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Tag >> sec
Jan 13

Dodd seeks to override Supreme Court

Posted by Stephen Taub in Senator DoddsecregulatorslawsuitsfrauddisclosuresCongresscompliance

Stephen Taub

A little noticed provision of the Senate's sweeping financial service reform bill would over-ride a major Supreme Court ruling that bars individuals from suing so-called secondary actors in a securities fraud case.

The provision comes on the heels of a bill proposed by Senator Arlen Spector that would have the same effect.

Jan 07

“Spate of restatements may reignite Sarbox compliance war”

Posted by Stephen Taub in sox 404shareholderssecrestatementsinvestorfinancial statementsfinancial reportingdisclosureCongresscomplianceAccounting

Stephen Taub

The recent restatements from three puny companies-one of which faces possible delisting from Nasdaq-could reignite the debate over whether microcap companies should be required to comply with a key provision of the Sarbanes-Oxley Act as well as highlight a showdown between the SEC and the White House and Congress.

We're talking about Section 404b of the sweeping 2002 governance legislation, which requires companies to report to the public about the effectiveness of their internal control over financial reporting. The smallest public companies with a public float below $75 million have been given four extensions to design, implement and document these internal controls before their auditors are required to attest to the effectiveness of these controls. Opponents had been whining that complying with Section 404b would be too costly for the smallest companies and drive many of them to list their shares overseas.  Alas, this never happened.

Jan 06

AIG Confidential

Posted by kcates in Societe GeneralesecRoy BluntNew York FedGoldman SachsGeithnerDeutsche BankcomplianceCharles GrassleyBarney FrankAIG


Congress is acting like a nest of mad hornets on word that the New York Fed hid some details of AIG’s credit-default insurance payouts to big banks in late 2008.

Recall that the government was in the midst of pouring $180 billion of taxpayer bailout money into AIG at the time – and that company executives were simultaneously getting multimillion-dollar bonuses. It’s not exactly clear why NY Fed officials would actively try to keep things a secret, but it’s plain that they did, judging by an exchange of e-mail messages disclosed Thursday. The SEC was at odds with the decision and the information was released several weeks later, after things had blown over some.

Jan 04

Once More, With Bribery

Posted by Stephen Taub in secregulatorsRegulationforeign corrupt practices actenvironmental social and governanceemerging marketsdisclosuresChinaCFOBusiness practicesAccounting

Stephen Taub

UTStarcom Inc. has run afoul with regulators yet again.

 This time the maker of telecom products agreed to pay $3 million for bribing people in China. Half of the penalty is going to the Department of Justice and the other half to the Securities and Exchange Commission.

Dec 23

Sure, the Fed messed up. But it had a lot of company

Posted by annearf in secregulatorsFederal Reserve


The Washington Post just had a great story describing  years of laissez faire attitude on the part of the Federal Reserve toward regulation, as well as an odd ignorance of the risks banks were taking and just plain incompetence.  A few tidbits:

--In May, 2007, Ben Bernanke said at the annual conference of the Federal Reserve that they had nothing to worry about, even though sub-prime related foreclosures were on the rise. The problem would not hurt the rest of the economy, he said.

Nov 23

SEC turns to derivatives in its insider trading hunt

Posted by MQuinn in secRegulationinsider tradingderivatives


In a statement that feels like it should have been uttered a decade ago, the Securities and Exchange Commission's enforcement director Robert Khuzami said the regulator will focus on financial instruments such as derivatives as it widens its crackdown on insider trading by hedge funds, Bloomberg reported. 

"The days of insider-trading scrutiny being focused almost solely on the equity markets are now gone," Khuzami said on Monday at a legal conference on hedge-fund regulation.

That's an incredible statement since Wall Street has long since extended its interests beyond equity trading. There are many, many ways to make a bet on a company.

Nov 06

Galleon et al: It's 'The Wire' all over again

Posted by kcates in secinsider traderhedge fundsGalleonFBIcompliance


That's some creepy stuff the feds wheeled out on Thursday in their indictment (names here) of 14 more people in the Galleon Group insider-trading scandal.  

It's a tangled and unseemly web prosecutors are describing (the art department at the SEC posts a helpful diagram here).

Oct 15

Man bites watchdog: SEC sued

Posted by RedConn in secJohn Goff


Two victims of the massive Ponzi scheme masterminded by Bernard Madoff want the Securities and Exchange Commission to refund their money.

Phyllis Molchatsky reportedly lost $1.7 million to Madoff. Steven Schneider, a New York doctor, lost about $750,000.

Oct 10

Pushing 'dark pools' into the light

Posted by kcates in secSchapiroKarl Cateshigh-frequency tradingflash tradingdirect-market accessdark poolscomplianceco-location


Now that the SEC has brought the hammer down on flash-traders, it's angling to get rid of dark pools, which are very close cousins to the flash trade.  I believe someone writing on this very site a couple of months ago predicted this eventuality.

Flash-trading is the practice of buying early access to market prices, and the ability to trade on that information ahead of everyone else.   Dark pools are similar in that they allow big-volume traders to do business without publicly displaying prices until after a trade is executed.  This gives a built-in advantage to players who can afford to buy into dark pools (Goldman Sachs, for instance, is what you could call a charter member).

Sep 29

The SEC’s 58 steps to basic competence

Posted by MQuinn in secRegulationMadoff


Fresh on the heels of a scathing report earlier this month which detailed how the Securities and Exchange Commission managed to miss Bernie Madoff's $65 billion Ponzi scheme, SEC Inspector General H. David Kotz is back with 58 steps to reshape the regulator into an enforcement machine. Or at least one that isn't completely inadequate.

In two reports released Tuesday -- one on the SEC's enforcement division and another on the Office of Compliance Inspections and Examinations -- Kotz laid out his recommendations that would "ensure a basic level of competence" at the units.

When talking about the SEC these days, even that may be aiming high.

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