Month: May 2017

Dan M. Smolnik Presents at Annual Meeting of the Connecticut Bar Association

Posted on by Liam Mennitt

Pastore & Dailey is proud to announce that Dan M. Smolnik, Special Counsel at Pastore & Dailey, has been asked to present his views on recent developments in Tax Law at the June 12, 2017 Annual Meeting of the Connecticut Bar Association. Mr. Smolnik will be addressing two new developments:

  1. The new rules on self-employment tax affecting tiered partnerships; and
  2. The new rules regarding disguised sales and how these rules now affect a much broader array of transactions than before.

In particular, he expects the new disguised sales rules will affect virtually all partnerships going forward. Mr. Smolnik has practiced in the areas of tax, business transactions, and tax-exempt organizations for almost 30 years and has helped numerous organizations thrive while meeting their responsibilities and opportunities with tax and business law. He has extensive experience representing insurance companies, banks, and international corporations in tax, regulations and organizational law issues.

More information: Two New Tax Rules That Affects Partnerships, LLCs and Other Pass-through Entities (pdf) by Dan M. Smolnik

FINRA Fines Member Firms for Violation of Its Recordkeeping Provisions and Issues Cybersecurity Warning

Posted on by Liam Mennitt

FINRA fined twelve of its largest member firms a combined $14.4 million for violation of its Rule 4511 and SEC Rule 17a-4(f) for their failure to keep hundreds of millions of electronic documents in a WORM or “write once, read many” format.  The WORM format is designed to ensure that important firm records including customer records containing Personally Identifiable Information are not altered after they are written.

The firms included Wells Fargo & Co., RBC Capital Markets, LPL Financial, RBS Securities, SunTrust Robinson Humphrey, Georgeson Securities Corp and PNC Capital Markets.  FINRA also found that these firms violated its Rule 3110, Supervision, and several other SEC recordkeeping provisions, Securities Exchange Act Section 17(a) and Rules 17a-4 (b) and (c), thereunder.

FINRA noted that such records must be maintained in order to ensure member firm compliance with investor protection rules and that over the last decade the volume of such data being stored electronically has risen exponentially.  In a cybersecurity warning, FINRA stated:

there have been increasingly aggressive attempts to hack into electronic data repositories, posing a threat to inadequately protected records, further emphasizing the need to maintain records in WORM format.

P&D is pleased to note that its newest partner, John R. “Jack” Hewitt is one of the country’s foremost cybersecurity authorities, and a major part of his practice is advising broker-dealers, RIAs and banks on their adherence to SEC, FINRA, CFTC and state cybersecurity requirements.  Among other things, he advises firms on information security programs, guides them through cyber-incidents and represents them in the event of a regulatory inquiry.  Mr. Hewitt regularly conducts cybersecurity audits for broker-dealers and investment advisers, and was the SEC appointed independent outside consultant in the first major SEC cybersecurity enforcement action.  He is the author of Cybersecurity in the Federal Securities Markets, a BloombergBNA publication, and Securities Practice & Electronic Technology, an ALM treatise. Mr. Hewitt is the Co-Chair of the American Bar Association, Business Section, White Collar Crime Subcommittee on Cybersecurity.

Read FINRA’s official announcement

FINRA Fines Member Firms For Violation of Its Recordkeeping Provisions and Issues Cybersecurity Warning

Posted on by Liam Mennitt

P&D CLIENT ALERT

FINRA fined twelve of its largest member firms a combined $14.4 million for violation of its Rule 4511 and SEC Rule 17a-4(f) for their failure to keep hundreds of millions of electronic documents in a WORM or “write once, read many” format.  The WORM format is designed to ensure that important firm records including customer records containing Personally Identifiable Information are not altered after they are written.

The firms included Wells Fargo & Co., RBC Capital Markets, LPL Financial, RBS Securities, SunTrust Robinson Humphrey, Georgeson Securities Corp and PNC Capital Markets.  FINRA also found that these firms violated its Rule 3110, Supervision, and several other SEC recordkeeping provisions, Securities Exchange Act Section 17(a) and Rules 17a-4 (b) and (c), thereunder.

FINRA noted that such records must be maintained in order to ensure member firm compliance with investor protection rules and that over the last decade the volume of such data being stored electronically has risen exponentially.  In a cybersecurity warning, FINRA stated:

there have been increasingly aggressive attempts to hack into electronic data repositories, posing a threat to inadequately protected records, further emphasizing the need to maintain records in WORM format.

P&D is pleased to note that its newest partner, John R. “Jack” Hewitt is one of the country’s foremost cybersecurity authorities, and a major part of his practice is advising broker-dealers, RIAs and banks on their adherence to SEC, FINRA, CFTC and state cybesecurity requirements.  Among other things, he advises firms on information security programs, guides them through cyber-incidents and represents them in the event of a regulatory inquiry.  Mr. Hewitt regularly conducts cybersecurity audits for broker-dealers and investment advisers, and was the SEC appointed independent outside consultant in the first major SEC cybersecurity enforcement action.  He is the author of Cybersecurity in the Federal Securities Markets, a BloombergBNA publication, and Securities Practice & Electronic Technology, an ALM treatise. Mr. Hewitt is the Co-Chair of the American Bar Association, Business Section, White Collar Crime Subcommittee on Cybersecurity.

Click here to read FINRA’s official announcement.