Weekly Update – 8th November 2018

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Tweet us @Fides_Search to let us know your thoughts.

This week:

1. BBVA breaks ground by completing first ever syndicated loan on blockchain

Spanish bank BBVA was sole bookrunner to a $150 million syndicated loan deal, the first transaction of its kind to be completed on a blockchain.

The Financial Times reported on Tuesday that BBVA used blockchain technology to arrange a $150m syndicated loan for Red Eléctrica, the Spanish grid operator, along with co-lenders MUFG and BNP Paribas. The legal advisers to the deal were Linklaters and Herbert Smith Freehills.

A syndicated loan is needed where a loan is too large or risky to be accepted by single lender, instead involving two or more lenders to spread the risk.

Making use of the Ethereum platform and well-known cross-industry consortium Hyperledger, the technology was used to record each step of syndicated agreement process, and ultimately store the contract signatures for all parties.

Integrating distributed ledger technology allowed the whole negotiation process to be completed on a shared private blockchain network, allowing each party to exchange information in real time and ensure all information was secure. This enabled a process, which traditionally occurs over a couple of weeks, to only take two days.

In addition to the time saving benefits, carrying out a transaction using blockchain technology can heavily reduce the level of back office and operational costs involved, Ricardo Laiseca, BBVA’s head of global finance, tells the FT.

Juan Barona, Banking partner at Linklaters, says: “This is a great example of how transactions can be simplified with a speedier process using existing technology. It’s been a fantastic transaction to be involved with, working with a client that is at the forefront of innovation in financial markets. As the technology becomes more embedded, we’ll see a greater uptick in use which is really exciting.”

The Linklaters team was led by Banking partner Juan Barona and included managing associate Francisco Sáinz-Trápaga and associate Elisa de Mollinedo.

Meanwhile, UK lender NatWest, in collaboration with fintech company Finastra and consortium R3, has developed a similar platform using R3’s blockchain platform Corda to create an online marketplace for syndicated lending. Whilst no transactions have yet been completed, the product is expected to live on the 17th November.

2. Key takeaways from the SEC’s annual enforcement report

The end of last week brought the second ever annual report from the Securities and Exchange Commission’s (SEC) Enforcement Division, which outlines the organisation’s activity over 2018 and details the significant actions and initiatives that took place.

Access the full report here or read on for a list of the key takeaways.

Overall statistics

The SEC instigated a total of 821 enforcement actions over 2018, which led to over $3.9 billion in disgorgement and penalties. The regulator also returned $794 million to affected consumers.


One of the two main priorities for the SEC in 2018, over 225 cyber-related investigations were launched and the US regulator filed its first ever charge concerning the risk of identity theft. Under the charge, a settlement was demanded from an investment adviser due to its poor cyber policing that ultimately compromised the personal information of thousands of its customers.

Protecting retail customers

The second of its two main priorities for the year, the SEC has focused on handling cases alleging misconduct against retail investors.

This led to over half of the standalone enforcement actions brought by the SEC in 2018 concerning wrongdoing against retail investors. This was largely achieved by the Retail Strategy Task Force, formed this year, with the aim to address the types of misconduct that most affect retail investors.

Digital assets and ICOs

A much bigger feature in the annual report compared to 2017, digital assets and initial coin offerings (ICOs) were high on the SEC agenda this year.

The US watchdog brought 20 standalone cases for cyber-related misconduct, over a dozen of which involving digital assets and ICOs. A key objective was to raise awareness around these new products, specifically targeting the potentially unlawful promotion of ICOs by celebrities, and the risks associated with online trading platforms for digital assets.

Individual accountability

Whilst the SEC continued to make charges against individuals, a major development in attempting to improve the effectiveness of enforcement action was the new ‘undertakings’ requirement i.e. making individuals take affirmative steps to become more compliant.

Chief executives of healthcare company Theranos and carmaker Tesla were both handed undertakings following settlements with the SEC.

In conclusion, the SEC’s impact on the financial sector wasn’t much of a contrast in comparison to its activity last year, however, the regulator suffered a hiring freeze for the most part of the year, which would suggest their efforts have been significant, given the staffing challenges.


Some of the most noteworthy enforcement actions undertaken by the SEC in 2018 include:

  • Legg Mason Inc. for violating the FCPA in a scheme to bribe Libyan government officials
  • Merrill Lynch, Pierce, Fenner & Smith for misleading customers about how it handled orders purportedly routed to a dark pool
  • Three individuals who allegedly orchestrated a Ponzi-like scheme that raised more than $345million from over 230 investors across the US
  • The co-founders of a purported financial services start-up with allegedly orchestrating a fraudulent ICO that raised more than $32 million from thousands of investors
  • Titanium Blockchain Infrastructure Services Inc. and its president, a self-described “blockchain evangelist,” for an alleged ICO fraud that raised as much as $21 million from investors in and outside the US
  • 56 individuals who allegedly misappropriated or traded unlawfully on material, non-public information

“The SEC oversees approximately $90 trillion in annual securities trading, the disclosures of approximately 4,300 exchange-listed public companies valued at approximately $32 trillion, and the activities of over 27,000 registered entities and self-regulatory organisations.”


Movers & Shakers of the week 


Ashurst builds project finance practice

UAE-based project finance partner Matthew Wood has left White & Case to join Ashurst’s Africa-specific project finance practice, relocating to the firm’s London office

King & Spalding looks to BoE for investigations partner

Former head of enforcement at Bank of England Robert Dedman has joined the London office of King & Spalding as a partner in the firm’s special matters and government investigations team. His most recent positions was senior director at professional services firm Navigant Consulting

Squire Patton Boggs hires Paris partner duo

Gowling’s head of real estate Alexandra Plain and real estate partner Jeremy Roigt are both set to join Squire Patton Boggs real estate practice in Paris

Ropes expands City litigation practice

Financial services contentious regulatory partner Rosemarie Paul moves to Ropes & Gray, departing her former role as a partner at Akin Gump Strauss Hauer & Feld in London.

Eversheds Sutherland hires lawtech expert from Barclays

Darren Jones has joined Eversheds Sutherland as a partner and head of service excellence for its company commercial practice group in London. Previously at Barclays, Jones advised teams on law tech, legal service delivery, and legal automation.

Paul Hastings’ HK head returns to in-house to take top legal role

Hong Kong office head Steve Winegar has left the partnership of Paul Hastings to become international general counsel at Chinese insurance firm Ping An

Restructuring in the Middle East sees two Dentons partners depart

Dentons partners Dali Al Habboub and Abdelhaleem Amir Mohammed exit the firm’s Muscat office to join Dentons’ associated firm S&A Law Firm, leaving only three Dentons partners in Oman

Mergers & Alliances

Gordon Dadds forms Hong Kong association amid Ince merger

Office Openings & Closings 

BCLP’s Hong Kong outfit departs the newly merged firm to launch spin-off

Partner Promotions

Cravath posts all-female partner promotions round

Inclusion & Diversity

Law Society calls for all firms to report gender pay gaps

Legal Technology

BCLP launches new AI tool in disputes practice


Linklaters, Slaughters and Travers partners among signatories as 1,500 lawyers call for new Brexit vote


read more




    Many thanks for visiting our website!

    Is there something we can help you with?

    If not right now, we can include you on next weeks' newsletter update?