Posts Tagged ‘Securities and Exchange Commission’

Banking and finance roundup

March 6 roundup

  • A longtime progressive objects to the diversity pledge (applying to personal and professional lives alike) soon to be expected of Ontario lawyers and paralegals as a condition of their licenses [Murray Klippenstein with Bruce Pardy, Quillette]
  • More on Cato’s First Amendment challenge to SEC gag-order settlements [Cato Daily Podcast with Clark Neily, Robert McNamara, and Caleb Brown]
  • “Federal judge sanctions lead lawyer in Roundup trial for opening statement ‘misconduct'” [Debra Cassens Weiss, ABA Journal]
  • Unanimous high court (Sotomayor concurring in judgment) rules Ninth Circuit may not count Judge Stephen Reinhardt’s vote in decisions issued after his decease: “Federal Judges Are Appointed for Life, Not for Eternity” [Eugene Volokh]
  • Copyright law firm has “a pattern of making aggressive and, in many cases, unsupportable demands” for payment [Paul Levy, CL&P]
  • “Genealogists shouldn’t have to become technophobes,” yet to spit in a cup is now to enter oneself and one’s relatives intoto a genetic panopticon for the benefit of law enforcement [Matthew Feeney, Real Clear Policy]

Cato challenges SEC gag-order settlements

When the Securities and Exchange Commission settles with defendants, it extracts gag orders forbidding them forever after from making or causing to be made “any public statement denying, directly or indirectly, any allegation in the complaint.” We noted that fact briefly in yesterday’s roundup adding the question: Is it constitutional for the government to do that?

It isn’t according to the Cato Institute, which wants to publish as a book a businessman’s personal memoir telling his side of the story about his legal battles with the SEC, but cannot do so given that he consented to a settlement containing the gag order. Cato, represented by the Institute for Justice, has now filed suit seeking a court determination that the government cannot use gag orders in settlements to silence those it accuses of wrongdoing. [Clark Neily, Cato at Liberty]

IJ’s press release about the case has fun with redaction:

January 9 roundup

  • Maker of Steinway pianos threatens legal action against owners who advertise existing instruments for sale as used Steinways if they contain other-than-factory replacement parts [Park Avenue Pianos]
  • When the Securities and Exchange Commission settles with defendants, it extracts gag orders forbidding them to talk about the experience. Is it constitutional for the government to do that? [Peggy Little, New Civil Liberties Alliance/WSJ] Update: Cato is suing about this on behalf of former businessman who wants to write book about his experience in court against the SEC [Clark Neily]
  • Judge preliminarily enjoins New York City ordinance requiring home-sharing platforms like AirBnB to turn over to authorities “breathtaking” volume of data about users [SDNY Blog]
  • U.S. Chamber’s top ten bad lawsuits of 2018 [Faces of Lawsuit Abuse] “The Most Important Class Action Decisions of 2018 and a Quick Look at What’s to Come” [R. Locke Beatty & Laura Lange, McGuire Woods]
  • “Small aircraft engines are much less reliable than automobile engines. Why? Well, they all must be FAA certified, and it’s not worth the cost to certify, say, a new model of spark plug.” [John Cochrane, who gives HIPAA and military examples too]
  • “Why logos and art are sometimes blurred on reality TV shows” [Andy Dehnart, Reality Blurred, 2017]

Elizabeth Warren’s proposals on business organization

Schemes like a government mandate of worker representation on corporate boards (an element of German “co-determination”) are not new, and scholars have studied their track record in Europe for years. In particular, they tend not to provide robust incentives for risk-taking and dynamism; that’s aside from their interference with the contractual liberty of all parties to adopt alternative governance methods agreed to by all parties. I talk with Cato’s Caleb Brown about that and Massachusetts Senator Elizabeth Warren’s other ideas for revamping how large companies are run. Earlier here and here.

Banking and finance roundup

  • “State-run retirement plans are the wrong way to protect the poor” [Andrew G. Biggs, AEI]
  • Fifth Circuit panel: Federal Housing Finance Agency (FHFA) “is unconstitutionally structured and violates the separation of powers” [Jonathan Adler] Unconstitutional structure afflicts Consumer Finance Protection Bureau too [Ilya Shapiro on Cato amicus brief in Fifth Circuit case of CFPB v. All American Check Cashing, earlier here, etc.]
  • Study: financial advisers in Canada who are not subject to fiduciary duty have personal investments similar to their clients [Peter Van Doren]
  • Regulation can have a lulling effect. Might it even breed financial illiteracy? [Diego Zuluaga, Cato]
  • “As I predicted, the ratchet effect is going to save Dodd-Frank. Sigh.” [Bainbridge]
  • “SEC proposes to limit whistleblower awards” [Francine McKenna, MarketWatch]

Banking and finance roundup

Keeping an overdue appointment with the Appointments Clause

Caleb Brown interviews Trevor Burrus and me for the Cato Daily Podcast on Lucia v. SEC, Thursday’s Supreme Court case on the Appointments Clause and administrative law. Crossing to join with the conservatives, Justice Elena Kagan wrote a narrowly tailored opinion invalidating the method by which the Securities and Exchange Commission had appointed its five administrative law judges at the time of the dispute (it has since fixed its appointment method). The majority opinion carefully sidesteps the issue of how ALJs may properly be removed; Justice Breyer, who largely concurred with the result on separate grounds, explored some of those issues in his opinion. See also Ilya Shapiro on June 21 as “government structure day” at the Supreme Court, and with more on the merits. Related: Federalist Society forum on Michael Rappaport proposal for replacement of ALJs with Article III judges.

Banking and finance roundup

  • High cross-border remittance costs for globally mobile workers slow ascent from poverty, and know-your-customer and money-laundering regulations have made things worse [Money and Banking]
  • “The Supreme Court should find ALJs to be ‘officers of the United States’ and thus make them subject to presidential appointment and removal.” [Ilya Shapiro on Cato merits amicus filing in Lucia v. Securities and Exchange Commission]
  • “Settlement of Lawyer-Driven ‘Merger Tax’ Litigation Stumbles in New York” [Greg Herbers, WLF]
  • “Financial Regulation: The Apotheosis of the Administrative State?” 2017 National Lawyers Convention Federalist Society panel with Richard Epstein, Hal Scott, Peter Wallison, and Arthur Wilmarth, moderated by Judge Carlos Bea;
  • With advances in Oregon and even California, deregulation of commercial insurance lines is having a moment [Ray Lehmann, Insurance Journal; Lehmann’s 2017 Insurance Regulation Report Card for R Street Institute] Perennially troubled Massachusetts, on the other hand, continues slide in same survey [Agency Checklists]
  • Tech companies have been experimenting with old and lawful device of dual class stock and SEC shouldn’t be allowed to use raised eyebrow power to stop that [Bainbridge, WLF]