Corporate & Securities Law

Hedge Fund ``Carve In'' for Resolution

Posted on January 05, 2010
Hedge Fund ``Carve In'' for Resolution Fund Remains in House Bill as PassedDespite the hedge fund industry?s efforts to have it removed, a carve in for hedge funds in the amount of assets a firm manages with regard to triggering its contribution to a fund to resolve failing financial firms remains in the Wall Street Reform and Consumer Protection Act, HR 4173, as passed by the House...

PCAOB Internal Report Reveals Significant

Posted on January 04, 2010
PCAOB Internal Report Reveals Significant Challenges to Board's International Inspections ProgramAn internal report transmitted to the SEC reveals that the PCAOB?s international inspections program faces significant challenges, including accountability, delays in conducting inspections, and inconsistent documentation...

EC President Calls for Passage

Posted on January 03, 2010
EC President Calls for Passage of Derivatives Reform Legislation in 2010Jose Manuel Barroso, President of the European Commission, has called for the passage of derivatives reform legislation in 2010 along the lines already set forth by the Commission and carving out an exception for companies to hedge risk...

SEC-Approved Revised NYSE Corporate

Posted on January 01, 2010
SEC-Approved Revised NYSE Corporate Governance Listing Standards Take Effect January 1, 2010Effective January 1, 2010, the SEC approved significant changes to the New York Stock Exchange corporate governance listing standards, in part to conform the standards to the requirements of Item 407 of Regulation S-K, which consolidates director independence and related corporate governance disclosure requirements under a single item, and in part to conform the listing standards to Form 8-K=...

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House Legislation Change to Nationally

Posted on December 31, 2009
House Legislation Change to Nationally Registered Statistical Rating Organizations Could Engender Future Legislative FixNationally Recognized Statistical Rating Organizations are currently those credit rating agencies that are registered with the SEC and, therefore, regulated...

Draft Legislation in Hong Kong

Posted on December 31, 2009
Draft Legislation in Hong Kong Would Improve Corporate Governance Draft legislation in Hong Kong would significantly enhance corporate governance by enlarging shareholders remedies and access, codifying the directors? duty of care, strengthening the rights of independent auditors of financial statements...

FINRA Investment Adviser Oversight

Posted on December 30, 2009
FINRA Investment Adviser Oversight Provision Stripped from House Reform LegislationA floor amendment to the Wall Street Reform and Consumer Protection Act, HR 4173, offered by Rep. Cohen of Tennessee stripped a provision out of the legislation that would have authorized the SEC to delegate the regulation of investment advisers to FINRA...

Peterson-Frank Exchange Reveals

Posted on December 27, 2009
Peterson-Frank Exchange Reveals that Securities and Derivatives Exchanges Are Not Subject to Systemic Risk RegulationTitle I of the House Wall Street Reform and Consumer Protection Act, HR 4173, creates a systemic risk oversight and regulatory structure that enables regulators to raise capital requirements and impose heightened prudential standards on large, interconnected firms that could pose a threat to financial stability...

Alberta Challenges Move to Create

Posted on December 26, 2009
Alberta Challenges Move to Create National Securities RegulatorThe provincial government of Alberta has announced that it will launch a court challenge to the Canadian federal government's move to create a national securities regulator. In a news release on December 18, 2009, the Alberta government stated that it would file suit in the Alberta Court of Appeal to challenge the constitutionality of comprehensive federal legislation regulating securities...

Securities Regulation is Part of

Posted on December 24, 2009
Securities Regulation is Part of Larger Societal MatrixLet us for this one day, December 25, reflect on the larger issues of social responsibility and social justice rooted in the age-old belief that we all have value. And securities regulation, like the financial system itself, is part of the broader society it seeks to serve...

Fund Industry Concerned that House

Posted on December 24, 2009
Fund Industry Concerned that House Reform Legislation Could Sweep Mutual Funds into Strict Systemic Risk RegulationThe mutual fund industry has criticized provisions of the Wall Street Reform and Consumer Protection Act, HR 4173, that could sweep large funds into strict prudential systemic risk regulation...

House Legislation Hedging Exemption

Posted on December 23, 2009
House Legislation Hedging Exemption from Derivatives Regulation Subject to Floor AmendmentsThe House reform legislation would require over-the-counter derivatives trading to be conducted through clearinghouses, which are set up to police derivatives trading...

Commission Proposes Rule 163 Changes

Posted on December 22, 2009
Commission Proposes Rule 163 Changes Concerning Underwriters and DealersThe SEC proposed amendments to Securities Act Rule 163(c) (Release No. 33-9098). This rule currently allows well-known seasoned issuers, or "WKSIs," to engage in unrestricted oral and written offers filing a registration statement...

Michigan Issues Third Transition

Posted on December 22, 2009
Michigan Issues Third Transition Order Following Adoption of New ActA third transition order affecting three securities transaction exemptions, as well as broker-dealers, agents, investment advisers and investment adviser representatives, was issued by the Michigan Office of Financial and Insurance Regulation in connection with adoption of the new Michigan Uniform Securities Act on October 1, 2009...

Walker Report Calls for Asset Managers

Posted on December 22, 2009
Walker Report Calls for Asset Managers to Adopt Institutional Investors Code of Best PracticesThe Walker Report on corporate governance in the United Kingdom has called on fund managers and institutional investors to adopt a code of best practices on a comply or explain basis...

Hawaii 2009 Reduced Fees to Stay

Posted on December 21, 2009
Hawaii 2009 Reduced Fees to Stay Reduced in 2010Hawaii's 2009 reduced fees for dealer, salesperson, investment adviser, and investment adviser representative registration applications, and for investment company initial and renewal notice filings, will remain at the 2009 reduced amounts throughout 2010, subject to regulatory approval...

Class Members' Claims Did Not Require

Posted on December 19, 2009
Class Members' Claims Did Not Require Proof of Reliance or Causation Under South Carolina LawA federal district court (D.S.C.) has ruled that potential class members' claims under the South Carolina Securities Act (Act) did not require proof of causation or reliance in order for the plaintiffs to establish that the defendant's conduct predominantly involved questions of law or fact common to the class...

House Passes Legislation Bringing

Posted on December 18, 2009
House Passes Legislation Bringing Auditors of Brokerage Firms within Purview of PCAOB; Enhancing Foreign Regulatory Information SharingClosing a statutory loophole revealed by the Madoff scandal, the House has passed legislation authorizes the PCAOB to flexibly examine the auditors of broker-dealers...

SEC Charges Auditors, Former Executives

Posted on December 18, 2009
SEC Charges Auditors, Former Executives for Roles in Accounting Violations at Bally Total FitnessThe SEC charged former chief financial officer John W. Dwyer and former controller Theodore P. Noncek for their roles in an accounting fraud at Bally Total Fitness Holding Corp...

Initial CDS Insider Trading Case

Posted on December 18, 2009
Initial CDS Insider Trading Case Survives ChallengeThe first insider trading action filed by the SEC alleging misconduct in the credit default swaps market (SEC v. Rorech) survived a motion for judgment on the pleadings. The complaint, filed in the U...

The SEC adopted rule and form changes

Posted on December 17, 2009
The SEC adopted rule and form changes intended to enhance the information provided in proxy solicitations and in other forms filed with the SEC. Beginning in the upcoming annual reporting and proxy season, the new rules will improve corporate disclosure regarding risk, compensation and corporate governance matters when voting decisions are made...

House and Senate Legislation Combined

Posted on December 17, 2009
House and Senate Legislation Combined Would Benefit States The House and Senate versions of the bill to restructure the financial services industry contain a number of provisions requested by the states at the past two fall conferences of North American Securities Administrators Association (NASAA), namely: (1) providing states with regulatory authority over a larger percentage of investment advisers; (2) striking mandatory arbitration clauses from contracts, thereby allowing defrauded investors to adjudicate their claims in court for a better judgment; (3) removing Rule 506 offerings from the class of ?federal covered securities? under the NSMIA Act of 1996, thus permitting the states to once again regulate the merits of these offerings; (4) having a harmonized fiduciary duty standard for broker-dealers and investment advisers; (5) establishing a Consumer Financial Protection Agency that would preserve the current balance of power between state and federal law; and (6) adopting provisions to protect senior investors.

Commission Enhances Proxy Disclosure,

Posted on December 17, 2009
Commission Enhances Proxy Disclosure, Adviser Custody RulesThe SEC adopted rule and form changes intended to enhance the information provided in proxy solicitations and in other forms filed with the SEC. Beginning in the upcoming annual reporting and proxy season, the new rules will improve corporate disclosure regarding risk, compensation and corporate governance matters when voting decisions are made...

House Legislation Requires FASB

Posted on December 16, 2009
House Legislation Requires FASB to Study Securitization StandardsThe House has passed legislation requiring the Federal Reserve Board, in consultation with the SEC, to conduct a study and report to Congress on the impact on individual classes of asset-backed securities of FASB?s new securitization accounting standards, FAS 166 and 167, and the Act?s new credit risk retention requirements...

District Judge Criticizes SEC,

Posted on December 16, 2009
District Judge Criticizes SEC, CFTC Policy on Recovery of Principal from Ponzi Scheme "Winners"Paul S. Diamond, a U.S. district judge for the Eastern District of Pennsylvania, "reluctantly" approved a receiver's settlement with two "winning" investors in a multi-million dollar Ponzi scheme...

Briefing Paper Examines House LegislationThe

Posted on December 15, 2009
Briefing Paper Examines House LegislationThe CCH Editorial Staff of banking and securities law analysts has authored a detailed overview titled, "House Passes Wall Street Reform Act." Here is a passage from the introduction:On December 11, 2009, the U...

Supreme Court Oral Argument in

Posted on December 14, 2009
Supreme Court Oral Argument in PCAOB Case Centers on SEC Control of the Board and Presidential Removal PowersSupreme Court oral arguments in the case deciding the PCAOB?s constitutionality focused on the SEC?s pervasive control over the Board and the President?s control over the SEC...

House Reform Legislation Provides

Posted on December 14, 2009
House Reform Legislation Provides International Reach to Federal Securities LawsThe rapid globalization of financial markets in recent years has cast into stark relief issues surrounding the international reach of US securities laws. Since the federal securities laws are silent on their international reach, federal courts have developed tests, including the conduct test, which focuses on the nature of the conduct within the US as it relates to carrying out the alleged fraudulent schemeAs part of a sweeping overhaul of US financial regulation, the House has passed legislation authorizing the SEC and the United States to bring civil and criminal law enforcement proceedings involving transnational securities frauds, which are securities frauds in which not all of the fraudulent conduct occurs within the United States and not all of the wrongdoers are located domestically...

House Passes Historic Financial

Posted on December 11, 2009
House Passes Historic Financial Overhaul LegislationThe House of Representatives passed historic legislation today overhauling the US financial regulatory system. The legislation creates a systemic risk regulator, the Federal Stability Oversight Council, whose members include the Fed, the SEC and the CFTC, to monitor the marketplace to identify potential threats to the stability of the financial system...

Peterson-Frank Amendment on Derivatives

Posted on December 11, 2009
Peterson-Frank Amendment on Derivatives Finalized as House Moves Towards Passage of Reform Act Title III of the House legislation financial overhaul would reform the over-the-counter derivatives market. For the first time, the markets for credit default swaps and all other OTC derivatives would be subject to comprehensive federal regulation under an SEC-CFTC regime...

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