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Steven Lofchie is the Chief Legal Architect and a co-founder of Caffrey.AI, an AI platform built for law firms, banks, and the financial regulatory industry. He is also a partner at Norton Rose Fulbright, where he advises financial institutions on securities laws, the Commodity Exchange Act, and broker-dealer regulation. Ranked by Chambers USA every year since 2007, he is the author of “Lofchie’s Guide to Broker-Dealer Regulation,” long considered the leading treatise on the subject.

Recent Articles & Comments

Finance Professor Calls CFTC Allegations That Nav Sarao Caused Flash Crash "Outrageous"
Based on the material presented to date, it seems unlikely that the CFTC will be able to demonstrate any link, let alone causation, between Nav Sarao's trading (even if illegal) and the Flash Crash. At best, the CFTC's assertions seem an argument of the "butterfly effect"; that Mr. Sarao's flapped his wings (or flipped his orders) causing ripples leading to a flood of ensuing events. In some philosophical sense, it may be true that every event in the world contributes to every other, but it is…
CFTC Publishes Appendix to Motion against Nav Sarao
The CFTC's allegations against Mr. Sarao raise two separate but related questions: (i) did Mr. Sarao trade in a manner that was illegal and (ii) did his trading contribute to the Flash Crash in any meaningful way? Assuming that Mr. Sarao's trading was improper, nothing in Mr. Hendershott's deposition seems remotely persuasive regarding the second question.   Mr. Hendershott first states that the Layering Algorithm "contributed" to the order book balances and market conditions. In a…
ALJ Issues Decision in Case Involving Short Sales, the Role of Compliance and Supervisory Liability

Compliance and senior supervisors should take a close look at this case. The ALJ delved deeply into the facts and the result is an opinion that is quite thoughtful and rich in detail. Though the decision can't be summarized in a few paragraphs, here are a few observations about it:

(1) The Number of Regulatory Inquiries. The ALJ noted that on average the firm received 1,100 to 1,500 regulatory inquiries in a year. That seems a tremendous number. If larger firms are…

Oxfam America Inc. Demands SEC Action in Energy Payment Rule Case

Congress habitually requires the SEC and other agencies to adopt rules that have timetables that are impossible to meet. For example, most Dodd-Frank deadlines fit in this category. It is hard to imagine on what basis a court could require the SEC to proceed with the adoption of this particular rule when so many other rules are well past their legislative "deadlines."