Financial Regulatory Forum

By Daniel Seleanu, Compliance Complete

TORONTO, April 5 (Thomson Reuters Accelus) – In a landmark settlement, the Ontario Securities Commission (OSC) has fined and permanently banned Bernard Boily for falsifying scientific research used in press releases by Bear Lake Gold Ltd., a mining exploration company listed on the TSX Venture Exchange in Toronto. When Bear Lake Gold announced that its research had been tampered with, it suffered a one-day market capitalisation loss of $42 million.

The Boily case is the first to come before the OSC that pertains to the conduct of a qualified person, a position defined as a gatekeeper of technical information under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (PDF) (NI 43-101). (more…)

By Stuart Gittleman, Compliance Complete

NEW YORK, Mar. 26 (Thomson Reuters Accelus) - Court-approved securities class action settlements reported in 2012 were at a 14-year low and 18 percent fewer than in 2011 but they cost defendants twice as much as the prior year, a report released Wednesday said.

The study by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research associated settlement values with factors including the presence of enforcement actions related to the lawsuits. This may hold clues to the outcomes in recently litigation over alleged manipulation of the global lending benchmark LIBOR, the London Interbank Offered Rate.  (more…)

By Rachel Wolcott

LONDON/NEW YORK, July 30 (Thomson Reuters Accelus) - Risk managers could benefit from the financial services industry’s revamp of collateral management services in preparation for the new regulatory requirements that will drive demand for high-quality collateral. New regulations for the clearing of over-the-counter (OTC) derivatives through central counterparties (CCPs) alone could increase demand for high-quality collateral to $2 trillion or more, according to some estimates. In response, some firms are aiming for a more universal approach to collateral management.

Many firms still take a rather old-fashioned view of collateral management. It is often fragmented and inefficient. Most firms operate collateral management in silos determined by geography or asset class. This can lead to poor communication between different collateral management functions — for example, repo staff might not speak to the securities lending unit, or the New York office might not speak to its UK counterpart as much or as often as it should.  (more…)

By Kim R. Manchester, Thomson Reuters Accelus contributing author

NEW YORK, July 16 (Thomson Reuters Accelus) - A Settlement Agreement was released in June 2012 by the United States Department of the Treasury regarding the voluntary self-disclosure to the Office of Foreign Assets Control (OFAC) by ING Bank, N.V. (ING Bank), a financial institution registered and organized in the Netherlands. The violations of numerous sanctions programs imposed by the United States against Cuba, Burma, the Sudan, Libya and Iran were determined by the Americans as “egregious.” (more…)

By Stuart Gittleman

NEW YORK, July 11 (Thomson Reuters Accelus) – The Financial Industry Regulatory Authority, the U.S. brokerage regulator, warned investors Tuesday in an alert of the features and risks of exchange-traded notes.

The alert, Exchange-traded notes: avoid unpleasant surprises, listed the risks of certain ETNs and urged investors to carefully investigate before investing in them.  (more…)

By Helen Parry, additional reporting by Julie Dimauro

LONDON/NEW YORK, May 25 (Thomson Reuters Accelus) – Facebook’s chaotic initial public offering has sparked much speculation and legal action based on the idea that securities laws and regulations over disclosure may have been breached, which would leave Facebook and others involved in the offering process liable to potential regulatory enforcement or civil liability for losses caused to investors.

An analyst at lead underwriter Morgan Stanley cut his revenue forecasts for Facebook in the days before the offering, information that may not have reached many investors before the stock was listed, Reuters has reported. (more…)

By Thomson Reuters Accelus staff

NEW YORK, Oct. 19 (Business Law Currents) – Banking lawyers should be forgiven if they’re not returning calls right away: they’re busy trying to digest the Volcker Rule (or “the rule”). The proposed rule’s 298-page doorstop represents the collective efforts of the Treasury Department, Fed, FDIC and SEC to implement §619 of the Dodd-Frank Act, which itself added a new §13 to the Bank Holding Company Act of 1956 (the BHC Act). The intent of the Volcker Rule is to “generally prohibit any banking entity from engaging in proprietary trading or from acquiring or retaining an ownership interest in, sponsoring, or having certain relationships with a hedge fund or private equity fund (“covered fund”), subject to certain exemptions.”

So does the Volcker Rule satisfy its mandate? To paraphrase ‘The Simpsons’: yes with an “if,” no with an “unless.” The rule carves out significant exemptions from the proscription against proprietary trading, but each of these exceptions has a number of criteria required to take advantage of the exemption. Moreover, a number of the rule’s measures provide for rebuttable presumptions of non-compliance for certain types of trading activity. (more…)

"They love a conspiracy theory on the boards," David Jones, chief market strategist at spread betting firm IG Index told UK correspondents Rosalba O'Brien and Matt Scuffham when they were reporting for "The stock, the web, the CEO and his lawyers" . It's a look at some of the shenanigans around highly speculative resource stocks when they are discussed on message boards like  ADVFN and iii. Late-night gossip and personal insults are par for the course: some suspect organised short-sellers may be behind the talk. Given the high volumes of online trading in the UK, we wonder how long it will be before regulator FSA is forced to take a closer look.

Day-trader John Douce is sceptical about the boards' impact on stock prices

By Huw Jones
LONDON, Sept 8 (Reuters) – Fragmentation of share trading data makes it harder for European investors to spot the best prices but there is no appetite so far for public intervention, industry officials said on Tuesday.
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By Jonathan Spicer
NEW YORK, Aug 6 (Reuters) – The Nasdaq Stock Market and BATS Exchange said in separate statements on Thursday they will “voluntarily” stop offering so-called flash orders, a controversial service that gives certain firms an advance look at market-bound trading orders. (more…)