. We assist clients in developing managed account programs, trading and hedge funds, commodity pools and market-maker organizations. Both domestic and offshore participants look to us in these ventures to structure their capital raising, advisory, brokerage, clearing, underwriting and distribution relationships. We also counsel investment advisors and commodity trading advisors who are also subject to equally extensive regulation.

Strategic Business Planning

We bring our experience in today’s highly regulated environment to assist firms and individuals entering and participating in both traditional and electronic marketplaces. Financial responsibility, licensing and other pervasive rules and regulations present unique issues for clients buying or selling securities or futures businesses or introducing new investment trading programs and instruments. Our attorneys can guide clients through the labyrinth of regulations to minimize its impact on their mergers and acquisitions.

Derivatives Practice

Our broad derivatives practice covers both transactional and regulatory work. We have represented commercial banks, investment banks and structured finance vehicles in transactions involving credit derivatives (including total return swaps, credit default swaps and credit-linked notes), equity derivatives, interest rate, currency and commodity swaps, foreign exchange, forward and option agreements, repurchase agreements, securities lending agreements, prime brokerage agreements and master netting agreements. Our attorneys have drafted and/or negotiated hundreds of ISDA master agreements and other customized forms that govern derivative transactions in addition to credit support documents.

International Markets

Foreign companies increasingly look to U.S. financial markets as an alternative to their domestic markets or to finance U.S. acquisitions. With our international footprint, Duane Morris has advised foreign clients through our London office regarding U.S. listings and raising capital. Additionally, we assist clients in the United Kingdom in complying with European Union regulations and deal with various industry concerns in Europe.

Strategic Practice Group Liaisons

Although professionals and other participants in financial markets and services are subject to pervasive industry-specific regulation, they must also deal with the broad range of legal issues facing businesses generally. These more traditional business law issues can also be impacted by financial market regulation. For example, labor and employment-related disputes, involving claims of wrongful termination or discriminatory employment or hiring practices, are frequently adjudicated in special arbitration forums, rather than in court. The veritable explosion of licensing agreements correlating to the intellectual property underlying the financial industry’s front-end and trading platforms, back-end account management and clearing and settlement systems requires both a knowledge of the markets and their users beyond general experience in the licensing of technology.

The banking and insurance industries are subject to equally pervasive regulatory schemes, and experienced professionals within Duane Morris offer them counsel in the broadest range of their needs and concerns.

For More Information

For more information, please contact James J. Coster, James J. Regan, Justin Joseph D'Elia or any of the lawyers referenced in the Attorney Listing.