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Covington is a leading global provider of legal services to market participants in the financial services industry and has been for decades. The rapid growth of the “fintech” industry—comprised of companies that make use of new technologies to provide financial services traditionally offered by banks, companies that partner with banks to provide financial services using innovative technologies, and other companies that provide financial technology services—has created significant opportunities for all segments of the financial services industry.
Covington’s attorneys in Washington, New York, London, and San Francisco are uniquely well situated to provide sophisticated legal counsel in the areas of financial institutions, consumer financial services, technology and IP transactions, venture capital and emerging companies, capital markets and securities, mergers and acquisitions, insurance coverage, privacy and cybersecurity, and derivatives compliance and enforcement to companies in the fintech sector.
We advise on a range of different fintech matters, including:
- Financial services compliance and licensing requirements applicable to new financial technologies
- Acquisitions of financial technology providers
- Commercial agreements between financial institutions and technology companies
- IP licensing agreements involving financial technology companies
- Venture capital and “angel” investing matter
- Insurance coverage for emerging payment technologies
- Financial services applications of new technologies such as “blockchain”
- Major technology and social networking companies’ provision of services to the financial services industry
- Regulation of consumer reporting agencies, data brokers, and “big data” service providers
American Express’s divestiture of its global travel business
Representation of American Express in the divestiture of its global travel business to form a joint venture with Certares LP, which was the largest foreign investment ever in a travel management company and included Middle Eastern government-owned investors.
BBVA in Acquisition of Simple
Representation of Banco Bilbao Vizcaya Argentaria, an international financial group based in Spain, in its acquisition of financial technology company Simple. The $117 million acquisition is part of BBVA's strategy to lead the technology-driven change that is transforming the financial services industry. According to Francisco González, Chairman and CEO of BBVA, Simple will reinforce BBVA’s “global digital transformation while BBVA will provide the means to help Simple maximize its outstanding growth potential.”
WSFS Bank in Strategic Investment and partnership with ZenBanx
WSFS Bank in its strategic investment and partnership with ZenBanx Holdings, which offers a mobile, multi-currency account that will allow consumers to hold balances denominated in up to five currencies in a single account.
Prosper in First-of-its-Kind Transaction
Representation of Prosper Marketplace in a variety of securities advisory and transactional matters, including in a first-of-its-kind registration of $500 million of borrower dependent notes and restructuring into a bankruptcy remote vehicle, several rounds of venture financings, as well as ongoing disclosure, SEC reporting and SEC regulatory matters.
Prosper in Six Rounds of Funding
Representation of Prosper Marketplace in its last six rounds of financing, including its most recent $165M Series D financing.
JD.Com in Investment in and Joint Venture with ZestFinance, Inc.
Representation of JD.com in connection with its investment in and joint venture with ZestFinance, Inc.
Innovative New Product for Global Communications Firm
Advising a global network that enables institutions to send and receive information about financial transactions on an innovative new communications technology platform.
Strategic Alliance and Outsourcing
Representation of a company in the fintech sector in a complex strategic alliance and outsourcing transaction to create an innovative post-financial trade processing and technology service for large banks in Europe and Asia.
Public Capital Raising by FinTech Issuer
Representation of Cenkos Securities, plc as nominated adviser, broker and bookrunner in relation to an IPO on AIM and two follow-on offerings by FAIRFX GROUP plc, an international payment services provider.
Prosper in Acquisition of American Healthcare Lending
Representation of Prosper Marketplace, Inc. in its acquisition of a healthcare lending platform, American Healthcare Lending, LLC, and merger with Prosper’s wholly owned subsidiary, Prosper Healthcare Lending, LLC.
New EU Legislation for the FinTech Sector
Advising a number of firms on the provisions of the new Payment Services Directive 2 and how to implement the changes.
Prosper in Acquisition of BillGuard
Representation of Prosper in its acquisition of BillGuard, a personal finance analytics company.
Legg Mason Investment in Precidian Investments LLC
Representation of Legg Mason, Inc. in its investment in Precidian Investments LLC, a leader in the creation of innovative financial technology products, specializing in exchange-traded fund and mutual fund development, and associated trading and pricing technologies.
Online Lenders Alliance in CFPB Rulemaking
Representation of leading industry trade association of online lenders in responding to CFPB small dollar rulemaking.
If OCC Charter Case Is Dismissed, State Regulators Will Likely Sue Again, Say Fintech Attorneys
August 3, 2017, Corporate Counsel Magazine
Michael Nonaka is quoted in a Corporate Counsel Magazine article regarding the Office of the Comptroller's argument that it cannot be sued over its plans for a special purpose national bank charter. According to Nonaka, "it's a fair assumption" the Conference of State Bank Supervisors would continue to pursue litigation against the OCC if the case is thrown out, ...
SEC Warns on Initial Coin Offerings--Update
July 25, 2017, The Wall Street Journal
David Martin is quoted by The Wall Street Journal in an article regarding the SEC's warning on initial coin offerings. The SEC's report will likely "chill the waters a bit for these offerings," says Martin.
American Regulators Playing FinTech Catch-Up
June 15, 2017, Law360
Michael Nonaka is quoted in a Law360 article examining how U.S. regulators are fostering fintech innovation. According to Nonaka, the CFTC and FINRA initiatives are important steps to get the agencies up to speed on fintech issues. “It’s certainly a step forward, it’s a step in the right direction for the regulators to be able to do new initiatives that will ...
May 31, 2017, The National Law Journal
Michael Nonaka is quoted by The National Law Journal in an article regarding the likelihood that the U.S. will introduce a regulatory sandbox for fintech companies to test new products and business models without regulatory consequences. According to Nonaka, there is "great value" in a sandbox for entrepreneurs, but "in order for a sandbox to work, you have to ...
Proposed Restrictions on Mexican Remittances Could Hinder Fintechs, Probably Not Banks
May 11, 2017, Forbes
Michael Nonaka is quoted in a Forbes article regarding the prospect of President Trump's taxing remittances for a Mexico border wall, and the possibility of an increase in the use of digital currencies as a result. In discussing banks and payment companies' experience in this field, Nonaka indicates that these institutions have taken the proposed rules in ...
Fintech Startup, Covington To Launch Blockchain Council
January 6, 2017, Law360
Sebastian Vos is quoted in a Law360 article regarding the launch of a Global Blockchain Business Council at this year’s World Economic Forum by Covington and The Bitfury Group. “Blockchain has the potential to be the next great technological innovation, revolutionizing areas from cross-border payments, trade finance and land registries to government records,” ...
December 11, 2016, Harvard Law School Forum on Corporate Governance and Financial Regulation
December 5, 2016, Covington Alert
On December 2, 2016, Comptroller of the Currency Thomas J. Curry announced that the Office of the Comptroller of the Currency (“OCC”) would move forward with issuing special purpose national bank charters to financial technology (“fintech”) companies. The OCC released a whitepaper1 outlining its authority to issue charters to fintech companies, its approach to supervising fintech companies, and its process for evaluating charter applications. The OCC is requesting public comment on the whitepaper by January 15, 2017.