SEC Rule 15a-6 Enforcement

Last week the Securities and Exchange Commission ("SEC") charged four India-based financial services firms for providing brokerage services to U.S. institutional investors without operating under a 15a-6 chaperoning agreement or registering as a broker-dealer. The four firms paid more than $1.8 million combined to settle the SEC's charges. The SEC said it is continuing to look for potential violations at other firms. These actions may signal greater SEC scrutiny of foreign firms' U.S. brokerage activities.

Absent an applicable exception or exemption, Section 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") generally prohibits a broker or dealer from making use of the mails or any means or instrumentality of interstate commerce (the "jurisdictional means") to effect any transactions in, or to induce or attempt to induce the purchase or sale of, any security without being registered with the SEC as a broker-dealer.