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from Breakingviews:

Twitter free-speech chirps carry overtone of risk

By Reynolds Holding

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Twitter’s chirping about corporate free speech carries an overtone of risk. After its UK super-injunction tiff, the microblogging service is fighting for the right to disclose secret U.S. demands for data. The two cases show firms have power to resist being muzzled – or forced to speak. That helps check judicial and government overreach, but it could also undermine useful regulation.

The company earned its free-speech stripes three years ago making British privacy guardians look ridiculous. A court order banning reporting on a famous footballer’s alleged affair – including the existence of the order, dubbed a super-injunction – was rendered useless when some 75,000 tweets broke the edict. Attempts to hold Twitter responsible proved futile.

The popularizer of hashtags burnished its First Amendment credentials on Tuesday by suing Uncle Sam for insisting that Twitter and others couldn’t say publicly whether they had been forced to turn over customer records. The government claims such gag orders protect national security but Twitter is arguing, with justification, that the U.S. Constitution sets a higher bar for measures that restrict free speech. One judge has already struck down similar orders.

from Alison Frankel:

Hedge fund’s novel claim: SEC in-house judges are unconstitutional

(Reuters) - On Wednesday, the $200 million activist hedge fund Stilwell Value and its founder, Joseph Stilwell, filed a complaint against the Securities and Exchange Commission in federal court in Manhattan. Stilwell's lawyers at Skadden, Arps, Slate, Meagher & Flom and Post & Schell are asking for a declaratory judgment to block the SEC from bringing an administrative proceeding against Stilwell, who has been under investigation since 2012 for interfund lending. According to Stilwell's complaint, if the SEC follows through with its threats to sue him in an administrative proceeding - rather than prosecuting its case against him in federal district court - it will be breaching the U.S. Constitution.

I know what you're thinking: This is another case claiming that SEC administrative proceedings violate defendants' due process rights. We've seen those arguments before, from former Goldman Sachs director Rajat Gupta, who forced the SEC to refile its case in federal court after U.S. District Judge Jed Rakoff refused to toss Gupta's constitutional claims in 2011, and more recently by "Big Short" investment advisor Wing Chau of Harding Advisory, who tried unsuccessfully to stop the SEC from litigating its claims against him in an administrative proceeding. Both Gupta and Chau argued that the SEC has unfair, and unconstitutional, advantages when it brings administrative proceedings since (among other things) are no juries, no federal rules governing discovery and no immediate rights to appeal outside of the agency.

from MuniLand:

A revolution in muniland

Goldman Sachs

In a speech last week at the Economic Club of New York, SEC Chairman Mary Jo White set out three new initiatives that will reorder the way fixed income markets serve retail investors.

Congress gave the SEC the authority to regulate fixed income markets in 1975. The initiatives that White announced make up the first broad extension of the SEC’s authority over the murky, cost ridden, over-the-counter bond market. The combined firepower of the SEC, FINRA and the MSRB will likely topple any resistance that dealers will use to protect one of the last remaining profit centers.

from Financial Regulatory Forum:

SEC faces challenges before fast-trading reforms can go on the books

By Emmanuel Olaoye, Compliance Complete

The Securities and Exchange Commission has rolled out its intentions to regulate high-frequency trading, making stricter regulation in some form a strong possibility, but the agency faces more work and some challenging obstacles before it can put new rules in the books.

SEC Chair Mary Jo White in a speech last week outlined her goals for regulating high-frequency trading (HFT), at a time when political interest over the fairness and risks of the practice has surged in the wake of a best-selling book by financial writer Michael Lewis.

from Breakingviews:

James Hoffa: Let sun shine on corporate donations

By James Hoffa
The author is a Reuters Breakingviews guest columnist. The opinions expressed are his own.

Companies increasingly are playing an outsized role in U.S. elections. In many cases, they donate money to advocate controversial policies that could antagonize their customers and undermine their businesses. Because so many of these contributions are not disclosed, however, shareholders are left in the dark and unable to evaluate potential conflicts or risks.

from Breakingviews:

Rob Cox: Coke takes fizz out of shareholder spring

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

America’s shareholder spring hit a cold patch. Just when it seemed investors were finally breaking through entrenched boards’ barricades, the owners of Coca-Cola turned to jelly, led shockingly by Warren Buffett. The failure to challenge a transfer of vast shareholder treasure to the top 5 percent of Coke’s soda jerks shows the agency problem is still alive and well in American capitalism.

from Financial Regulatory Forum:

Expect corruption crackdown to widen, intensify

By Stuart Gittleman, Compliance Complete

NEW YORK, Apr. 15, 2014 (Thomson Reuters Accelus) - Companies and financial firms that are potentially subject to the Foreign Corrupt Practices Act and other anti-corruption regimes should expect more of the enforcement crackdown they have seen in recent years, except in greater quantity and intensity, two former U.S. government officials said last week.

The ex-officials, Cheryl Scarboro, a law partner at Simpson Thacher & Bartlett, and Greg Andres, a partner at the law firm Davis Polk & Wardwell, respectively headed the Securities and Exchange Commission Enforcement Division FCPA unit and the Department of Justice Criminal Division fraud section. They spoke at an FCPA and anti-corruption seminar at the New York City Bar Association.

from Financial Regulatory Forum:

The JOBS Act at age two – prodigy or enfant terrible?

By Stuart Gittleman, Compliance Complete

NEW YORK, Apr. 3, 2014 (Thomson Reuters Accelus) - The financial services industry is still getting used to the two-year old JOBS Act, as funds gingerly begin to explore new general-solicitation freedoms and "crowdfunding" venues sort through the rules, speakers said at a Fordham Law School forum in New York.

As mandated by the JOBS – or Jumpstart Our Business Startups – Act enacted in April 2012, the Securities and Exchange Commission has adopted rules for general solicitations that became effective in September 2013, and is reviewing comments to a December 2013 set of proposed crowd-funding rules.

from Financial Regulatory Forum:

Book by high-profile author Lewis may spur high-frequency-trading reform push, success unclear

By Emmanuel Olaoye, Compliance Complete

WASHINGTON/NEW YORK, Apr. 2, 2014 (Thomson Reuters Accelus) - During a clip on Sunday night's "60 Minutes" program, host Steve Kroft asked bestselling author Michael Lewis why he was so opposed to high frequency trading.

"If it wasn't so complicated, it would be illegal," said Lewis, who is the author of a new book called "Flash Boys: A Wall Street Revolt." 

from Breakingviews:

Rob Cox: GE should put itself up for sale

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

General Electric should sell itself. If that sounds like an April Fools’ Day joke, think again. It’s a real proposal on the ballot at the industrial group’s annual meeting. Setting aside the absence of any obvious buyer for the $260 billion company, the proposition illustrates the kind of shareholder democracy gone wild that many boards, and even some regulators, would like to squelch. They have half a point.

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