CANADA, March 8 (Business Law Currents) – With the Supreme Court of Canada having put an end to the notion of a national securities regulator this past December, securities regulation and enforcement remain matters of provincial and territorial jurisdiction, at least for the time being. In the wake of that decision, several reports have recently been issued regarding enforcement activities by provincial regulators. (more…)
Financial Regulatory Forum
By Brett Wolf
ST. LOUIS/NEW YORK, March 7 (Thomson Reuters Accelus) – Despite an international push for financial institutions to crack down on corruption and money laundering linked to political figures, it remains unclear how firms in the United States and abroad will respond.
Some U.S. financial institutions say they have taken steps to address the specific corruption and money laundering risks associated with American political figures and those close to them. Others say they have not, and to date, regulators’ expectations are unclear. (more…)
By Emmanuel Olaoye
NEW YORK, March 6 (Thomson Reuters Accelus) - The U.S. Justice Department plans to step up its hiring of staff to investigate abuses in the packaging of residential mortgage backed securities and to work with regulators to uncover serious fraud, a senior department official told Thomson Reuters in the wake of criticisms that Obama administration efforts were insufficient.
Last week, the former chairman of the Financial Crisis Inquiry Commission claimed that the government was not doing enough to uncover serious fraud. In a New York Times opinion piece, Phil Angelides said the 55 attorneys, agents and analysts assigned to the administration’s new mortgage packaging Working Group were not enough to uncover serious fraud. Angelides also criticized the absence of federal regulators in the Working Group. (more…)
NEW YORK, March 5 (Thomson Reuters Accelus) - Companies in the United States should focus on implementing performance metrics to defend themselves from whistleblower claims and to prevent misconduct within the company, according to a report from consultancy PricewaterhouseCoopers.
Using metrics such as the turnover of compliance staff and the percentage of anonymous reports can help a company monitor the performance of its compliance program. It can also help to reduce the chances of an employee reporting misconduct directly to the Securities and Exchange Commission, PwC said in the report, which is an analysis of whistleblower rules included in the Dodd-Frank regulatory overhaul and adopted last May by the SEC. (more…)
By Peter Elstob
LONDON/NEW YORK, March 5 (Thomson Reuters Accelus) - Regulators and market participants continue to differ fundamentally over when a credit default swap should be deemed to be uncovered, or ‘naked’, and when investors are using CDS as a legitimate hedge. If a sovereign CDS can be demonstrated to be hedging counterparty or systemic risk, it can be exempted from the provisions of the proposed European short-selling regulation, which is aimed at abusive use of sovereign CDS by financial institutions to bet against countries’ debt.
Trade bodies argue that regulators should recognize various forms of ‘proxy’ hedging, including buying CDS for the debt of countries other than the one where the institution’s exposure lies — so-called ‘cross-border’ hedging’ — and ‘tail-risk’ hedges that may or may not turn out to have been necessary over a given period. They believe that the short-selling regulation (level 1) does not ban these strategies, and they should therefore be permitted (and so qualify for exemptions) in the detailed rules (level 2) that the European Securities and Markets Authority (ESMA) is still drawing up. (more…)
By Brett Wolf
NEW YORK, Feb. 23 (Thomson Reuters Accelus) - The U.S. Justice Department has suffered a string of setbacks in its efforts to enforce the Foreign Corrupt Practices Act, including two this week, but it retains sufficient leverage to persuade companies to settle bribery allegations without a legal fight, sources said.
“I think companies should be emboldened, but I doubt they will,” said Mike Koehler, an assistant professor of business law at Butler University. “After all, to challenge the Justice Department and to put it to its burden of proof requires a company to be criminally indicted.” Indictment would not only open up a long legal battle, it would also threaten a company’s reputation. (more…)
LONDON/NEW YORK, Feb. 23 (Thomson Reuters Accelus) – Britain’s Financial Services Authority (FSA) could see its credibility undermined as individuals with deep pockets choose not to challenge fines, instead paying up but then publicly criticising the regulator, a leading regulatory lawyer has warned. “I think it will be interesting to see whether … individuals and firms decide, for good commercial reasons, not to challenge cases, but to either settle them or to leave them uncontested, but then to comment rather adversely on the FSA’s process and finding,” said Helen Marshall, a former senior FSA enforcement official and now a partner at Bingham McCutchen LLP. (more…)
(Business Law Currents) – The global nature of business has perhaps never been more evident than in the wake of the U.S. housing crisis, the natural disasters in Japan and the ongoing European sovereign debt ruckus. Industries and national economies do not exist in a vacuum, nor do the regulatory changes which nations seek to implement in order to address widespread concerns.
The most recent example of the “extraterritorial” impact of a nation’s laws is a rule being promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). Released last October, the Volcker rule is a proposal to prohibit proprietary trading and hedge or private equity fund investments by banking entities. (more…)
NEW YORK, Feb. 17 (Business Law Currents) – With a slew of Dodd-Frank and SEC driven regulations headlining the 2012 proxy season, enhanced director disclosure will be a prominent issue as investors demand heightened corporate accountability and broader levels of transparency. Rules put in place a couple years ago on compensation policies, risk incentivizing, director/nominee disclosure, board structure and oversight have now had the time to incubate sufficiently for companies to respond in a serious manner.
The Main Street versus Wall Street debate and the ensuing Occupy Wall Street movements have done much to expand public angst from mere disgruntlement with corporate America to even more emphasis on corporate governance in general. The public battle is now being waged increasingly on the battlefield of executive compensation, and as a consequence, on director disclosure. (more…)
By Martin Coyle
LONDON/NEW YORK, Feb. 16 (Thomson Reuters Accelus) - City lawyers have praised Margaret Cole’s legacy following her decision to depart the Financial Services Authority and have said her successor faces a tough job continuing her good work as head of enforcement. Observers also noted that Cole’s failure to secure the top job at the new Financial Conduct Authority meant that her departure was inevitable. Cole, managing director and board member, announced her exit from the regulator yesterday after seven years. Cole, who joined the regulator as director of enforcement in 2005 from U.S. law firm White & Case, is widely credited with pushing forward the FSA’s recent tough approach to combating financial crime and market abuse. The importance of her departure was perhaps reflected as the news was briefly ‘trending’ on Twitter yesterday. (more…)