Aegis J. Frumento Partner

Aegis J. Frumento joined Stern Tannenbaum & Bell LLP in 2012. Mr. Frumento had been a Managing Director of Morgan Stanley Smith Barney, a partner and the co-head of the Financial Markets and Securities Litigation Groups of Duane Morris, LLP, and the managing partner of Singer Frumento LLP. Mr. Frumento began his career at Schulte, Roth & Zabel.

Mr. Frumento has broad experience representing parties in corporate, commercial and general business disputes. He now concentrates on representing firms and individuals in the regulated banking, financial, and securities industries (including banks, broker-dealers, investment advisers and related businesses); private companies raising capital and preparing for public offerings (especially start-ups involved in finance, financial technology and blockchain applications); and senior executives of public companies in employment, stock ownership matters, and employee benefit disputes (particularly those involving unpaid compensation, anti-competition restrictions, and denial of private disability insurance benefits). He has over 25-years’ experience litigating and arbitrating complex corporate, commercial and securities disputes, and has practiced extensively before the SEC, FINRA and other regulatory bodies. At Morgan Stanley, he headed the Executive Financial Services Department, which was responsible for legal compliance of sales of stock by all clients of the firm who were corporate insiders.

Mr. Frumento has tried jury and non-jury cases in all New York state and federal trial courts. He is a member of the United States Courts of Appeal for the 2d and 3d Circuits and the United States Supreme Court.

Mr. Frumento is a graduate of Harvard College and New York University Law School, and has an AV® Preeminent™ Peer Review Rating, the highest rating awarded, by Martindale Hubbell. He has published over a dozen law review and other articles and has often appeared on professional panels speaking on securities law issues. He chaired the American Conference Institute’s Annual Forum on Broker-Dealer Arbitration in 2004, 2005 and 2006.

Securities Enforcement Matters:
  • Represented private equity fund in the SEC’s first enforcement case involving issues of expense allocation, resulting in a settlement without findings of active fraud and without imposition of suspensions or bars (2014)
  • Represented broker-dealer in appeal to the NASD National Adjudicatory Council, resulting in reversal without remand of adverse NASD district staff decision
  • Represented broker-dealer in NASD investigation of mutual fund market timing, resulting in no action taken
  • Represented individual broker in New York Stock Exchange action arising out of the collapse of WorldCom, Inc., resulting in a favorable settlement
  • Represented syndicate captain of major brokerage firm in New York Stock Exchange investigation of manipulative trading in an IPO, resulting in a written determination to take no action.
  • Represented witnesses in SEC investigations of Hollinger International and Martha Stewart.
  • Represented individual registered representatives in NASD investigations of undisclosed outside business activities, resulting in no actions beyond letters of caution.
  • Represented individual registered representative in NASD investigation of supervision of options trading, resulting in no action taken.
  • Represented several broker-dealers in negotiating favorable settlements to resolve NASD investigations of net capital violations, underwriting escrow account violations, continuing education violations, and record-keeping violations.
  • Represented individual officer of a public company in an SEC civil enforcement action, resulting in a favorable settlement of disgorgement of compensation but no other penalty.
  • Represented and advised public companies in responding to SEC subpoenas both in particular investigations and in "sweep" examinations.
  • Represented and advised broker-dealers in connection in NASD and NYSE routine audits and examinations.
  • Represented individual broker in SEC administrative proceeding and trial.
Broker-Dealer Arbitrations:
  • Represented broker-dealer firm and analyst defending against a claim of financial analyst fraud, resulting in a dismissal of the arbitration.
  • Represented hedge fund customer bringing claim against a broker-dealer firm for improper taking of securities, resulting in substantial award for client.
  • Represented registered representative accused by customer to improper account activity, resulting in dismissal of case against client even though an award was made against his firm.
  • Represented broker-dealer and independent registered representatives in numerous customer complaints, none resulting in an award against the client.
  • Represented several broker-dealers in actions seeing temporary retraining orders, preliminary injunctions and damages against registered representatives leaving the firm and seeking to compete using confidential information and customer lists, and in violation of non-solicitation and non-competition agreements, all resolved favorably to client.
Other Securities Industry Matters:
  • Represented industry professional sued in New York State court to recover employee forgivable loan, resulting in decisions in both the trial court and the Appellate Division holding that broker-dealers cannot evade mandatory FINRA arbitration by having non-FINRA affiliates make such loans.
  • Represented individuals seeking to leave broker-dealers to start their own businesses, including pre-resignation counseling and defense of injunction actions brought by former employers, all resolved favorably.
  • Represented brokerage firms in opposing attempts by departing brokers to unfairly compete against the firm, including obtaining preliminary injunctions
  • Represented private equity and hedge funds in connection with formation, regulation, governance and compensation issues, including strategizing optimal entity structures, negotiating and preparing appropriate agreements and documents, preparing private placement offering documents and assisting with required filings.
  • Represented highly-placed brokers, traders and investment bankers in compensation disputes with their former firms, resulting in successful arbitration awards and favorable settlements.
Non-Securities Industry Matters:
  • Prosecuted attorney malpractice action against major law firm, resulting in a favorable multi-million-dollar settlement for the client.
  • Represented insureds who were denied coverage under disability insurance policies, resulting in reversal of denials and awards of benefits.
  • Represented major commercial landlord in various disputes with tenants in New York City office buildings.
  • Negotiated commercial brokerage agreements for a major New York Landlord.
  • Represented shareholders in closely-held businesses in disputes with co-owners, resulting in favorable judgments or settlements.
  • Represented large consulting engineering firm in connection with errors and omissions claim by developer of a high-rise office building.

  • New York
  • United States District Courts for the Southern, Eastern and Northern Districts of New York
  • United States Tax Court
  • United States Courts of Appeal for the Second and Third Circuits
  • United States Supreme Court
  • New York University School of Law, J.D., 1979
  • Harvard College, AB, cum laude, 1976
Legal:
  • Duane Morris LLP, New York, New York
    • Partner, 2002-2006
    • Co-Head, Financial Markets Practice Group
  • Singer Frumento LLP, New York, New York
    • Managing Partner, 1997-2002
  • Independent Law Practice, New York, New York, 1987-1996
  • Schulte Roth & Zabel, New York, New York
    • Associate, Corporate and Litigation Departments, 1979-1986


Business:
  • Morgan Stanley Smith Barney, New York, New York
    • Managing Director, 2008-2011
    • Senior Vice President, 2006-2008
    • Head, Executive Financial Services Department

  • Editorial Advisory Board, Journal of Investment Compliance, 2013
  • Board of Editors, The Corporate Counselor, 2012 -
  • Advisory Board, E-Trading Legal Alert, 1999-2001
  • Director, Gillette Global Networks, Inc., 1994-1999

  • American Bar Association
    • Section on Litigation
    • Section on Business Law
  • New York State Bar Association
    • Section on Federal and Commercial Litigation
    • Member, Committee on Securities Litigation and Arbitration
  • The New York City Bar Association
    • Member, Committee on Professional Responsibility
    • Past Member, Committee on Administrative Law
    • Past Member, Committee on Litigation
  • Former Arbitrator, NASD (now FINRA)
  • Securities Industry and Financial Markets Association
    • Legal and Compliance Division
    • “SEC Whistleblower Retaliation—and the Securities Laws—after Digital Realty,” Journal of Investment Compliance (2018)(upcoming).
    • “Arbitrating the Barely Legal: Thoughts on the Private Application of Rule 2010,” Securities Arbitration Commentator (July 2018).
    • “Rethinking Non-Lawyer Advocacy in FINRA Customer Arbitrations,” Securities Arbitration Commentator (March 2017).
    • “The First Five Years of the SEC Whistleblower Program,” The Corporate Counselor (May 2016, Part I, and June 2016, Part II).
    • “No More Bullsh*t: Securities Opinions After Omnicare,” Journal of Investment Compliance, Vol. 16, No. 4 (2015) at 6-13, available at http://sterntannenbaum.com/wp-content/uploads/2016/03/Article-No-More-Bullsh_t-Securities-Opinions-After-Omnicare.pdf (chosen the Journal’s 2015 Outstanding Article of the Year).
    • “Another Look at Rule 10b5-1 Trading Plans,” The Corporate Counselor (Jan. 2014).
    • “Professionalism and Investment Advisers,” Journal of Investment Compliance, Vol. 14, No. 1 (2013), available at http://www.emeraldinsight.com/doi/pdfplus/10.1108/15285811311321242 (chosen the Journal’s 2013 Outstanding Article of the Year).
    • “The JOBS Act and the Return of the Microcaps," Parts I and II, The Corporate Counselor, Ldw Journal Newsletters, October and November 2012.
    • “Using Rule 10b5-1 Plans to Protect the Corporation,” 8 Retirement Capital 13-15, Fall 2010.
    • “The Rich are Different: Why Small Companies Should Not Be Regulated the Same As Large Companies,” The Corporate Compliance & Regulatory Newsletter, May 2006.
    • "Can’t Get No Satisfaction! How Explained Decisions Will Undermine the Arbitration Process," Securities Arbitration Commentator, April 2005.
    • Co-Author, "Trade Order Disclosure," Compliance Reporter, December 6, 2004.
    • "Misrepresentations of Secondary Actors in the Sale of Securities: Does In re Enron Square with Central Bank?" 59 Business Lawyer 975 (May 2004).
    • "Insurance Consequences of SEC Actions," New York Law Journal Securities Litigation and Regulation Special pullout section, March 8, 2004.
    • "The Selling Away Case: Rethinking the Firm's Defenses," (co-author) Journal of Investment Compliance, Fall 2003.
    • "Using Sarbanes-Oxley Documents as Evidence," New York Law Journal, October 14, 2003.
    • "How to Appeal SRO Determinations," Associations of the Bar of the City of New York, Self-Regulatory Organization Practice, February 10, 2003.
    • "New Ways to Make 'Em Talk: Real Time Enforcement, Sarbanes-Oxley and the Corporate Order," Journal of Investment Compliance (Winter 2002-2003).
    • "Representing Officers, Directors and Significant Shareholders of Public Companies," Association of the Bar of the City of New York, Introduction to the Deal: What's Involved Once Your Company Goes Public January 25, 2002, January 17, 2003, and May 7, 2004.
    • "Pre-Time Enforcement: The Rising Use of Coercive Cooperation," American Conference Institute, Securities Enforcement and Litigation (2002).
    • "Regulation and Use of Electronic Signatures," American Conference Institute, Fifth National Conference on Securities Trading on the Internet, (2001).
    • "Implementing E-Signatures: Legal and Practical Considerations," American Conference Institute, Fourth National Conference on Securities Trading on the Internet, (2000).
    • "How to Think About Electronic and Digital Signatures: A Tutorial From A Litigator's Perspective," American Conference Institute, Conference on Securities Regulation, (2000), http://www.rrbdlaw.com/2000/Q4/Digsig.pdf
    • "Arbitrating Discrimination Matters," Securities Industry Commentator, (1999) http://www.rrbdlaw.com/2000/Q1/empdisc.html
    • "Burlington and Faragher: New U.S. Supreme Court Rulings on Sexual Harassment and Discrimination," Securities Industry Commentator, (1999) http://www.rrbdlaw.com/1999/sexhardisc.html
    • "Arbitration and the Securities Law," 15 The Review of Securities Regulation 850, (1982)
    • Contributing Author, The Securities Industry Commentator, (1999-2002)
    • Principal Author, The Venture Counselor, (2001-2002).

    • Panelist, “Telling Your Story Simply,” New York State Bar Association, Securities Arbitration and Mediation 2017: The Courage to Simplify, New York City (April 6, 2017).
    • Panelist, “Stock Plan Design Workshop,” American Conference Institute, Forum on Executive Compensation, New York City (Dec. 1, 2016).
    • Speaker, “The SEC’s Whistleblower Program: Significant Developments,” The Knowledge Group Webcast (July 11, 2016), available at www.theknowledgegroup.org.
    • Speaker, “The SEC 2016 Examination Priorities,” The Knowledge Group Webcast (June 22, 2016), available at www.theknowledgegroup.org.
    • Interview, “Is Blowing the Whistle Wasting Time,” WealthManagement.com’s Case in Point with Bill Singer (Oct. 23, 2015), available at http://wealthmanagement.com/legal/blowing-whistle-wasting.
    • Interview, “Thoughts on Recent SEC Enforcement Decisions,” ACA Insight (June 2015), available at http://sterntannenbaum.com/index.php/in-the-news/.
    • Panelist, “Recruiting Securities Industry Professionals,” SIFMA Compliance & Legal Society - 2014 Annual Seminar, Grande Lakes, Florida (March 31, 2014).
    • Speaker, “The Latest on 10b5-1 Trading Plans: General Pros, Cons and Question Marks,” in private continuing legal education course given at over 12 major law firms in New York City (certified for 1hour of CLE credit in NY), 2010-2011.
    • Regular speaker and instructor at branch, regional, divisional, and specialist internal training courses at Morgan Stanley Smith Barney, 2006 to present.
    • Panelist, “In-House Roundtable: Best Practices for Fiduciary Compliance,” American Conference Institute’s National Forum on the Regulation and Enforcement of Broker-Dealers and Investment Advisors, March 31, 2011.
    • Speaker, “Corporate Governance and Insider Trading: Practices, Predicaments and Problems,” ShareComp 2011, (online virtual conference, www.sharecomp2011.com), February 2011.
    • Panelist, “In-House Think Tank on Minimizing Legal Risks in the Design, Implementation and Administration of Executive Compensation Packages,” American Conference Institute, Forum on Executive Compensation, Chicago, Illinois, July 22, 2010.
    • Speaker, “The Latest on 10b5-1 Trading Plans: General Pros, Cons and Question Marks,” ShareComp 2010, (online virtual conference, www.sharecomp2010.com), February 2010.
    • Speaker, “Gifts of Restricted Stock—Considerations for the Charity and the Donor,” Stanford University Conference on Charitable Giving 2009, Palo Alto, California, May 2009.
    • Co-Chair and Speaker, American Conference Institute, 3rd Annual Broker/Dealer Forum on Resolving Customer Claims—Best Defenses and Advocacy Tactics in Arbitrations and Mediation, New York, May 23-26, 2006
    • Panelist, “In the Hot Zone: D&O Liability and Insurance—Updates and Trends,” Risk Insurance Managers Society Annual Meeting, Honolulu, Hawaii, April 26, 2006
    • Co-Chair and Speaker, American Conference Institute, 2nd Annual Defense Counsel's Forum on Prevailing Against Customer Claims, New York, May 24-25, 2005
    • Panelist, “Retrieval and Recovery: Ensuring Your System Complies with SEC Section 17a-4 and Optimizes Litigation/Investigation Resources,” and “Erasing and Destroying Electronic Documents,” American Conference Institute, Broker/Dealer Information Management, New York, March 17, 2005
    • Speaker, "The Impact of SEC Enforcement Actions on D&O Policies," American Conference Institute's 10th National Conference on D&O Liability Insurance, New York, December 2004
    • Panelist, "Maintaining Ethical Standards in Securities Arbitrations," American Conference Institute, Defense Counsel's Forum on Securities Arbitration, New York, June 22-24, 2004
    • Speaker, "What's the Case Worth? A Systematic and Quantitative Approach to Case Assessments," American Conference Institute, Defense Counsel's Forum on Securities Arbitration, New York, June 22-24, 2004
    • Co-Chair and Speaker, American Conference Institute, Defense Counsel's Forum on Securities Arbitration, New York, June 22-24, 2004
    • Speaker, "The Distorting Impact of D&O Liability Insurance on SEC Enforcement Actions," American Conference Institute, 9th Conference on D&O Liability Insurance, December 8-9, 2003
    • Speaker, "Record-keeping Obligations Under the Sarbanes-Oxley Act of 2002," Annual Conference of the American Records Management Association, Boston, Massachusetts, October 23, 2003
    • Speaker, "From Central Bank to In re Enron: The Demise and Revival of Secondary Actor Liability," American Conference Institute, Trying and Defending Securities Class Actions, June 24-25, 2003
    • Speaker, "How to Appeal SRO Determinations," Association of the Bar of the City of New York, Self-Regulatory Organization Practice, February 10, 2003
    • Speaker, "Self-Regulatory Organization Practice: Defusing the Flashpoints," The Association of the Bar of the City of New York, New York, New York, February 10, 2003
    • Speaker, "New Developments in SEC Enforcement: Targets, Methods and Remedies," American Conference Institute, Securities Enforcement and Litigation, September 19-20, 2002
    • Speaker, "Representing Officers, Directors and Significant Shareholders of Public Companies," Association of the Bar of the City of New York, Introduction to the Deal: What's Involved Once Your Company Goes Public, New York, January 25, 2002, January 17, 2003
    • Panelist, Association of the Bar of the City of New York, Self Regulatory Organization Practice, December 12, 2001
    • Speaker, "Electronic Signatures In On-Line Transactions," Securities Industry Association, Internet Update Conference and Exhibit, New York, February 12, 2001
    • Speaker, "Implementing E-Signatures, Legal and Practical Considerations," American Conference Institute, Fourth National Conference on Securities Trading on the Internet, New York, November 13, 2000
    • Speaker, "Proving Electronic Signature," Securities Industry Association, Conference on Internet and On-Line Trading, New York, September 26, 2000
    • Speaker, "Electronic and Digital Signatures: What They Are, What They Mean," American Conference Institute, Conference on Internet Securities Regulation, June 27, 2000