The Beck Law Firm, LLC Blog

Welcome to The Beck Law Firm Blog. Start Here First.

 

Hello, and welcome to The Beck Law Firm, LLC blog, by Georgia attorney Joel Beck.  Here, you'll find information and commentary on Joel's four practice areas: securities regulation and compliance and financial markets litigation, basic estate planning, business law, and criminal defense.  Use the categories to the right of the screen to find posts in specific topics, and use the search bar on the right to do a custom search of the blog.  Below, you'll find a starting point for an introductory post in each practice area.

Please understand that while we've designed this blog to be helpful and informative, the blog is not designed to provide you with legal advice, nor can it be a substitute for legal advice specific to your situation.  If you need legal advice, please consult a lawyer.  And, of course, if Joel can be of assistance to you, please call on him.  

Be sure to look around and enjoy the blog, and check back from time to time as new posts are added.

Suggested Starting Points:

For Securities Compliance and Regulatory Matters, Joel suggests you start here with this post.

For basic estate planning in Georgia, including wills, powers of attorney, and health care directives, Joel suggests you start here with this post.

For business law issues, including forming a corporation or LLC in Georgia, Joel suggests you start here.

And finally, for criminal defense matters in Gwinnett County, Georgia and the greater metro Atlanta area, Joel suggests you start here.

 

Brokers/Registered Reps.: The Basics of Criminal Cases and The Securities Industry

Brokers and registered representatives who are dealing with past or present criminal cases need to understand a few things about how their criminal case - even those seemingly unrelated to the financial services industry - affects their ability to be associated or registered with a broker-dealer.  The reality is that an unrelated conviction can have significant consequences to a broker's ability to work in the industry.  Here's a high level overview of some of the key issues:

*  A person convicted of any felony is generally statutorily disqualified from being associated (and registered) with a broker-dealer for ten years.  

* A person who enters a plea of nolo or guilty to any felony and to certain misdemeanors, and who is sentenced under a court program (such as deferred adjudication, some first offender programs, etc.) that will later result in no conviction and having the case dismissed, may be disqualified from being associated with a broker-dealer for a period of time (commonly during the period of probation before the case is dismissed).  

* A person convicted of certain misdemeanor offenses may be disqualified for ten years. 

* Criminal charges and convictions not properly reported on the Form U4 might result in disciplinary action against the broker as well (See the U4 category of the blog for more info. on that area).

By way of example, a felony conviction for possession of cocaine generally results in a disqualification.  A misdemeanor theft conviction might also result in disqualification.  Neither of these cases seem to have anything to do with the financial services industry, but they nevertheless might prevent a person from entering the field, or continuing their work in the industry, at least for a period of time.

If you have a disqualifying criminal event in your history, it may prevent you from being eligible to work in the industry, at least for some time, absent obtaining special approval through an Eligibility Proceeding (also known as an MC400 proceeding) with FINRA and the SEC.  If dealing with a current case that has not yet resolved, it is important to understand what result is disqualifying and what is not, so that you can seek to negotiate or obtain the best possible outcome that would still allow you to be eligible to continue working in the industry.  

Joel Beck, a Georgia attorney with significant experience in the securities compliance arena, often represents registered representatives across the country in FINRA, SEC and other regulatory matters.  In addition to these matters, Joel is also available to represent Georgia clients in business law, estate planning, and criminal defense matters, including white collar type matters relating to the financial markets.  Find out more here in this blog, as well as on the firm's website.  Remember, don't base your decision to hire counsel on a website or blog; contact Joel for more information on his background and experience.  

What to Do When Arrested in Georgia

If you have the unfortunate occasion to find yourself being arrested in Georgia, or have recently been arrested, you have some serious issues to resolve.  Knowing what to do, and when, can be challenging. First things first:  get a lawyer.  Regardless of the degree of seriousness, I believe that you can benefit from a criminal defense lawyer.  If you can't afford to hire a lawyer, the rule of thumb still applies - get an appointed lawyer to assist you through this process.

Beyond that general rule of thumb, here are some other do's and don'ts to consider:

*  Be respectful to those you encounter.  Whether its the police, the sheriff, or court staff, be respectful.  It can't hurt you, but it just might help you.  Save the trash talk for your friends because it is not going to help you in the criminal justice process.

*  If you're being arrested, don't resist.  That can hurt you, both physically, as well as in additional charges against you.  

*  Don't talk.  I can't stress this enough. The police and the prosecutors aren't looking out for you, and odds are really high that you will never talk yourself out of the situation.  If they want to question you beyond  your name, don't play along.  Don't give them more information to use against you.  

*  Don't talk means don't talk to others as well.  The jail is full of folks who would want to use whatever information they can get from you to help them.  And jail phones and visiting rooms are also often monitored and may be recorded.  Also, the backseat of many police cars are captured on video and your discussions there can be used against you as well.  Don't talk about the case, to anyone other than your lawyer.

*  Don't talk means don't use social media to post about the situation either.  Don't put up a video on youtube, don't put up incriminating pictures on facebook, and don't make admissions on any social media site or in email or text messages.  

*  Understand that the "jailhouse lawyer" giving you advice is also in jail with you.  That might not be the best and most wise advice you need to receive, so see Rule 1: get a lawyer.

*  Finally, once you have a lawyer, keep him or her updated on your contact information (to include your phone number, address, and email address) and respond to their requests for information from you.  If you don't help your lawyer, your lawyer will not be in a very good position to help you to resolve the situation in the manner most favorable for you.

Joel’s criminal defense practice is largely limited to metro Atlanta and to Gwinnett County, including Gwinnett State, Superior, Recorders and Magistrate courts, as well as municipal courts in Lilburn, Lawrenceville, Snellville, Duluth, Suwanee, Loganville, Norcross, and other courts across metro Atlanta including Forsyth County, Cobb County, DeKalb County, Fulton County, and the U.S. District Court for the Northern District of Georgia. 

If you have been accused of a crime, or are being investigated by law enforcement agencies, understand that you have a right not to speak with the police.  Exercise that right and contact The Beck Law Firm, LLC for a consultation.  If you are arrested, keep quiet, and seek to engage counsel immediately.  

 

FINRA's NAC Affirms OHO Panel Decision Against Firm, Upholding Finding of Willfulness. Result is Statutory Disqualification of a Firm.

On May 2, 2012, FINRA's National Adjudicatory Council issued an appeal decision in a disciplinary case.  The NAC affirmed findings that a broker-dealer violated industry rules because it sold four categories of securities not permitted by its membership agreement, maintained inadequate supervisory procedures with respect to the sale of certain securities, willfully failed to preserve emails, and failed to maintain and keep P&S blotters for certain business.  At the original hearing in this case, a FINRA Office of Hearing Officers panel decision from December 2010 made findings that the firm committed violations as alleged by FINRA's complaint, and fined the frm $18,500.  The NAC affirmed these findings and sanctions, as well as of the imposition of costs.  

Normally, that would be the end of the story, as a fine of only $18,500, with no other sanctions, is not terribly newsworthy.  Certainly it's a real sanction, and to many firms coughing up $18,500 to the regulators would be difficult.  But the willfulness findings in this case make the $18,500 sanction rather meaningless.

The OHO panel, and the NAC, found that the firm's violations of Section 17(a) of the Securities Exchange Act were "willful."  According to the decision, as a result, pursuant to Sections 3(a)(39)(F) and 15(b)(4)(D) of the Act, "a firm is deemed statutorily disqualified if itis found in a proceeding by a self-regulatory organization to have willfully violated the federal securities laws."  This means that while the firm was not suspended in this case, or did not otherwise have its business activities limited or curtailed, that the firm is essentially not eligible to continue doing business as a broker-dealer because it is now statutorily disqualified.  Sure, the firm may be able to continue this case through an appeal to the SEC, and it may be able to seek relief from the disqualification from FINRA and the SEC, but getting the desired result will be costly and difficult.  

I've blogged many times about the concept of willfulness as it relates to U4 issues, but as this case demonstrates, firms need to be aware of the willfulness concept and its application relating to Exchange Act violations.  

 

An "S Corporation"? That's a Tax Status, Not an Entity

Often, I'll get calls or inquiries from folks looking to form a business who tell me that they want to form a S corporation.  I often know what they mean, even though there really is no such thing incorporating a S corporation here in Georgia.  Let me explain.

Some of the most common business types are sole proprietorship, partnerships, corporations, and limited liability companies (LLC).  There are several other entity types allowed here, but they are not as prevalent as these 4 types.  So, when most people (but not all) start a business, they choose one of these.  And, because of the limited liability protection offered by corporations and LLCs, one of these two entity types are often the right choice for folks.  But  the choice of which entity a person should form is based on the answers to many questions, including the type of business to be conducted, manner in which it will be conducted, number of owners and the involvement level of the owners, and plans for the future of the business.

What many people don't know is that they can effectively have a "S corporation" whether they form a corporation or an LLC.  That's because a "S corporation" is not a type of entity; rather, it is a election (a choice) of how the business will be taxed.  So, a client can form either a Georgia corporation or a Georgia LLC and have it treated the same way for tax purposes by filing an S corp. election.  But, because it is a tax matter, you should consult your CPA for additional guidance before making this decision.  Your legal counsel, together with your CPA can provide you with guidance to make the best decisions and help to position your new business for success.

Forming a corporation or LLC with the state is not difficult and people can do it themselves very easily. But knowing what to do after that is vitally important as well.  In addition to selling their goods or services, business owners need to be careful to ensure that they sign their contracts the proper way to avoid making themselves liable for the business's activities where appropriate, that they keep and maintain the appropriate business records, make the required annual filings, make tax elections and file appropriate tax returns and forms, obtain business licenses, and more. In future posts, I'll discuss more of these items.

The System Worked. (Or, My Time as a Juror This Week).

I had jury duty this week.  After checking the system over the weekend, I found I had to report on Monday. And, although my county is a "one day or one trial" jury system, I was put on a panel late in the day on Monday, and then had to return on Tuesday after voir dire was completed.  I was confident I would not be selected to be on the jury in this criminal trial.  After all, I have worked as a police officer, and now in private practice I work in criminal defense among other areas of the law.  Certainly the state or the defense would be striking me, I thought.

I was wrong.

I was placed on this jury of twelve, plus an alternate (as an aside, another lawyer was also picked for this jury, to our mutual surprise).  The trial began Tuesday after lunch, and the State finished their case in chief that afternoon.  The defense presented their case this morning (Wednesday), we got our jury charge, took a quick lunch break, and had about two hours of spirited deliberations.  And I mean spirited.  There was some good, honest debate and discussion in that room and there were some very different opinions on the evidence and the case initially.  In the end, we all agreed on a verdict: not guilty on all counts.  There were three counts.  It was essentially a theft/fraud case, but I'll spare you the details here, as I don't think you'd find the case to be exciting or newsworthy.

I would have wanted to do some other things these last three days.  Being on a jury was not something I was looking forward to  It certainly was an inconvenience for all of us.  But it was a good experience for me, to see first hand a jury's deliberations in a criminal case (my prior jury service has all been civil), and to be refreshed by a group of 12 folks coming together to try to do what is required, and to try to get it right.

I was impressed at the approach taken in that room today.  Folks really wanted to hold the State to its burden of proof, and ensure that, before convicting someone of a crime, that they were really satisfied that the State proved the charges beyond a reasonable doubt.  I think we all agreed that it was certainly possible that the defendant in this case could have committed the offenses charged, and I think many jurors had a very strong suspicion that the defendant had indeed done so.  Nevertheless, as charged by the judge, we held to the standard of reasonable doubt - the same standard that we would want held up for us if we had been a defendant.  Based on that measuring stick, the State's case fell short - or at least it did in our view - and it was our view that mattered.

I don't know if a man "got away" with something this week, or if he really didn't do what was alleged.  I do know that the system worked today, and I think that's what's really most important here. For that, I'm thankful. 

Start Here First: Georgia Business Law

Whether you are considering starting a business here in Georgia, or are already a seasoned entrepreneur, having counsel that knows you and your business can be a great resource for help with business formation, contracts, leases, employment issues, and other day-to-day issues that arise in the life of a small business.

Counsel experienced with business law matters can assist you in selecting the right entity type for your business, and guide you through the differences between LLCs, LPs, corporations, partnerships, sole proprietorship, and more.  Working as a part of your advisory team, your counsel can discuss your business with you and your CPA so that your CPA can help determine how to treat the business for tax purposes. Then, going forward, your counsel can instruct you on how to care for and maintain your business to help shield the owners from personal liability where possible.  Remember that starting a LLC or a corporation isn't a one and done matter; care must be taken to keep the entity in good standing and to maintain the legally required records of the business.  And, if you are in business with others, you'll need a carefully crafted shareholders' or members' agreement to hep you and your co-owners resolve issues and disputes when they arise, including issues about what to do when it's time for someone to leave the business for whatever reason.

Once the business is established, counsel can assist in developing or reviewing customer and vendor contracts or other agreements, and assist with other legal needs that arise from time to time.  By having a relationship with a business lawyer in place early on, you'll have someone to call on when there is a need.

Be sure to watch for future posts on this category on entity selection, tax status elections, corporate record maintenance and more.

Start Here First: Criminal Defense in Georgia

If you or a loved one is under investigation by law enforcement authorities, or have been charged with a crime, it can be difficult to know what to do and who to trust.  First, you need to understand that criminal cases, including many traffic violations, are serious matters.  Treat them as such.  Second, you also need to understand that getting legal counsel in your corner to help you will almost always benefit you whether you wish to resolve the matter quickly through a negotiated plea agreement, or you wish to fight the case and go to trial before a judge or jury.  

As a person accused of a crime, you have rights under our laws.  These include the right to a trial, the right to confront witnesses, the right to present witnesses and other evidence on your own behalf, and the right to remain silent.  Importantly, you need to exercise  your right to be silent until you have sought counsel.  You do not have to talk with the police or other investigators without counsel.  There might be a time when it is appropriate to cooperate with the authorities, but that should only come after a thorough consultation with legal counsel.  So, before you do anything else, consult a lawyer.  If you can't afford a lawyer, make application for appointed counsel and ask the court to appoint a lawyer for you.  

While getting some basic information about criminal procedure over the internet can be informative, please understand that this blog simply cannot provide you with legal advice specific to your situation.  Feel free to look around here and check out other posts in this category and others, but please seek the help of counsel for you or your loved on charged with a crime.  In my view, the earlier you get counsel involved, the better. 

Joel’s criminal defense practice is largely limited to metro Atlanta and to Gwinnett County, including Gwinnett State, Superior, Recorders and Magistrate courts, as well as municipal courts in Lilburn, Lawrenceville, Snellville, Duluth, Suwanee, Loganville, Norcross, and other courts across metro Atlanta including Forsyth County, DeKalb County, Fulton County, and the U.S. District Court for the Northern District of Georgia. 

If you have been accused of a crime, or are being investigated by law enforcement agencies, understand that you have a right not to speak with the police.  Exercise that right and contact The Beck Law Firm, LLC for a consultation.  If you are arrested, keep quiet, and seek to engage counsel immediately.  

 

Broker-Dealer Branch Office Oversight - In the News

Dan Jamieson over at Investment News put together a great article on branch office oversight earlier this week (and I'd say that even if I wasn't heavily quoted in the article). Dan highlights an issues of importance now to broker-dealers, especially ones that operate under the independent model, instead of the traditional branch office model.  Supervision of remote branch offices is under the microscope of regulators, and wise firms should be especially vigilant to ensure that they have an adequate system of supervision in place, whether they operate with traditional branch offices or independent ones.

As I mentioned in the article, most brokers who engage in fraud (or in other violations for that matter), don't willingly disclose it to their firms on outside business activity reports or via other means.  This means that firms can't simply rely on the representations of their brokers.  Those that do might very well be found to have had an inadequate and unreasonable system of supervision should something go wrong, and could face some significant penalties from the regulators.  Compliance and supervisory folks should understand that every examination that FINRA does of a registered rep.'s conduct is going to include a review of supervision to some extent.  

RIAs Look Out! The Investment Adviser Oversight Act of 2012 Hits Congress.

Spencer Bachus (AL), the Chairman of the House Financial Services Committee, introduced legislation into the House on Wednesday, Apri 25, 2012, together with Rep. Carolyn McCarthy (NY) to change the regulatory structure for the retail investment advisory industry.  Under the bill, the short title of which is The Investment Adviser Oversight Act of 2012, registered investment advisors would be required to register with a newly created self-regulatory organization(s) called National Investment Adviser Associations (NIAAs) that would be registered and overseen by the SEC.  This proposal would result in an SRO regulatory system for RIAs very similar to the SRO oversight in the broker-dealer community, where FINRA serves as the predominant SRO for broker-dealers.  As many know, FINRA has been positioning itself to become the selected regulatory for the RIA industry.  At this point, the legislation has just been introduced.  It will be assigned to a committee for review first, and then may possibly work its way to the full House for consideration.  The proposed bill is here, and the Committee on Financial Services announcement can be found here.  

Sometimes It's Best to Exercise Your Right to Remain Silent.

As I was leaving the courthouse today there was a young man talking on his cell phone just outside the courthouse doors.  His conversation, which I presume he wanted the world to hear because of the loud voice he was using, seemed to be focused on an incident where I gather that he and his buddy had been hiding from the police, or his buddy had hid from the police while the dude on the cell phone was arrested, and Mr. Cell Phone seemed to continue discussing the details of that situation as I made my way out to the parking lot.  As I walked by I just couldn't help but think that this guy might just be better off exercising his right to be quiet. 

If you are arrested, or are suspected of committing a crime, or are the subject of a police investigation, sometimes you're just better off staying quiet.  In my days as a police officer, and now as a lawyer, I recognize that a lot of folks just won't take this advice.  They want to talk, they want to explain their story, under a mistaken belief that they can talk their way out of a situation or problem.  The reality is that many of these statements just cause more problems for them, as the prosecutors use these statements against them.

So what should you do?