Carlile Patchen & Murphy LLP has one of the most experienced securities practice groups in the State of Ohio. We are proud to be a nationally recognized leader in the field of securities regulation and recruiting law. Our attorneys provide counsel to broker-dealers, investment advisers, registered representatives, banks and issuers of securities. We have represented numerous small, regional, and national, securities and investment firms, both public and closely held companies.
Members of our Securities Law Practice Group have appeared in federal and state courts and arbitration proceedings across the country. Additionally, we have participated in state and local bond offerings, private placements, initial public offerings, periodic reporting documentation, going-private transactions, mergers and acquisitions and venture capital transactions. We offer the strength of a national practice with the benefit of personalized service.
Few businesses are more closely regulated than those involved in the purchase and sale of securities. Broker-dealers and their registered representatives are subject to scrutiny by the Financial Industry Regulatory Authority (FINRA), the U.S. Securities and Exchange Commission (SEC) and the Ohio Division of Securities.
For more than 40 years, Carlile Patchen & Murphy LLP has helped clients through the rigorous process of regulatory compliance. Our thorough technical knowledge of state and federal securities laws, creativity in structuring transactions, and experience in negotiating transactions with investment bankers, institutional investors and venture capitalists results in compliance and innovation in executing your business concept.
We have extensive experience with the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, FINRA regulations and the various state securities laws. We have worked closely with our broker-dealer clients advising on current industry practices and procedures. We routinely assist our clients in responding to regulatory audits and inquiries, customer complaints and internal investigations.
When a regulatory investigation becomes an enforcement matter, our clients turn to us for representation in civil, administrative and regulatory matters before FINRA, the SEC, the Commodity Futures Trading Commission (CFTC), and the Ohio Division of Securities. We also provide representation in FINRA arbitrations involving brokerage customer claims.
We provide the following services on behalf of our broker-dealer clients:
Carlile Patchen & Murphy LLP has helped clients through the rigorous process of regulatory compliance. With a significant understanding of the regulatory audit process, we have developed a list of items and records subject to audit and can perform mock audits at your location to ensure that you’re ready.
Raising capital is one of the most difficult tasks facing the privately held business, but it is also one of the most critical. The extent to which an entrepreneur can raise capital is often the difference between the success and failure of a business. An infusion of capital into a business in the form of an equity or equity-equivalent investment provides more than additional cash to the business; it also improves the borrowing base for securing credit.
Sources of financing include friends and relatives, individual investors, public and private pension funds, institutional investors (such as insurance companies and investment companies), venture capital firms and the public markets. Raising capital from these sources, however, brings into play complex state and federal securities laws.
Federal securities laws apply to every sale of securities in any state, including Ohio, regardless of the type of business entity or the sale price of the securities. Likewise, the Ohio Securities Act applies to every sale of securities in Ohio, and other states have similar statutes. Both state and federal laws require registration with a regulatory body unless an exemption from registration is available.
The securities laws were enacted to protect investors. These laws focus on disclosure to investors, providing them with all information that is material to the investment decision. The securities laws and regulations specify the types of information which must be disclosed to investors. Our attorneys can help with providing an effective guide through these provisions.
In a private placement of securities, we would perform the following tasks:
In addition to preparing the documents and making the filings described above, our attorneys oversee necessary filings with applicable regulatory agencies.
The effective defense of securities claims brought against the financial services industry and its representatives requires experience with the industry and these kinds of claims. Broker-dealers across the country have relied upon Carlile Patchen & Murphy LLP attorneys to successfully defend claims against their representatives. Our securities litigation team represents broker-dealers, registered representatives, and investment advisors in cases arising from the sale of securities. We regularly appear on our clients’ behalf in the FINRA and American Arbitration Association (AAA) arbitration forums, as well as state and federal court.
Among the handful of firms across the nation that have practices devoted to these kinds of claims, our attorneys are uniquely experienced to handle your case. Our attorneys are asked to assist with training many of the arbitrators who hear FINRA claims in Ohio and the Midwest. We authored the standard Ohio jury instructions for statutory securities claims that were subsequently adopted by the Ohio Judicial Conference. Our attorneys have spoken at national and regional conferences of securities attorneys and write for national and local publications. Collectively, we have tried hundreds of these claims before FINRA, and its predecessors, the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE).
Broker-dealers, banks and insurance companies facing these claims select our firm because we understand their business. Securities claims have ramifications that are not present in other types of general litigation. The public reporting of claims and settlements affects registered representatives for years to come. Some claims can generate regulatory attention if not handled carefully. The securities industry faces unique records production and retention issues. We know your business and are always sensitive to these issues.
We have seen and successfully defended claims arising from numerous investment products and strategies, both common and unusual. Among these claims, we have represented our clients in cases involving:
With increasing frequency, stockbrokers and investment advisors leave their firms for competitors in search of greener pastures. However, these moves are fraught with legal risks for all the parties involved. Many registered representatives are contractually prohibited from soliciting their clients following a resignation. Most representatives are forbidden from removing client files or records. With so much at stake, it’s not unusual for a suit to be filed shortly after the resignation occurs. Our firm regularly represents broker-dealers and registered representatives in these kinds of actions.
We represent broker-dealers, registered representatives and investment advisors in matters involving non-solicitation agreements, trade secrets and breach of loyalty or fiduciary duty. We represent both firms seeking to enforce these claims and representatives seeking to defend them. Over the years, our attorneys have handled hundreds of these cases across the country, on behalf of both brokerage firms and registered representatives.
Firms that recruit registered representatives from their competitors are often held accountable for the actions of their recruits. Carlile Patchen & Murphy LLP routinely provides pre-employment counseling to identify legal risks and avoid costly litigation. We have experience with numerous forms of agreements and have dealt with nearly every brokerage firm in this business. We can provide a strategy that will best protect your firm and your recruit from the risk and expense of litigation.
In 2004, three of the largest brokerage firms created “The Protocol for Broker Recruiting.” This agreement established what brokers and investment advisors can and cannot do in moving from one firm to another.
Today, there are over 1,700 brokerage and investment advisory firms who have joined the Protocol. Registered representatives who comply with this agreement can move from one firm to another without the fear of litigation over their non-solicit and non-compete contracts.
Carlile Patchen & Murphy LLP was one of the first to counsel and litigate issues related to the Protocol. We created a website dedicated to the Broker Protocol that reports all the current member firms and is updated each week as a new list becomes available.
We also provide counsel to clients planning to join the Broker Protocol, file the necessary agreements and help representatives comply with its terms. Our attorneys have testified as expert witnesses in arbitrations and state court and regulatory proceedings upon the creation, meaning and application of the Broker Protocol.
Actions enforcing or defending non-solicitation and confidentiality claims move very quickly. Typically, the firm losing the employee will go to court with very little notice and seek temporary or preliminary injunctive relief prohibiting a former employee from contacting, soliciting or even serving its former customers. If the employee is a FINRA-registered broker, the matter must then be sent to FINRA arbitration where special rules were created to deal with these kinds of cases. Our firm responds immediately in these kinds of cases and can often defuse a newly filed action at a limited cost to our clients.
We also have significant experience with raiding cases – claims in which one firm is accused of systematically hiring the employees or representatives of the other firm, often devastating the former branch. From cases involving small firms and individual brokers to complex raiding cases involving hundreds of representatives, we offer practical and efficient solutions for our clients.
We represent clients who are asserting or defending recruiting, covenant and trade secret claims in state or federal court, FINRA and the AAA, including those involving:
All the traditional Human Resources issues that arise out of the employee/employer relationship also occur in the context of the securities industry and are often the subject of FINRA arbitrations. Our lawyers have successfully handled race, gender and age-based claims, wage and hour claims, and unlawful termination claims before FINRA panels.