Analysis Group Client Reaches Favorable Settlement with the SEC
October 2, 2017
In 2016, the SEC initiated an administrative proceeding against Merrill Lynch's former head of regulatory reporting, William Tirrell. The proceeding was in connection with the bank's alleged violations of Customer Protection Rule 15c3-3. These violations related to a series of option trades (“leveraged conversion” trades) that had the effect of reducing the amount the bank was required to keep in its customer reserve accounts.
In support of Mr. Tirrell's defense, Fried, Frank, Harris, Shriver & Jacobson retained Analysis Group and its affiliate Dr. James Overdahl. Managing Principal Gaurav Jetley and Vice President Duncan Fung supported Dr. Overdahl in analyzing the economic substance of the at-issue leveraged conversion trades and the materiality of subsequent modifications to the trades. Dr. Overdahl opined that modifications to the trade did not result in any material changes to underlying economics of the trade.
The case settled before trial. As part of the settlement, the SEC imposed no penalty or fine against Mr. Tirrell.