Posts Tagged ‘Securities and Exchange Commission’

Good riddance (if they’re indeed going) to the Dodd-Frank conflict minerals rules

President Trump is said to be considering an executive order suspending for a time the Dodd-Frank law’s provisions on conflict minerals, which have harmed American companies and consumers and also plunged many communities further into impoverishment in some of the poorest sections of Africa. Congress should rise to its part by repealing the provisions, I argue at Cato at Liberty. More: Hans Bader/CEI, Kevin Drum/Mother Jones, earlier, and as part of a wider look at securities regulation, Wallace DeWitt/National Affairs. More: Dominic P. Parker and Bryan Vadheim, JAERE; Tate Watkins, WSJ.

Banking and finance roundup

  • SEC in-house administrative law judges are unconstitutional, rules 10th Circuit, creating circuit split [ABA Journal, Jonathan Adler]
  • “Dear Sen. Warren: If we care to share our policy views, we’ll let you know. Otherwise MYOB. Signed – 33 firms” [Elizabeth Warren letter demanding to know what financial firms think of delay in Labor Department fiduciary rule, coverage WSJ/MarketWatch]
  • New York Gov. Andrew Cuomo’s grab for more regulatory power over financial institutions would erode due process protections [New York Post quoting Mark Calabria]
  • “Supreme Court Probes Whether Miami Can Sue Banks Over Foreclosure Crisis” [Daniel Fisher, earlier on Bank of America v. Miami here, etc.] Arnold Kling’s prescriptions for getting the government out of the mortgage market;
  • Mini-symposium on the personal benefit standard for insider trading in the recent Supreme Court case of Salman v. U.S. [Bainbridge]
  • India’s devastating crackdown on cash [Cato Daily Podcast with Jim Dorn and Caleb Brown]

To head SEC, Trump picks a FCPA critic

Jay Clayton of Sullivan & Cromwell, president-elect Donald Trump’s choice to head the Securities and Exchange Commission, has not taken a high-profile role in policy debates but according to MarketWatch was involved in preparing a 2011 report for the New York City Bar critical of enforcement of the Foreign Corrupt Practices Act (FCPA). That’s a point in his favor, I argue at Cato, since the case against zealous FCPA enforcement is well established. Related earlier, and Texas Public Policy Foundation 2014. More: Andrew Ramonas, BNA Bloomberg.

Sorry, your cellphone game violates Dodd-Frank

The Securities and Exchange Commission has settled an enforcement action against Forcerank, LLC, a provider of a mobile phone game that enables players to engage in fantasy stock trading for a small charge, much of which was refunded to players in the form of prizes for successful predictions. The SEC takes the position that the transactions involved, however small, fall into the class of swaps and derivatives that, under Dodd-Frank, cannot be offered to the public except under intensively regulated conditions. [Stephen Quinlivan]

Banking and finance roundup

“Administrative Law Judges Are Unconstitutional”

Administrative law judges are executive-branch as distinct from judicial officers, yet the President has no power to remove them; at the Securities and Exchange Commission and many other federal agencies, they are themselves employed by the agency on whose enforcement cases they must render quasi-judicial rulings. In recent years federal judges have expressed unease about whether assigning ALJs this particular combination of adjudicatory powers and institutional affiliations is entirely consistent with the U.S. Constitution, and now a Cato Institute amicus brief, in the D.C. Circuit case of Timbervest LLC v. Securities and Exchange Commission, urges courts to take the next logical step and rule that it is not. [Ilya Shapiro and Thaya Brook Knight; earlier here, here, here here, etc.]

Banking and finance roundup

  • To keep your sex business free from the coils of federal regulation, your best bet might in fact be Ted Cruz, implacable opponent of Operation Choke Point [Elizabeth Nolan Brown; more from Snopes on rather silly attacks on Cruz for doing job lawyers are expected to do for clients in Texas case]
  • Snoopy, you’re not systematically important: judge frees MetLife from SIFI designation under Dodd-Frank [Thaya Brook Knight/Cato, John Cochrane]
  • What with Sen. Elizabeth Warren trying to put a lid on some companies’ criticism of the Labor Department’s fiduciary rule, hope it’s still OK for the rest of us to talk about it [Thaya Brook Knight, Cato]
  • Sen. Warren isn’t only one using letters to SEC to browbeat businesses: New York City elected Public Advocate Letitia (“Tish”) James tries to hassle gunmaker Sturm Ruger to comply with various demands of gun control advocates [Manikandan Raman, Benzinga/Yahoo; more on Ms. James and her blames]
  • Next term Supreme Court will consider case on scope of insider trading law, Salman v. U.S. [Ira Stoll, more] “Returning to Common-Law Principles of Insider Trading After United States v. Newman” [Richard Epstein, Yale Law Journal on Second Circuit’s decision via Stoll]
  • DoJ cracks down on big-investor activism — at least when of a sort antitrust enforcers don’t like [Matt Levine]

A hold-up of SEC nominees

You mean getting to a floor vote so that sensitive vacancies can be filled isn’t these senators’ top priority after all? Sen. Chuck Schumer and allies are holding up two presidential nominations to the Securities and Exchange Commission, those of Democrat Lisa Fairfax and Republican Hester Peirce, demanding that the nominees commit to supporting a scheme to force shareholder-held companies to disclose their political involvements, the better for adversaries to pressure them or retaliate. It flies in the face of the idea that the appropriate frame of mind for commissioners approaching the rulemaking process is to keep an open mind rather than promise to vote one way or the other [Stephen Bainbridge, Broc Romanek/Corporate Counsel, Marc Hodak] “The SEC is now down to just three members, two less than its full complement, after two left the agency late last year. If the SEC remains with only three members for a prolonged period, it could be difficult for Chairman Mary Jo White to advance her agenda in what is likely her final year at the markets regulator.” [Andrew Ackerman, WSJ] More: WSJ letters via Prof. Bainbridge; Washington Post editorial.

Banking and finance roundup

  • Federal judge refuses to dismiss suit against prosecutor Preet Bharara, FBI agents by hedge funder David Ganek over treatment in now-dismissed Chiasson inside trading case [Peter Henning, New York Times “DealBook”; Business Insider] SEC agrees to return $21.5 million extracted from Ganek’s Level Global Investors [BNA via Ira Stoll]
  • CFPB follies: “Government-Directed Lending Comes to America” [Ike Brannon, Cato] Agency casts its eye on marketplace, otherwise known as peer-to-peer, lending [Thaya Brook Knight, Cato]
  • SEC inspector general sides with agency against allegations of undue sway over ALJs [Reuters, earlier here, here, etc.]
  • Third party liability for crime: “HSBC Sued Over Drug Cartel Murders After Laundering Probe” [Bloomberg]
  • Former Ally Bank CEO: administration extorted race-lending settlement by threatening to derail regulatory approvals [Paul Sperry/New York Post, more]
  • Bellevue, Wash.: $213,000 award to complainant Leticia Lucero “could mean other cases where homeowners argue lenders [cause] emotional distress during negotiations.” [AP/Yakima Herald]

Banking and finance roundup