Equity Market Stuctures Roundtable

September 26, 2018: Roundtable on Combating Retail Investor Fraud

 
Press Release: SEC Staff to Host Roundtable on Regulatory Approaches to Combating Retail Investor Fraud

Sunshine Act Notice

Agenda and Panelists: Roundtable on Combating Retail Investor Fraud


  • 9:30 a.m. ET | Opening Remarks

  • [+]9:45 a.m. ET | Panel One – Types of Fraudulent and Manipulative Schemes Currently Targeting Retail Investors

    Panelists

    • Charu Chandrasekhar, Assistant Director, Division of Enforcement
    • Cameron Funkhouser, E.V.P., Office of Fraud Detection & Market Intelligence, FINRA
    • Christopher Gerold, Chief of the New Jersey Bureau of Securities
    • Nicole Iannarone, Associate Clinical Professor, Georgia State University College of Law
    • Jean Setzfand, S.V.P., AARP Programs, AARP
  • 11:15 a.m. ET | Break

  • [+]11:30 a.m. ET | Panel Two – Enhancing the Ability of Broker-Dealers to Combat Retail Investor Fraud

    Rule 15c2-11. Exchange Act Rule 15c2-11 requires a broker-dealer, among other things, to review certain issuer information and have a reasonable basis for believing such information is accurate in all material respects and from a reliable source, before the broker-dealer initiates quotations for an OTC security. Once quotations are initiated in an interdealer quotation system, however, the rule generally does not require an ongoing review of issuer information and thus may allow other broker-dealers to continue quotations in perpetuity.

    Broker-Dealer Registration. In general, broker-dealer registration is required if a person is "engaged in the business" of effecting transactions in securities. Registered broker-dealers are subject to SEC and FINRA oversight, including with respect to training, statutory disqualification, and supervision, in order to help assure compliance with the federal securities laws.

    Suspicious Activity Reports. Broker-dealers must file suspicious activity reports, or SARs, with regulators to facilitate the detection of illegal activity. The SEC and law enforcement use SARs, among other things, to help uncover potential market manipulation, Ponzi schemes, insider trading, and other fraud. Broker-dealers must develop policies and procedures to identify unusual activity and determine whether to file a SAR.

    Panelists

    • Troy Carlson, S.V.P., & Head of Corporate & Private Client Services, FIG Partners
    • Faith Colish, Counsel, Carter Ledyard & Milburn LLP
    • James Fiebelkorn, V.P. & Global AML Officer, Ameriprise Financial Services Inc.
    • Christopher Gerold, Chief of the New Jersey Bureau of Securities
    • Sarah Green, Chief Financial Crimes Officer, Vanguard Group, Inc.
    • Yvonne Huber, V.P., Market Regulation, FINRA
    • Michael Rufino, E.V.P. & Head of Member Regulation – Sales Practice, FINRA
    • Ignacio Sandoval, Partner-Elect, Morgan Lewis
    • Daniel Zinn, General Counsel, OTC Markets
  • 1:00 p.m. ET | Lunch

  • [+]2:00 p.m. ET | Panel Three – Additional Ways to Combat Retail Investor Fraud

    Transfer Agents. Transfer agents, among other things, are responsible for reissuing stock certificates in connection with a sale, and where appropriate removing a "restrictive legend" stating that the securities may not be resold absent Securities Act registration or an exemption. Bad actors may acquire restricted shares and then attempt to resell them, and remove the restrictive legend, in furtherance of a fraudulent or manipulative scheme. In these cases, transfer agents can play an important role in protecting retail investors if they prevent inappropriate removals of restrictive legends.

    Trading Halts. FINRA, as the self-regulatory organization responsible for the OTC market, has the authority under certain circumstances to halt trading in an OTC security. This positions FINRA to potentially stop a fraud or manipulation in progress by halting trading in the security. FINRA's rule generally authorizes a trading halt for an "extraordinary event" that has a "material effect on the market" for the OTC security.

    Investor Education. The first line of defense in combating retail fraud is educating investors so that they can better protect themselves. The Commission, FINRA, industry and consumer groups, and others regularly publish investor alerts, guides and other educational materials.

    Panelists

    • David Becker, General Counsel & Chief Risk & Compliance Officer, Equiniti Trust Company
    • Cromwell Coulson, President & CEO, OTC Markets
    • Robert Franz, Senior Director, Compliance, Broadridge Financial Solutions
    • Christopher Gerold, Chief of the New Jersey Bureau of Securities
    • Mark Harmon, Partner, Hodgson Russ LLP
    • Andrea Manning, Corporate Counsel, Computershare
    • Christy Oeth, Chief Compliance Officer, Virtu Financial
    • Michael Paley, Assistant Regional Director, Division of Enforcement
    • Chris Stone, V.P., Transparency Services, FINRA
    • Gerri Walsh, S.V.P., Investor Education, FINRA
  • 3:30 p.m. ET | End of Program



April 23, 2018: Roundtable on Market Structure for Thinly-Traded Securities

 
Press Release: SEC Staff to Host Roundtable on Market Structure for Thinly-Traded Securities

Sunshine Act Notice

Transcript

Webcast Archive

Meeting Materials


Agenda: Roundtable on Market Structure for Thinly-Traded Securities (Panelists as scheduled to appear)


  • [+]9:30 a.m. ET | Opening Remarks

    Opening Remarks by Brett Redfearn, Director, Division of Trading and Markets

  • [+]9:35 a.m. ET | Commission Staff Presentation

    Presentation by Alex Jadin, Special Counsel and Policy Advisor, Division of Trading and Markets, on "Empirical Analysis of Liquidity Demographics and Market Quality for Thinly-Traded NMS Stocks."

  • [+]9:45 a.m. ET | Panel One – Challenges in Market Structure Performance of Thinly-Traded Exchange-Listed Equity Securities

    Panelists

    • Steve Cavoli, Senior Vice President, Virtu Financial
    • Adam Epstein, Founder, Third Creek Advisors LLC
    • Brian Fagen, Head of Execution Strategy, Deutsche Bank
    • Bryan Harkins, Executive Vice President and Head of U.S. Markets, CboeBZX
    • Frank Hatheway, Chief Economist, Nasdaq OMX Group Inc.
    • Ovi Montemayor, Managing Director, Financial Markets Services, TD Ameritrade
    • Ari Rubenstein, CEO, GTS Securities LLC
    • Jason Vedder, Director of Global Trading and Operations, Driehaus Capital Management LLC
  • 11:30 a.m. ET | Break

  • [+]11:45 a.m. ET | Panel Two – Potential Improvements in Market Structure for Thinly-Traded Exchange-Listed Equity Securities

    Panelists

    • Tal Cohen, Senior Vice President, North American Equities, Nasdaq
    • Chris Concannon, President and Chief Operating Officer, CboeBZX
    • Stacey Cunningham, Chief Operating Officer, NYSE Group
    • Brian Frambes, Co-Head Global Cash Trading, Fidelity Management & Research Co.
    • Brad Katsuyama, CEO, IEX Group Inc.
    • Joe Mecane, Head of Execution Services, Citadel Securities
    • Robert A. Schwartz, Professor of Finance, Baruch College, The City University of New York
    • Owain Self, Global Head of Execution Services, Millennium Management LLC
  • 1:30 p.m. ET | Lunch Break

  • [+]2:15 p.m. ET | Panel Three – Market Structure Performance and Potential Improvements for Thinly-Traded Exchange-Traded Products (ETPs)

    Panelists

    • Josh Kulkin, Head of Trading, Jane Street Capital LLC
    • David LaValle, U.S. Head of SPDR ETF Capital Markets, State Street Global Advisors
    • Phil Mackintosh, Global Head of Economics and Research, Nasdaq
    • Laura Morrison, Senior Vice President and Global Head of ETPs, CboeBZX
    • Greg Sutton, Managing Director, Citigroup Global Markets Inc.
    • Charles Thomas, Head of U.S. ETF Capital Markets, Vanguard Group Inc.
    • Kumar Venkataraman, Professor of Finance, Southern Methodist University
    • Doug Yones, Head of Exchange Traded Products, NYSEArca
  • 3:30 p.m. ET | End of Program

We’ve established roundtable meetings to hear from a broad diversity of views on discrete equity market structure issues, which will better inform the SEC as it carries out its mission to ensure that markets are fair, orderly,
and efficient.

— Division of Trading and Markets Director
Brett Redfearn