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Benjamin P. Edwards

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Benjamin Edwards joined the faculty of the William S. Boyd School of Law in 2017. He researches and writes about business and securities law, corporate governance, arbitration, and consumer protection.

Prior to teaching, Professor Edwards practiced as a securities litigator in the New York office of Skadden, Arps, Slate, Meagher & Flom LLP. At Skadden, he represented clients in complex civil litigation, including securities class actions arising out of the Madoff Ponzi scheme and litigation arising out of the 2008 financial crisis. Read More

Last month, the SEC released a report on Mandatory Arbitration Among SEC-Registered Advisers.  The report tackles a basic dispute resolution problem.  For context, investors with a problem with a financial adviser will likely have to go to arbitration.  If their financial adviser is an associated person for a FINRA-registered brokerage firm, the dispute will likely go through FINRA arbitration.  While the FINRA system isn’t perfect, it’s often much better than any other alternative out there.  FINRA has made improvements to its arbitration process over the years resulting in a forum that has become fairer for investors.

But many financial advisers are not brokers.  They are registered investment advisers.  They usually charge fees on an assets under management basis.  Where do disputes against these RIA firms go?  It depends on what kind of pre-dispute arbitration agreement exists between the adviser and the investor.  The SEC report details the current options available to investors.

Here’s the short version, far too many RIAs have put in place arbitration agreements that effectively frustrate an investor’s ability to resolve a complaint.  Most of these agreements force investors to resolve their disputes through AAA–the American Arbitration Association.  Within that forum, Advisers generally elect to apply…

The Nevada Supreme Court recently delivered an opinion on Series LLCs.  These entities are relatively new and not much caselaw on them currently exists so it’s good to get some more guidance about how to deal with them.

The case, Federal Housing Finance Agency v. Saticoy Bay LLC, reached the Nevada Supreme Court on a certified question from the Ninth Circuit about how to obtain jurisdiction over series LLC entities.  In short, the question the Ninth Circuit wanted answered was whether a court obtained jurisdiction over series entities by naming the master LLC itself or whether the individual series must be sued in its own name to establish jurisdiction over it?  Nevada’s Supreme Court answered that naming the individual series LLC at issue was not an “optional” matter.  To establish jurisdiction over a series entity, the entity itself must be sued.  It found that the “plain language of NRS 86.296(2) does not allow a party to sue a master LLC in lieu of a series LLC at the party’s discretion.”

The Belmont University College of Law invites applications for entry-level and junior-
lateral candidates in the area of business law for a tenure-track, faculty position to
begin Fall 2024. 
The Belmont College of Law encourages applications from people whose background,
life experiences, and scholarly approaches would contribute to the diversity of our
faculty, curriculum, and programs.
Applicants must possess a J.D. from an accredited U.S. law school and must
demonstrate strong scholarly potential and a commitment to excellence in teaching. 
Belmont is an EOE/AA employer.  Belmont College of Law reserves the right to
exercise a preference for those candidates who support the goals and missions of the
University.
If interested, please submit a letter of interest and curriculum vitae to the Chair of the
Faculty Recruitment Committee, Professor Kristi W. Arth, using the recruitment
committee’s email address – lawfaculty.recruitment@belmont.edu. If you have
questions about the position or Belmont University, please contact Professor Arth at
kristi.arth@belmont.edu.
Belmont University is a private, Christian university focusing on academic excellence
and is located in the heart of Nashville, one of the fastest growing and most culturally
rich cities in the country.  Belmont is the second largest private university in Tennessee
approximating 9,000

…

Submissions and nominations of articles are being accepted for the fourteenth annual Fred C. Zacharias Memorial Prize for Scholarship in Professional Responsibility.  To honor Fred’s memory, the committee will select from among articles in the field of Professional Responsibility with a publication date of 2023.  The prize will be awarded at the 2024 AALS Annual Meeting in Washington, DC.  Please send submissions and nominations to Professor Samuel Levine at Touro Law Center: slevine@tourolaw.edu.  The deadline for submissions and nominations is September 1, 2023

California Western School of Law (CWSL) is seeking lateral candidates for a full-time faculty position teaching Professional Responsibility and serving as a Director of CWSL’s STEPPS Program.  STEPPS is a key component of CWSL’s innovative sequential experiential curriculum, bridging the gap between the first-year legal skills program and third-year clinical and externship programs.  STEPPS integrates the teaching of professional responsibility with an experiential small “law firm” component. 

The role combines the doctrinal teaching of professional responsibility and an administrative component managing the STEPPS Program.  The majority of the time spent in the role will be dedicated to the teaching component, however, the Director will also work closely with the STEPPS staff coordinator to supervise the adjunct professors who teach the experiential component of the program.  We welcome lateral candidates with an established record of scholarship who are seeking tenured/tenure-track positions.  We also welcome clinical faculty seeking a clinical position with security of appointment under ABA Accreditation Standard 405(c).  The timing of this job opening corresponds to a periodic review of the STEPPS curriculum, and so the new Director will both be directing a mature program, but also be part of the process of ensuring the program remains innovative moving forward.  …

Earlier today the Supreme Court released its opinion in Slack Technologies LLC v. Pirani.  It ruled that a plaintiff seeking to bring a Section 11 claim must trace their stock to a registration statement.  Of course, companies today now go public through direct listings or other methods where the pool of publicly traded stock includes some issued pursuant to registration statement and some from other prior holders.  Functionally, this often makes it impossible to for anyone buying shares in the open market to trace whether their shares were issued pursuant to a registration statement or simply sold by someone else.

The unanimous decision follows the vast majority of circuit courts to consider the issue.  It pointed out that the issue was previously addressed by Judge Friendly in Barnes v. Osofsky, 373 F. 2d 269, 272 (CA2 1967).  

If you regularly read speeches given by SEC Commissioners and staff, you may have noticed a change in the standard opening.  For most of my career, the remarks always began with something to this effect:

Before I begin, I must give the customary disclaimer that the views I express today are my own and do not necessarily reflect the views of my fellow commissioners or the staff.

That standard disclaimer came from Commissioner Crenshaw on March 30, 2023 in the opening to her remarks to the Fixed Income Forum.  And about a month ago, Chair Gensler’s standard disclaimer on April 24, 2023 to the Annual Small Business Forum came out as:

As is customary, I would like to note that my views are my own, and I’m not speaking on behalf of the Commission or SEC staff.

But something has changed.  Chair Gensler gave the disclaimer this way on May 10, 2023 in remarks to the Municipal Securities Disclosure Conference:

My views are my own as Chair of the SEC, and I am not speaking on behalf of my fellow Commissioners or the staff (emphasis added)

This change continues forward to Chair Gensler’s remarks today to to the Investment…

As Joan already flagged, Delaware litigation has broken out over whether TripAdviser can reincorporate to Nevada.  The Complaint in that action argues that Delaware courts should enjoin the move and prevent the corporation from moving to Nevada.  The New York Post has also picked up on the reincorporation trend.  In my view, the conditions under which a corporation may exit a jurisdiction and reincorporate elsewhere is a valid question of its current state’s corporate law.  While Delaware may want to impose appropriate conditions on some departures, I doubt it wants to become the Hotel California of corporate law–where you can check in any time you want, but you can never leave.

There are undoubtedly material differences between Delaware and Nevada law.  As I covered here at the time, Nevada’s statutory business judgment rule imposes more limits on liability that Delaware law.  Nevada’s Supreme Court has explained that establishing liability under Nevada law “plainly requires the plaintiff to both rebut the business judgment rule’s presumption of good faith and show a breach of fiduciary duty involving intentional misconduct, fraud, or a knowing violation of the law.”  

Nevada’s law may be better for some corporations than Delaware’s law.  Duke’s Ofer Eldar…

As regular readers of this blog will know, you can’t go touting crypto-securities without disclosing how much you’ve been paid to push those products.  I first wrote about this issue in 2018 after Evander Hollyfield attracted attention for promoting the fraudulent AriseBank coin. The same issue showed up again with Kim Kardashian last year.  Now, we’ve got the SEC taking action against eight more:

  • Lindsay Lohan

  • Jake Paul

  • DeAndre Cortez Way (Soulja Boy)

  • Austin Mahone 

  • Michele Mason (Kendra Lust)

  • Miles Parks McCollum (Lil Yachty)

  • Shaffer Smith (Ne-Yo)

  • Aliaune Thiam (Akon)

They all allegedly touted TRX and BTT without disclosing that they were paid to do so or the amount they were paid.  The enforcement actions arise out of the SEC’s pursuit of Justin Sun for allegedly fraudulently manipulating the secondary market for TRX through wash trades.  

I remain skeptical about much of the asset valuation in the crypto and NFT space.  I’d expect that the SEC will continue to pursue these kinds of actions when it has evidence that much of the market for a particular cryptocurrency or type of NFT is largely illusory wash trading designed to generate the appearance of value to suck in money.

Soulja Boy and…

A full court press to lower the gates to private markets has emerged.  Last month, Duke’s Gina-Gail Fletcher testified before the House Committee on Financial Services, Subcommittee on Capital Markets.  The Committee titled the hearing: “Sophistication or Discrimination? How the Accredited Investor Definition Unfairly Limits Investment Access for the Non-wealthy and the Need for Reform.”  It considered a range of bills which would eat away at the accredited investor standard and allow broader access to private markets.

The U.S. Congress isn’t the only legislative body considering whether to allow ordinary retail investors to buy private offerings.  Nevada has introduced legislation which would create an intrastate offering exemption which would allow Nevadans making about $65,000 a year (Nevada’s median income) to be sold illiquid, private placements.  The Nevada proposal would create “Nevada certified investors” as an intrastate offering category.  The proposal describes it this way:

“Nevada certified investor” means a natural person who is, or a married couple who each are, a resident of this State  and who, at the time an offer to sell or sale of a security is made to the person or couple: 1. Holds an ownership interest of more than 50 percent in a 

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