Wall Street – Overlawyered

Wealth registries and exit taxes

Walter Olson — Thu, 26 Sep 2019 10:01:36 +0000

Not scary or intrusive at all: presidential candidate Sen. Bernie Sanders (I-Vt.) has called for enacting a “national wealth registry,” the better to enforce future schemes of taxation, confiscation, and restraints on expatriation [Brittany De Lea, Fox Business; related, Chris Edwards, Cato; Emily Ekins on opinion poll] And the steep “exit tax” that Sen. Elizabeth Warren (D-Mass.) and Sanders propose to slap on wealthy individuals who depart the U.S., of up to 40 and 60 percent respectively, did not sound better in the original German [Ira Stoll; earlier]

P.S.: On the constitutionality angle, note that the Competitive Enterprise Institute has just filed a lawsuit on behalf of a couple challenging the constitutionality of a provision of the 2017 tax reform law known as the Mandatory Repatriation Tax. Counsel Andrew Grossman, quoted in the CEI press release, stated:

The Mandatory Repatriation Tax is unconstitutional for the same reason that a wealth tax would be. The Constitution does not permit Congress to simply declare money that it wants to tax to be income and then demand its cut. And the courts have never permitted retroactive taxation reaching back anywhere near the 30 years, as the Mandatory Repatriation Tax does. The details of the tax may be complicated, but the constitutional violations are clear.

Tags: Bernie Sanders, Elizabeth Warren, FATCA, taxes, Wall Street

Wealth registries and exit taxes is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Sun, 08 Sep 2019 15:58:44 +0000

Neat trick: banks can get Community Reinvestment Act credit for lending in “low-income census tracts” even when that means extending $800K mortgages to gentrifiers [Diego Zuluaga, Politico, related policy analysis and Cato podcast]
Sen. Elizabeth Warren has a plan to regulate private equity. It’s not good [Steven Bainbridge] When you’ve lost veteran liberal columnist Steven Pearlstein… [Washington Post]
Speaking of terms with ugly histories, maybe it’s time for Sens. Warren and Sanders to retire the metaphor of the financial sector as vampires or “vultures” engaged in “sucking” or “bleeding” [Ira Stoll, related]
Volume of securities litigation is on sharp upswing, policy remedies needed [Kevin LaCroix/D&O Diary and more, Chubb “Rising Tide” report] Rising in Australia too [Nicola Middlemiss, Insurance Business Australia]
Unconstitutionality of CFPB structure hasn’t gone away and neither has the need for the Supreme Court to tackle the issue [Ilya Shapiro on Cato certiorari amicus brief in Seila Law LLC v. CFPB] Appointment process for Puerto Rico financial oversight board under PROMESA law is of doubtful constitutionality [Shapiro on Cato amicus brief in Financial Oversight & Management Board for Puerto Rico v. Aurelius Investment, LLC]
In an age of professional consultants, why does the law continue to require corporate governance to be delivered by way of individual board members? Firms specializing in board services could offer attractive alternative [Todd Henderson, Charles Elson, Stephen Bainbridge, Federalist Society Forum]

Tags: Australia, banks, Bernie Sanders, CFPB, corporate governance, Elizabeth Warren, securities litigation, Wall Street

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Fri, 12 Oct 2018 09:58:51 +0000

“California’s Unconstitutional Gender Quotas for Corporate Boards” [Ilya Somin, Stephen Bainbridge, Jerome Woehrle, Ann Althouse]
Useful tool, or abuse of power? “Leveraging allows regulators to use their gatekeeping authority to secure concessions that they might not be able to achieve otherwise—and to do so quickly and cheaply.” [William Kovacic and David Hyman, Cato Regulation magazine]
The conflict minerals law fiasco: “between 2010 and 2012, the monthly incidence of battles, looting and violence against civilians strongly increased in the mining areas targeted by Dodd-Frank” [Nik Stoop, Marijke Verpoorten and Peter van der Windt, Washington Post “Monkey Cage”, Dominic Parker, PERC (summarizing two recent studies), my earlier]
“Return of Bill Lerach: Disbarred attorney consults on case alleging hedge funds mismanaged Kentucky pensions” [ABA Journal]
“The Politics of Pay: The Unintended Consequences of Regulating Executive Compensation” [Kevin J. Murphy and Michael C. Jensen, Cato Institute Research Briefs in Economic Policy series]
“Increasingly, our [financial] regulatory structure has been adopting processes that are inconsistent with adherence to the rule of law.” What to do? [Charles Calomiris, Cato Journal]

Tags: Africa, banks, Bill Lerach, California, corporate governance, regulatory retaliation, rule of law, Wall Street

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Fri, 03 Aug 2018 10:03:37 +0000

“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]

Tags: CFPB, Dodd-Frank, Securities and Exchange Commission, Wall Street, whistleblowers

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Playing politics with pensions

Walter Olson — Sun, 15 Apr 2018 16:01:12 +0000

A mini-roundup: “How State Pension Funds — and 401k Managers — Prioritize Politics over Returns” [Ike Brannon, Cato/Forbes.com, more; related, Eric V. Schlecht, Economics 21] “The California state teacher retirement system open letter to Apple about ‘smartphone addiction’ provides another point in favor of giving these workers individual accounts with a private provider.” [Caleb Brown on Twitter] “Those shares belong to the college savers, not him”: Illinois treasurer uses 529 funds to push Facebook, other firms on political issues [Cole Lauterbach, Illinois News Network]

And as to scale and solvency: “A $76,000 Monthly Pension: Why States and Cities Are Short on Cash” [Mary Williams Walsh, New York Times on strains in Oregon]; Eric Boehm, Reason.

Tags: Apple, California, cellphones, colleges and universities, Illinois, Oregon, Wall Street

Playing politics with pensions is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Fri, 20 Oct 2017 10:10:28 +0000

Sources: Treasury intelligence division has unlawfully spied on and collected Americans’ private financial information [Jason Leopold and Jessica Garrison, BuzzFeed]
“A majority of Americans oppose the idea of regulating CEO pay.” [Thaya Brook Knight, IBD]
“Senate should vacate the harmful consumer banking arbitration rule” [Keith Noreika (acting U.S. Comptroller of the Currency), The Hill]
“Derivative litigation mainly serves as a means of transferring wealth from investors to lawyers.” Is there a case for abolishing it? [Stephen Bainbridge]
U.S. government files false affidavit, stages splashy raid, destroys business. Tough luck apparently [Ira Stoll on Second Circuit finding of qualified immunity for prosecutors in David Ganek case]
“Look in the Mirror: Why the Number of Public Companies & IPOs are in Decline” [Patrick A. Reardon, CrowdFund Insider]

Tags: arbitration, CFPB, prosecution, securities litigation, surveillance, Wall Street

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Tue, 22 Aug 2017 04:05:43 +0000

“Unintended Consequences of Military Lending Act Hurt Some Families” [R.J. Lehmann]
Tenth Circuit: Fed must provide all depository institutiona access to the clearing system, whether they serve marijuana businesses or any other kind [George Selgin, Cato]
“Moneylending has been taboo for most of human history. So how did usury stop being a sin and become respectable finance?” [Alex Mayyasi, Aeon]
Financial regulation: too many cooks in the compliance kitchen [Cato Daily Podcast with Thaya Brook Knight and Caleb Brown] “DOL Fiduciary Rule: It’s Not Always Fun to be Right” [Knight]
“2016 was an unprecedented year in securities class actions filings.” [Baker Hostetler, JD Supra]
Trusts and the offshore wealth trade: from Edmund Burke to the Cayman Islands [Graham McAleer, Law and Liberty]

Tags: banks, debtor-creditor law, securities litigation, Wall Street, wills and trusts

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Fri, 14 Apr 2017 10:01:43 +0000

“The real-world impact of Dodd-Frank, stress tests and other regs” [M&T Bank slideshow, American Banker] “Six feet of new mortgage regulations help explain slower housing market” [Ira Stoll]
Will Trump administration allow banking for cannabis-related businesses? [Kevin Funnell]
“‘Sustainability Standards’ Open A Pandora’s Box Of Politically Correct Accounting” [Howard Husock and Jim Copland]
An assumption of complete transparency would take away “the reason for financial intermediation in the first place” [Arnold Kling]
Statutes of repose in securities actions are important in protecting interests on both sides [WLF on CalPERS v. ANZ Securities, Inc.]
Encrypted messaging services allow Wall Streeters to bypass all sorts of regulatory scrutiny and speak freely, can’t have that [Bloomberg]

Tags: accounting, Dodd-Frank, mortgages, securities litigation, Wall Street

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Mon, 27 Feb 2017 11:03:29 +0000

Judge Neil Gorsuch on securities litigation and related issues of agency deference [Paul Weiss attorneys at D & O Diary]
New York attorney general’s office pursued Hank Greenberg for years, wound up settling for $9 million and this lousy t-shirt [WSJ editorial]
Exit tax and FATCA: “America charges $2,350 to hand in your passport, a fee that is more than twenty times the average of other high-income countries.” [Robert Wood, Forbes]
“Overgrown Wall Street regulation needs a trim in 2017” [Thaya Brook Knight, The Hill] Last-minute Obama regs encourage shareholder activism [Stephen Bainbridge]
Organized push to restrict use of cash includes some idealists, some economists, quite a few tax- or rent-seekers [Lawrence White/Cato, David Henderson (did USAID push India?), Stephen Williamson via Henderson]
U.S. regulatory environment threatens the rise of fintech [Nikolai Kuznetsov, TechCrunch]

Tags: banks, Eric Schneiderman, FATCA, Neil Gorsuch, securities litigation, Wall Street

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system

Banking and finance roundup

Walter Olson — Fri, 27 Jan 2017 11:13:12 +0000

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]

Tags: Andrew Cuomo, Elizabeth Warren, India, mortgages, Securities and Exchange Commission, Wall Street

Banking and finance roundup is a post from Overlawyered - Chronicling the high cost of our legal system