Corporate & Securities Law

Supreme Court Will Decide Constitutionality

Posted on May 18, 2009
Supreme Court Will Decide Constitutionality of PCAOBThe US Supreme Court has agreed to hear an audit firm?s challenge to the constitutionality of the PCAOB. The audit firm asked the Supreme Court to declare the PCAOB unconstitutional because Sarbanes-Oxley Act provisions creating the Board violate the separations of powers and Appointments Clause by essentially stripping the President of all powers to appoint or remove Board members...

Supreme Court Takes PCAOB CaseThe

Posted on May 18, 2009
Supreme Court Takes PCAOB CaseThe Supreme Court today granted the petition for certiorari in Free Enterprise Fund v. PCAOB.

Chinese Central Bank Chief Identifies

Posted on May 17, 2009
Chinese Central Bank Chief Identifies Ratings Agencies and Fair Value Accounting as Driving Pro-Cylicality in CrisisThe Governor of the People?s Bank of China has identified two pro-cylical factors that worked to exacerbate the financial crisis: credit rating agencies and fair value accounting...

German Government Proposes Legislation

Posted on May 15, 2009
German Government Proposes Legislation to Take Toxic Securities Off Bank Balance SheetsThe German government has proposed legislation to transfer toxic securities from the balance sheets of financial instructions to specific purpose vehicles, colloquially called ``bad banks,?? which will not have to be licensed...

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Panelists at ICI Conference Focus

Posted on May 14, 2009
Panelists at ICI Conference Focus on Market Crisis and Regulatory ReformThe below post is courtesy of my colleague Amy Leisinger, who attended the below conference.As the fund industry has evolved to meet the demands of recent economic events and to attempt to calm increasing investor anxiety, perspectives have been forced to change, Director of the SEC's Division of Investment Management Andrew Donohue explained in his keynote address at the Investment Company Institute's ("ICI") annual mutual funds conference...

Key Senator Urges Passage of Legislation

Posted on May 14, 2009
Key Senator Urges Passage of Legislation Authorizing Regulation of Swaps as First Step in Broad OTC Derivatives RegulationPraising the Obama Administration?s proposal to regulate OTC derivatives, Senator Levin urged quick action on his legislation repealing existing statutory provisions prohibiting federal regulators from exercising authority over swaps...

FASB and IASB Working Together

Posted on May 14, 2009
FASB and IASB Working Together to Satisfy G-20 Goals Says Advisory GroupThe FASB and IASB are working together to meet the G-20 goals of improved valuation standards and achieving a single set of high-quality global accounting standards. In a letter to the G-20, the Financial Crisis Advisory Group said that the two Boards are working jointly to improve and converge standards and have given priority to areas highlighted by the financial crisis...

SEC Chair Schapiro Details Reforms

Posted on May 13, 2009
SEC Chair Schapiro Details Reforms Taken in Response to Senate ReportIn a letter to Senator Charles Grassley, SEC Chair Mary Schapiro detailed actions taken by the Commission in response to a Senate report vetted by Senator Grassley. According to Senator Grassley, the reforms implemented by the SEC will benefit investors and the market by standardizing procedures, prioritizing resources, increasing the transparency of external Commission communications and internal recusals, establishing guidelines for handling employee complaints and dismissals, protecting whistleblowers inside the agency and recognizing the independence of the SEC ?s Inspector General...

Obama Administration Proposes Broad

Posted on May 13, 2009
Obama Administration Proposes Broad Federal Regulation of OTC DerivativesThe Obama Administration has proposed legislation to provide for a comprehensive and detailed regulatory regime for all OTC derivatives. The legislation would be designed to achieve the four broad goals of preventing systemic risk to the financial system, promoting transparency, preventing market manipulation, and protecting unsophisticated parties...

Senate Passes Legislation Imposing

Posted on May 13, 2009
Senate Passes Legislation Imposing Disclosure and Fiduciary Duties on Treasury Program to Remove Toxic SecuritiesThe Senate has passed legislation providing for additional oversight of the Treasury?s Public-Private Investment Program (PPIP), which is designed to remove toxic securities from the balance sheets of financial institutions...

Obama Tax Reform Proposals Would

Posted on May 12, 2009
Obama Tax Reform Proposals Would Repeal LIFO to Conform to IFRS; and Increase Taxes on Securities and Commodities DealersAnticipating SEC adoption of international financial reporting standards (IFRS), the Obama Administration proposed to repeal the last-in, first-out (LIFO) method of accounting for inventories...

Legislation Requiring SEC Registration

Posted on May 11, 2009
Legislation Requiring SEC Registration of Hedge Fund Advisers Will be Narrowly Crafted Says House LeaderDuring House hearings on legislation to regulate hedge fund advisers, Rep. Paul Kanjorski said that hedge funds deserve a narrowly tailored regulatory treatment...

Hong Kong Appeals Court Issues

Posted on May 11, 2009
Hong Kong Appeals Court Issues Landmark Ruling Disapproving Going Private Scheme in Light of SFC ConcernsA three-judge Hong Kong appeals court has ruled that a scheme to take over and privatize a major telecommunications company involved a manipulation of the shareholder vote and the coercion of minority shareholders...

SEC Charges Hedge Fund Manager

Posted on May 11, 2009
SEC Charges Hedge Fund Manager In First Insider Trading Case Involving Credit Default SwapsThe SEC has filed an enforcement action alleging that a hedge fund manager and a Deutsche Bank Securities bond salesman engaged in insider trading in the credit default swaps of an international holding company, VNU, a Dutch media conglomerate...

US Hedge Fund Industry Supports

Posted on May 10, 2009
US Hedge Fund Industry Supports Proposed EC Directive on Hedge Fund RegulationThe US hedge fund industry has expressed qualified support for the European Commission?s proposed Directive regulating hedge fund managers and private equity fund managers. The Managed Funds Association particularly praised the Commission?s rejection of direct regulation of the hedge funds themselves in favor of regulating hedge fund managers...

IASB US Member Urges Timely US

Posted on May 09, 2009
IASB US Member Urges Timely US Adoption of IFRS; Agrees with FASB on Fair ValueBucking a growing trend to delay the US adoption of IFRS, one of the three American members on the IASB has urged the US to adopt IFRS within the next five years. In remarks at a recent European Commission seminar, John Smith said the over 100 countries that have already adopted IFRSs would not accept a situation where the United States remains outside the system indefinitely, yet also has a seat at the table...

House Passes Senate Bill Strengthening

Posted on May 08, 2009
House Passes Senate Bill Strengthening Securities Fraud and Financial Fraud EnforcementThe House passed, as amended, a Senate bill to improve enforcement of securities fraud and financial institution fraud involving asset-backed securities and fraud related to federal assistance and relief programs...

Audit Firm Asserting Unconstitutionality

Posted on May 08, 2009
Audit Firm Asserting Unconstitutionality of PCAOB Refutes Exhaustion of Remedies ArgumentTaking square aim at the Government?s argument that an audit firm challenging the PCAOB?s constitutionality in federal court failed to exhaust its SEC administrative remedies, the firm told the Supreme Court that it would not invent a fictional controversy with the SEC solely to create a vehicle to challenge the Board?s constitutionality...

Regional Director Addresses Enforcement

Posted on May 07, 2009
Regional Director Addresses Enforcement IssuesThe SEC must speed up its investigative process, said Merri Jo Gillette, regional director of the SEC's Chicago regional office. According to Ms. Gillette, the Enforcement Division must bring more meaningful cases in a timely fashion to maximize the impact of the division's limited resources...

Senator Schumer Readies Major Corporate

Posted on May 07, 2009
Senator Schumer Readies Major Corporate Governance Reform LegislationPosting that a main cause of the current financial crisis is the widespread failure of corporate governance legislation, Senator Charles Schumer plans to introduce legislation requiring say on pay as part of broad shareholder rights reforms...

European Commission Proposes Directive

Posted on May 06, 2009
European Commission Proposes Directive on Hedge Funds and Private Equity Funds under Strong Disclosure and Risk Management RegimeIn a move that is the first of its kind in the world, and anticipates similar legislation in the US, the European Commission has proposed the broad regulation of managers of hedge funds and all private equity funds with 100 million euros of assets under management...

Eight Days a Week is Not Enough

Posted on May 05, 2009
Eight Days a Week is Not Enough to Show I Care ScienterAccording to a 5th Circuit panel, statements and alleged omissions made by a company CEO prior to and during an issuer tender offer were not fraudulent. The CEO stated shortly before commencement of the offer that the company did not anticipate a dividend increase for nearly two years, but that the dividend policy remained "under review...

Kansas Increases Investment Company

Posted on May 01, 2009
Kansas Increases Investment Company FeesThe notice filing fee for an investment company is increased to $750, from $500, and the notice filing fee for a unit investment trust is increased to $500, from $200, effective May 15, 2009.

Senate Passes Measure Strengthening

Posted on April 30, 2009
Senate Passes Measure Strengthening Securities Fraud and Financial Fraud Enforcement; Creating Financial Markets Commission 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 passed the US Senate...

European Commission Proposes Broad

Posted on April 30, 2009
European Commission Proposes Broad Regulation of Hedge Fund and Private Equity Fund ManagersIn a move that is the first of its kind in the world, and anticipates similar legislation in the US, the European Commission has proposed the broad regulation of managers of heddde funds and all private equity funds with 100 millon euros of assets under management...

Utah To Increase Mutual Fund and

Posted on April 28, 2009
Utah To Increase Mutual Fund and Rule 506 FeesThe mutual fund/unit investment trust notice filing fee will increase to $600, from $500, and the Rule 506 notice filing fee will increase to $100, from $60, for filings received by the Utah Securities Division on or after July 1, 2009...

Fraud Claim Could Not Rest on Omissions

Posted on April 23, 2009
Fraud Claim Could Not Rest on Omissions from Martin Act DisclosuresThe New York Court of Appeals has held that the purchaser of a condominium could not bring a claim for common law fraud based solely on alleged material omissions from disclosures mandated by the New York Blue Sky Law (Martin Act)...

US Supreme Court Will Conference

Posted on April 22, 2009
US Supreme Court Will Conference on PCAOB Case in MayThe US Supreme Court will hold a conference on May 14, 2009 to decide if the Court wants to hear a case challenging the constitutionality of the PCAOB. Four Justices have to vote in conference to hear the case in order for the Court to take the PCAOB case and ultimately decide the Board?s constitutionality...

PCAOB Staff Alert Advises Auditors

Posted on April 22, 2009
PCAOB Staff Alert Advises Auditors on Impact of FASB Guidance on Fair Value AccountingA recent PCAOB staff practice alert instructs auditors to evaluate whether a firm?s financial statement disclosures are in conformity with recent FASB guidance on mark-to-market fair value accounting...

Basel Guidance Links Sound Corporate

Posted on April 21, 2009
Basel Guidance Links Sound Corporate Governance to Proper Fair Value AccountingIn the wake of FASB?s recent guidance on fair value accounting, the Basel Committee for Banking Supervision has issued guidance to financial institutions and their regulators designed to strengthen their valuation processes for financial instruments...

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