SEC Compliance Expert with NASD Rule 11140 Experience

An SEC compliance expert with experience interpreting NASD Rule 11140 was needed for litigation regarding securities fraud and violation of SEC Rules 10(b) and Section 20(a) of the Exchange Act. Rule 11140 governs the timing of the ex-dividend date. The defendant purchased securities through the plaintiff, a securities broker-dealer. Taking advantage of a glitch in the Depository Trust Company’s (DTC) automated dividend distribution service, the defendant purchased stock on or just after the ex-dividend date. By trading during the window between the ex-dividend date and the record date, the defendant bought the stock for its reduced ex-dividend price, then received automatic distribution of dividends, to which it was not entitled.

IMS ExpertServices was asked to locate an expert in stock dividend distribution and entitlement rules, specifically NASD Rule 11140. The expert assessed who was entitled to the dividends, and whether the defendant’s behavior constituted fraud.

Experts Presented:

SEC Compliance Expert

This stock exchange officer served for 10 years as Executive Vice President of NASDAQ, and continues to consult for them. As Executive Vice President, he oversaw setting of ex-dividend dates and assuring compliance of record date and pay date reporting. He was responsible for ensuring resolution when disputes arose over payout of dividends. This expert has prior experience offering testimony in Federal Court. IMS Reference #4994333

Securities Industry Expert

This certified financial planner, or CFP, with an MBA in finance is a securities industry expert who has offered FINRA and SEC compliance consulting to established and start-up brokers for more than ten years. An experienced expert witness, she has more than twenty years in the securities industry, including direct regulatory experience. This expert previously served as a compliance officer for Merrill Lynch and Senior Compliance Examiner for the Financial Industry Regulatory Authority, or FINRA. IMS Reference #1214629

Securities Expert

With more than three decades in the securities industry, this SEC compliance expert served as Floor Governor and Floor Trading Committee member on three exchanges. He’s acted as compliance and operations liaison for OTC and block trading and been an arbitrator with the AAA, NASD, and NYSE. He owns and operates a broker dealership and has experience as a senior examiner and instructor with the National Association of Securities Dealers, or NASD. IMS Reference #4942991