Government Shakedown

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If financial institutions once did finance, now they seem to practice law.   And if regulators once did regulation, now they seem to raise capital. Government seems to be in a shakedown motion. The switch of roles was mostly a consequence of laws such as Dodd-Frank and many others that seem to become an opportunity for regulators to promote their careers, to jump to the private sector and a way to raise funds for the newly created Consumer … [Read more...]

Obama Or Romney: Dodd-Frank Is Here To Stay….But Attitude Will Change

Obama vs. Romney_Dodd-Frank

The pending presidential election has led to a lot of speculation about the future of securities regulation.   But whether President Barack Obama is re-elected or if Mitt Romney wins the White House, Dodd-Frank is here to stay. In the event that President Barack Obama gets a second term, the Dodd Frank reform measure will most likely continue on its slow track of implementation; albeit the financial industry will continue to push back … [Read more...]

Clinton Global Initiative 2012: Where Is The Financial Industry?!

Clinton Global Initiative 2012

I had the privilege of participating in the Annual Meeting of the Clinton Global Initiative last week, and to my eye the financial industry was sorely under-represented. For many attendees the gathering was a very inspirational and emotional experience as it brought together heads of state, Nobel Prize laureates, celebrities, hundreds of leading CEOs, heads of foundations and non-profit groups, major philanthropists, and members of the … [Read more...]

Can JOBS Act Lead To The Next Financial Trouble?

JOBS Act_Financial Crisis

Finra study shows investors lack financial literacy to understand JOBS Act hedge fund advertising provision can lead to next financial crisis. Congress passed the JOBS Act, allowing hedge funds and private equity groups are allowed to advertise their offerings to the general public. While hedge funds are open to individuals who are accredited investors (meet certain net worth criteria), the possibility that a new wave of investors will be … [Read more...]

Banks Find Comfort In Dodd-Frank Loopholes

Banks find comfort in Dodd-Frank

It is not surprising to find loopholes in the Dodd-Frank Act for banks.   But when loopholes allow “collateral transformation”, potential consequences are questionable. As has previously been reported, the Dodd-Frank reforms require derivative deals to be executed on a clearinghouse. This means that traders will need to post collateral while regulators will have a central place to spot risks in the market. However, it seems that … [Read more...]

The Dodd-Frank Whistleblower Program: How Effective Is It?

Under the Dodd-Frank whistleblower program, a whistle blower who helped SEC to stop a multi-million dollar fraud will receive about $50,000.    This is the first reward made under the Dodd-Frank whistleblower program for providing significant information to the SEC that expedited an investigation and prevented fraud. The 2010 Dodd-Frank Act allows SEC to reward individuals who offer high-quality information that leads to the SEC enforcement … [Read more...]

Could Glass-Steagall Act prevent Libor rate scandal?

The Libor scandal solutions are being discussed by the regulators in the US, the UK and the EU. Proposed Libor regulation options include abandoning Libor in its entirety, replacing it by the overnight swap index rate and making rate manipulation a criminal offense. Finally, replacing Libor could invalidate trillions worth of financial contracts that were based on the Libor rate. However, regulators fail to consider revising the structure of … [Read more...]

Is Nomura Insider Trading Scandal a Blow to Japanese Pride?

The Japan insider trading scandal that caused Nomura CEO to resign shows that regulation of the financial markets is a global concern. Given the lingering fallout of the economic crisis of 2008 and recent scandals, the widening case at Nomura scandal reveals that the pressure of the global financial crisis has taken a toll in the Japanese financial system. Japan has always taken pride in having an honest culture and well regulated financial … [Read more...]

Moore Capital Plans to “Go Small”

Hedge fund star Louis Bacon founder of Moore Capital says he will be giving back a large sum of to investors. Of course this is not an altruistic play as it is about the impact the euro zone crisis has had on traders as well as EU leaders’ inability to resolve it one way or another.    In any event, Moore Capital plans to “go small” because Mr. Bacon believes 18 months of disappointing investment returns requires giving back profits … [Read more...]