First Circuit Vacates Summary Judgment Award and $93 Million Order in Revenue Sharing Case
On April 1, 2025, the United States Court of Appeals for the First Circuit overturned a $93 million judgment issued against Commonwealth Financial Network (“Commonwealth”) nearly one year ago in a case by the Securities and Exchange Commission (“SEC”) concerning alleged failures to adequately disclose revenue sharing payments.[1] A three-judge panel has remanded the case […]
Daniel O’Connor and Amy Roy are Partners, and Devon Caton is an Associate, at Ropes & Gray LLP. This post is based on a Ropes & Gray memorandum. by Mr. O’Connor, Ms. Roy, Ms. Caton, and Sean Adessky.
On April 1, 2025, the United States Court of Appeals for the First Circuit overturned a $93 million judgment issued against Commonwealth Financial Network (“Commonwealth”) nearly one year ago in a case by the Securities and Exchange Commission (“SEC”) concerning alleged failures to adequately disclose revenue sharing payments.[1] A three-judge panel has remanded the case to the District Court for the District of Massachusetts taking the SEC to task for its lack of evidence that the alleged omissions regarding details on conflicts were material to investors and asking the District Court to “consider and address the numerous shortcomings in the SEC’s causation evidence.”[2]
