Corporate & Securities Law

NASAA Rebuts SIFMA Testimony on

Posted on March 25, 2009
NASAA Rebuts SIFMA Testimony on Legal Standards of CareThe North American Securities Administrators Association (NASAA), the Consumer Federation of America, and the Investment Adviser Association have called upon Congress to apply a fiduciary duty to all financial professionals who give investment advice regarding securities...

US Securities Exchanges Urge SEC

Posted on March 25, 2009
US Securities Exchanges Urge SEC to Adopt Modernized Uptick Rule With Congress readying legislation directing the SEC to reinstate rule 10a-1, the uptick rule, a consortium of US securities exchanges sent a letter to SEC Chair Mary Schapiro urging the Commission to adopt a modified and modernized version of the uptick rule...

Draft Legislation Designates CESR

Posted on March 25, 2009
Draft Legislation Designates CESR as Single EU Regulator for Credit Rating AgenciesA committee of the European Parliament has reported out legislation providing for the regulation of credit rating agencies under a single EU-wide regulator, the Committee of European Securities Regulators (CESR)...

SEC Would Be Part of Systemic Risk

Posted on March 24, 2009
SEC Would Be Part of Systemic Risk Regulator in Senate Reform BillA bill introduced by Senator Susan Collins would create a new federal systemic risk regulator to monitor the financial markets and oversee financial regulatory activities. Eschewing the Federal Reserve Board for such a role, the Financial System Stabilization and Reform Act, S 664, would create an independent Financial Stability Council to serve as systemic-risk regulator...

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Kanjorski to Keynote NASAA Public

Posted on March 24, 2009
Kanjorski to Keynote NASAA Public Policy ConferenceThe North American Securities Administrators Association (NASAA) has announced that Rep. Paul E. Kanjorski (D-PA) will deliver the keynote address at NASAA's 24th Public Policy Conference in Washington, D...

SEC Commissioner Walter Details

Posted on March 24, 2009
SEC Commissioner Walter Details Hedge Fund Enforcement and Extraordinary Efforts Being Made in Madoff CaseAs the financial crisis deepens, SEC enforcement activities have focused intensely on a number of institutional players in the financial market, including hedge funds...

Sirri Outlines SEC's Systemic Risk

Posted on March 24, 2009
Sirri Outlines SEC's Systemic Risk Role and Lessons from CSE ProgramAs Congress considers creating a systemic risk regulator as part of a new financial services regulation structure, noted SEC Director of Trading and Markets Erik Sirri, the Commission is focusing on how best to deploy its broker-dealer expertise in the new regulatory paradigm...

SEC Approves FINRA Rule 5122 re

Posted on March 23, 2009
SEC Approves FINRA Rule 5122 re Private Placements of Securities Issued by MembersThe SEC approved FINRA's proposal to adopt new FINRA Rule 5122, that will require a member offering or selling any security in a private placement issued by the member or a "control entity" to:(1) disclose to investors in a private placement memorandum, term sheet or other offering document the intended use of offering proceeds and the offering expenses;(2) file the offering document with FINRA; and(3) commit that at least 85% of the offering proceeds will be used for business purposes, that will not include offering costs, discounts, commissions and any other cash or non-cash sales incentives...

Commissioner Parades Suggests Four

Posted on March 23, 2009
Commissioner Parades Suggests Four Ways to Make SEC Enforcement More EffectiveSEC Commissioner Troy Paredes has suggested four ways to make SEC enforcement more efficient and effective: involving case selection, case tracking, cooperation credit, and self assessment...

SEC Investment Management Director

Posted on March 23, 2009
SEC Investment Management Director Calls for New Money Market Fund ModelAs the financial crisis continues and money market funds face the most challenging period of their history, Andrew Donohue, the SEC?s Director of Investment Management has called for a review of rule 2a-7 and the money market fund model...

UK FSA Sets Out Blueprint for Massive

Posted on March 22, 2009
UK FSA Sets Out Blueprint for Massive Financial Regulatory ReformUK Financial Services Authority Chair Adair Turner has set out a broad plan for overhauling financial regulation that envisions increased reporting requirements for unregulated financial institutions such as hedge funds as part of a pan-European systemic risk regulator...

Ag Committee Reports Out Gensler

Posted on March 20, 2009
Ag Committee Reports Out Gensler Nomination for CFTC Chair to Full SenaterThe Senate Agriculture Committee has favorably reported out to the full Senate the nomination of Gary Gensler to be the new CFTC Chair. Mr. Gensler is a former Treasury Under Secretary for Domestic Affairs...

SEC Official Questions Validity

Posted on March 20, 2009
SEC Official Questions Validity of Value-at-Risk; Endorses Mark-to-Market AccountingThe financial crisis revealed limitations in risk valuation metrics such as the widely-used value-at-risk (VaR) model, said SEC Director of Trading and Markets Erik Sirri, in testimony before Senate hearings on risk management...

House Bill Would Impose 90 Percent

Posted on March 19, 2009
House Bill Would Impose 90 Percent Tax on TARP BonusesA House bill, HR 1586, placed on a fast track, would impose a 90 percent tax on bonuses paid after December 31, 2008, by companies that have received over $5 billion in TARP funds. The tax would also apply to bonuses paid by entities affiliated with these companies...

UK FSA Officlal Urges Investors

Posted on March 19, 2009
UK FSA Officlal Urges Investors to Help Ensure Effective Risk ManagementWhile senior management and others bear a strong responsibility for the financial crisis, a UK FSA official said that investors have to engage more actively with senior corporate management and independent directors in the areas governance, risk management, and compensation...

State Securities Regulators to

Posted on March 19, 2009
State Securities Regulators to Offer Testimony on Enhancing EnforcementThe North American Securities Administrators Association (NASAA) announced today that Massachusetts Secretary of the Commonwealth William Galvin and Delaware Securities Commissioner James Ropp are scheduled to appear before the House Financial Services Committee in order to offer proposals on enhancing the enforcement of financial crimes...

Ranking Member on Financial Services

Posted on March 19, 2009
Ranking Member on Financial Services Committee Urges SEC to Act on Mark-to-Market; While FASB Proposes GuidanceResponding to intense congressional pressure to act, the FASB proposed two staff positions intended to provide additional guidance regarding fair value measurements and impairments of securities...

Australia to Broaden Shareholder

Posted on March 19, 2009
Australia to Broaden Shareholder Approval of Golden HandshakesThe Australian Treasury said that it will seek legislation expanding the categories of termination payments to company executives, so called golden handshake, subject to shareholder approval...

Audit Firm Governance Code Provisions

Posted on March 19, 2009
Audit Firm Governance Code Provisions Draw CommentThe wide-ranging project to draft a governance code for audit firms has drawn a range of comment in the wake of a consultation published by the Audit Form Governance Working Group. The process is being overseen by the UK Financial Reporting, which has oversight of the audit of listed companies...

SEC Receiver Opposes Investor Efforts to Intervene in Commission Action Against Stanford Firm

Posted on March 18, 2009
The SEC?s court-appointed receiver opposes an effort by investors to intervene in the SEC?s enforcement action alleging a multi-billion dollar fraudulent scheme by the Stanford investment firm. Allowing investor intervention would be wasteful, said the receiver, because they will soon have available an effective claim certification process...

SEC Charges Madoff Firm?s Auditors with Securities Fraud

Posted on March 18, 2009
An SEC enforcement action alleges that the outside auditors of Bernard Madoff Investment Securities LLC committed securities fraud by representing that they had conducted legitimate audits, when in fact they had not. The SEC had previously charged the Madoff firm with committing securities fraud through a multi-billion dollar Ponzi scheme perpetrated on advisory and brokerage customers...

Senate Bill Strengthening Securities Fraud and Financial Fraud Enforcement Clears Judiciary Committee

Posted on March 18, 2009
A bill to improve enforcement of securities fraud and financial institution fraud involving asset-backed securities and fraud related to federal assistance and relief programs has been reported out of the Senate Judiciary Committee. The bill was introduced by Senator Patrick Leahy, chair of the Judiciary Committee, and Senator Charles Grassley...

Senate Finance Committee Preparing Legislation on Executive Compensation

Posted on March 18, 2009
The leaders of the Senate Finance Committee set forth the principles for draft legislation designed to discourage excessive compensation at companies that have taken taxpayer funds, including executives at recipient institutions of TARP funds. The core principles are a federal excise tax on excessive compensation and a $1 million cap on deferred compensation...

Senate Bill Would Order SEC to Reinstate Uptick Rule

Posted on March 17, 2009
A bi-partisan bill, S 605, ordering the SEC to reinstate the uptick rule has been introduced by Senators Ted Kaufman (D-DE) and Johnny Isakson (R-GA). Since the uptick rule?s repeal in July 2007, said the senators, the abuse of naked short-selling, which is the selling of stock that the trader does not own, has added fuel to the fire of distressed stocks and markets...

IRS Issues Guidance for Investors in Ponzi Schemes

Posted on March 17, 2009
The IRS issued two guidance items to assist taxpayers victimized by losses in Ponzi investment schemes. While the guidance will cover investors in the Bernard Madoff investment firm, the IRS guidance is not specific to the Madoff fraud. The first item is a revenue ruling clarifying federal tax law governing the treatment of losses in such schemes...

IMF and G-20 See Hedge Fund Regulation

Posted on March 16, 2009
IMF and G-20 See Hedge Fund Regulation as Component of Overall ReformThe International Monetary Fund has recommended the regulation of hedge funds that pose a systemic threat to the financial markets as part of the overhaul of financial regulation being planned in the US and the European Union...

SEC Requires Electronic Filing

Posted on March 16, 2009
SEC Requires Electronic Filing of Form D Effective March 16Effective today, March 16, 2009, the SEC requires issuers making an offering under Regulation D to file new Form D electronically.http://www.sec.gov/

SEC Will Confirm Assets of Investors in Hedge Funds Managed by Registered Investment Advisers

Posted on March 13, 2009
SEC Will Confirm Assets of Investors in Hedge Funds Managed by Registered Investment Advisers as Part of Adviser Examinations Senior SEC officials announced at a recent Managed Funds Association seminar that as part of the routine examinations of registered investment advisers the SEC staff will seek confirmations from investors in hedge funds managed by the advisers of cash and securities held by advised clients...

NASAA Opposes OCC's Assertion of

Posted on March 13, 2009
NASAA Opposes OCC's Assertion of Regulatory PreemptionThe North American Securities Administrators Association (NASAA) has filed an amicus brief in the case of Cuomo v. Clearing House Assn., L.L.C., urging the United States Supreme Court to reverse a ruling of the Second Circuit that enjoined the New York Attorney General from investigating racially discriminatory lending practices by several national banks and their operating subsidiaries...

First Batch of Amicus Briefs Support Petitioner in PCAOB Supreme Court Test

Posted on March 13, 2009
The three amicus briefs filed so far with the US Supreme Court in an action testing the PCAOB?s constitutionality have all supported the audit firm seeking to have the Board declared unconstitutional. The audit firm has asked the Court to hear an appeal from a panel of the US Court of Appeals for the District of Columbia that ruled the Board was constitutional...

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