Broker-Dealer Regulation (Paz)
Faculty
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| Marlon Quintanilla Paz Lecturer in Law mquintan@law.upenn.edu |
Additional Information
Skills Training
Other Professional Skills: • Develop a working knowledge of the laws and regulatory structures governing investment banking, money managers, securities markets, and related financial institutions.
• Analyze statutes, regulations, judicial decisions, administrative guidance, enforcement actions, and business facts to identify registration, conduct, supervision, market-structure, and enforcement issues.
• Exercise sound legal and strategic judgment by evaluating regulatory risk, advising financial institutions.
Grading
10% Participation,
90% Exam
Exam
Multiple Choice,
Short Answer,
Take Home,
Open-Book
With Permission of Instructor
Class meets in person.
Course Continuity
Students are encouraged to stay home if you are ill or experience flu-like symptoms. If you miss a class for any reason, it is still your responsibility to make up the work missed.
I offer the following to students who miss class due to illness:
- Class sessions are regularly recorded. I will make these recordings routinely available on the course site to everyone in the class.
- I will make PowerPoint slides or other class materials routinely available on the course site to everyone in the class.
Meeting Times/Location
M 4:30PM - 6:20PM
Silverman Hall 240A
Category
Upper-Level
Credits
2.0
The U.S. capital markets have evolved since 24 brokers signed the Buttonwood Agreement on Wall Street in 1792. Trading has moved from coffee houses and exchange floors to electronic markets, mobile applications, algorithmic systems, and blockchain networks. The legal framework has grown with the markets. Investment banks, money managers, securities exchanges, and other financial intermediaries operate under overlapping federal, state, and self-regulatory requirements.
This course examines how financial institutions conduct securities businesses in the United States and how lawyers advise, supervise, examine, and enforce against those institutions. The course focuses on broker-dealer regulation while comparing the duties and regulatory treatment of investment advisers. Students will study the federal securities laws, SEC regulations, FINRA rules, judicial decisions, regulatory guidance, and enforcement actions governing investment banking, brokerage, investment advice, trading, custody, customer protection, and market structure.
The course takes a practice-oriented approach. Through case studies and realistic problems, students will analyze how a financial institution forms and registers a regulated business, develops new products, manages conflicts, communicates with investors, handles customer assets, supervises employees, responds to examinations, and addresses potential violations. Topics include broker and dealer status, investment adviser registration, Regulation Best Interest, the adviser fiduciary duty, private placements, research, best execution, payment for order flow, market manipulation, short sales, Regulation M, financial responsibility, custody, books and records, anti-money-laundering controls, cybersecurity, artificial intelligence, digital assets, tokenized securities, and payment stablecoins under the GENIUS Act.
The course also examines the relationship among regulation, enforcement, innovation, and market risk. Students will consider the lessons of major market failures and enforcement matters, including the financial crisis, the collapse of major brokerage firms, the Madoff fraud, cyber incidents, recordkeeping failures, and emerging misconduct involving artificial intelligence and crypto assets. The course will address the territorial reach of U.S. law when foreign institutions, markets, and investors interact with the United States.
Students will develop the legal judgment and practical vocabulary required for work at a major law firm, investment bank, broker-dealer, investment adviser, financial technology company, the SEC, FINRA, or another financial regulator. By the end of the course, you should understand how securities businesses operate, identify the regulatory issues presented by a proposed activity, evaluate enforcement risk, and present clear advice to business leaders, compliance officers, regulators, and clients.
Business and Corporate Law Learning outcomes: Demonstrate a core understanding of business and corporate law; Perform legal analysis in the context of business and corporate law; Communicate effectively on topics related to business and corporate law; Demonstrate an understanding of the interconnection between the world of business and finance and that of business and corporate law, and how they affect other areas of law and society.
Administrative and Regulatory Law Learning outcomes: Demonstrate a core understanding of administrative and regulatory law and the administrative process, including the role of statutory authorization and work of administrative agencies; Perform legal analysis in the context of administrative and regulatory law; Communicate effectively on topics related to administrative and regulatory law; Demonstrate an understanding of the role administrative and regulatory law play in our legal system and in society as a whole.