The American Commodity Futures Trading Commission (CFTC), British Financial Conduct Authority (FCA), and Swiss Financial Market Supervisory Authority (FINMA) announced fines of $3.4 billion against five global banks on Wednesday, November 12th, 2014. The five banks were UBS ($799 million), Citigroup ($668 million), JP Morgan Chase ($662 million), the Royal Bank of Scotland ($634 million), and HSBC ($618 million). Of the total fine, $1.77 billion came from the FCA, $1.475 billion came from the CFTC, and $138 million came from FINMA. All of the banks had set aside funds as reserves ...
The SEC continues to ramp up its Enforcement efforts in the municipal-securities realm. The agency announced a series of settled actions on November 6. First "Control Person" Charge Against Issuer Officials The Commission announced a settled administrative proceeding against municipal issuer Allen Park, Michigan and settlements in federal-court actions against the City's former Mayor and City Administrator. The SEC charged that offering documents for two bond issues knowingly painted too rosy a picture for a $146 million film-studio project, which had been all but ...
Last week the Fifth Circuit weighed in on how inartfully crafted arbitration and forum-selection clauses might trump one another. Together with recent decisions from the Second and Ninth Circuits - each with cert petitions pending - the issue seems poised for Supreme Court determination. Forum-Selection vs Arbitration Pending Supreme Court? The Second and Ninth Circuits held that a subsequent contractual forum-selection clause requiring all disputes to be resolved in a specified federal-court trumps FINRA's base requirement that FINRA member firms must arbitrate upon a ...
The MSRB last week proposed an extension of its gift-limitations Rule G-20 to encompass municipal advisors. The Proposed Rule generally limits gifts in relation to municipal securities or advisory services to $100 per year. The limit excludes normal-course (not excessive) business entertainment or sponsorships, transaction commemoratives, or personal gifts (e.g. birthdays, weddings). Comments on the G-20 proposal are due by December 8 and the MSRB will hold a webinar on the release November 13. See MSRB Reg. Not. 2014-18, here. The MSRB also has proposed amendments extending ...
The SEC last week approved new MSRB Rule G-44 implementing supervision and compliance requirements for municipal advisors. The MSRB touted the Rule as "its first dedicated rule for municipal advisors" under the Dodd-Frank mandate for greater regulation of the nation's municipal-securities markets. See MSRB Reg. Not. 2014-19, here. New Rule G-44 requires Municipal Advisors to follow the same supervision and compliance regime otherwise applicable to registered broker-dealers under FINRA Rules 3110- 3130. It requires, among others: - Written supervisory procedures ...
The drumbeats of discontent grow louder against the SEC's more frequent use of its internal administrative forum for enforcement cases. I wrote about the current spate of Constitutional challenges to the agency's forum in an October 9 Law360 article, A Renewed Fight Over SEC's Admin Forum's Constitutionality, here. The SEC instituted administrative proceedings accusing Canadian Jordan Peixoto of insider-trading in options on shares of Herbalife Ltd. in advance of a hedge fund's announcement of its short position in the stock. See In re Peixoto, Admin. Proc. File No. 3-16184 ...
Since 2004, FINRA has required its member firms to include in settlement-agreement confidentiality clauses an exception expressly allowing a customer to respond to regulatory inquiries. See Notice to Members 04-44. FINRA recently updated that requirement to include express permission to be a whistleblower. FINRA's suggested language provides: Any non-disclosure provision in this agreement does not prohibit or restrict you (or your attorney) from initiating communications directly with, or responding to any inquiry from, or providing testimony before, the SEC, FINRA, any ...