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from Rolfe Winkler:

Morning Links 1-27

Note: Apologies for no links yesterday. Busy day writing columns!

SEC to vote on new money fund rules (Johnson, WSJ) Unfortunately, the SEC won't do away with $1 NAVs, price fluctuations will be published on a 60 day lag. So investors will continue to treat money funds as cash equivalents, even though they aren't, and the systemic risk they pose won't really go away.

Fed weighs interest on reserves as new benchmark (Lanman, Bloomberg) This will be a key interest rate to watch whether or not the Fed makes it the benchmark. The expansion of the Fed's balance sheet over the past year+ has stuffed banks full of excess reserves, reserves that banks will lend out if the economy -- and loan demand -- picks up. The Fed needs to keep those excess reserves sequestered in order to prevent inflation. To do so, it may have to pay higher rates. For a fuller explanation see this previous column.

Failed Senate vote on budget commission shows difficulty in cutting deficits (Faler, Bloomberg) So much for a fiscal commission based on the base-closing commission...

After three months, only 35 subscriptions to Newsday's website (Koblin, NY Observer) Print subscribers get free online access. But this is still not a good showing for selling online only subscriptions. The NYT needn't worry that it's pick up will be this small when they put up their pay wall. I, for one, will pay for their content, as I pay for WSJ. I 'd subscribe to FT too if their website wasn't so slow...

from Rolfe Winkler:

Afternoon links 1-13

Must Read -- Kyle Bass: Testimony before the FCIC ( Bass is a hedgefunder that made big profits betting against subprime. His testimony has many fascinating facts and figures. [The pie charts on page 9 look familiar.]

Obama to push tax on too-big-to-fail banks (Nasiripour) Not a lot of details: "the planned tax would be imposed in a way that targets firms' riskiest activities, such as proprietary trading. It would be crafted in a way that doesn't affect a financial company's retail banking, so that the cost theoretically would not be passed on to retail customers -- but it wasn't clear exactly how that would work." And will it tax other TBTF firms besides banks? What about insurers? What about GE? Update: WSJ says the tax will target bank liabilities.

Finra messed up, what a shock

The report by Finra on its failure to detect the alleged Ponzi scheme at Allen Stanford’s offshore bank is no shock.

Finra makes the SEC look like an agressive regulator. And this should give anyone reason to pause when you consider that Mary Schaprio, the current Securities and Exchange Commission chairman, most recently headed-up Finra.

Calling all HFT victims

Now that the SEC has rebuffed my request to gather information about investor complaints about high-frequency trading, I’m calling on you for help.

If you have sent a complaint in the past year complaining about HFT and the impact it is having on particular stocks, or the broader market, I’d like to hear from you. You can reach me by email:

SEC’s flash in the pan


Securities regulators will often settle for the proverbial low-hanging fruit — prosecuting easy cases that don’t make a big difference in the way Wall Street operates. But it does give the appearance they’re doing something.

And so it is with the Securities and Exchange Commission’s proposal to stamp out flash trading, an unsavory practice that has permitted some high-frequency trading desks to get a millisecond sneak peak at market trade orders.

from Rolfe Winkler:

Rakoff throws down the gauntlet

Judge Rakoff has rejected the settlement deal between the SEC and Bank of America. He clearly wasn't happy with it to begin with, and subsequent briefs from the two parties did nothing to allay his concerns. At the end of the day, he hated the idea that B of A shareholders, on whose behalf the SEC actually brought the case, would end up paying the fine for executives' wrongdoing.

So what's the next step? According to the Reuters story, "Rakoff directed the parties to prepare for a possible trial that would begin no later than February 1, 2010."

The SEC’s animal house

Mary Schapiro wants her lawyers and investigators at the Securities and Exchange Commission to go back to school. Specifically, she wants them to enroll in something she calls “fraud college.”

From what I gather, the SEC’s “fraud college” will be an intensive training program to help the agency’s employees better detect fraud. It’s not the worst idea. But as Bess Levin at Dealbreaker points out it does sound a bit silly.

Madoff verdict: The SEC is plain incompetent

A lengthy report examining the many ways the Securities and Exchange Commission botched its investigations of Bernie Madoff tells us something we already knew: the SEC can be awfully incompetent.

The report by the SEC Inspector General quickly dispenses with the notion that regulators either protected Madoff or covered-up their investigatory failures. But that’s the best that can be said for the SEC in this massive undertaking.

Dude, what happened to my 10K Wizard

I’m a big fan of 10K Wizard. I have been for years. It’s a far better way to search SEC filings than using Edgar–even though it costs money.

 So it didn’t surprise me that Morningstar bought 10K Wizard about a year ago–someone was bound to. And up until this point Morningstar pretty much has left 10K Wizard alone, except for slapping its name on the website.

from Rolfe Winkler:

The infamous “disclosure schedule”

At the bottom is the SEC's latest brief for Judge Rakoff.

Having gone through BofA's, one finds --publicly disclosed for the first time -- the "disclosure schedule" that outlined bonuses BofA had agreed Merrill could pay:

“Variable Incentive Compensation Program (‘VICP’) in respect of 2008 ... may be awarded at levels that (i) do not exceed $5.8 billion in aggregate value (inclusive of cash bonuses and the grant date value of long-term incentive awards)...