Your husband commits insider trading — Now what?

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  There could be a bull market for divorce lawyers from marriages falling apart due to financial fraud or insider trading by a husband or wife.  Most of the time the husband is the one committing fraud and the wife is either a victim or left with damages or even both. New York is now a no-fault state for divorce. The wife of a husband who has committed insider trading can move forward to end the marriage based on no fault … [Read more...]

New Light for Consumer Financial Protection Bureau

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The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans. One of the key elements of the U.S. Securities and Exchange Commission’s (SEC) mission is to protect investors. Now, the SEC has a new chief, and her background and track record could lead to a clash between the missions of these two “protective” agencies. Goal #1 of the CFPB is to … [Read more...]

What To Expect From The SEC In 2013

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       On February 21, the  Securities Exchange and Commission (the "SEC")    published its examination priorities for 2013 and shed some light as to what to expect from the SEC in 2013.Carlo V. di Florio, Director of the SEC’s Office of Compliance Inspections and Examinations, stated that the purpose of the 2013 priorities were to “promote compliance and communicate with investors and our registrants about areas that we perceive to … [Read more...]

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...]

Compensating Executives by Insider Trading? And it is Legal.

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With much spot light focused on insider trading and excessive executive compensation received at times of recession, investment programs under Rule 10b5-1 receive little attention. Investment plans under Rule 10b5-1 were established to prevent insider trading and protect the securities markets but instead have been used to enhance executive compensation.   Like options, which in theory were supposed to tie management pay to stock performance, … [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...]

OTC Swap Rules May Come Soon

The SEC unveiled a plan last week to phase in new rules governing OTC swaps. It has been reported that the plan was delayed in part due to the complexity of the rules.   Moreover, the financial industry pushed back to slow the process mostly because it will need time to develop internal controls to adhere to the rules. In sum, the SEC’s policy statement establishes a timeline for creating new oversight of $700 trillion market and one … [Read more...]

Weaknesses in the US Regulation of Derivatives


President Obama's new proposal aimed to regulate derivatives has some major flaws.  The proposal stops short of creating a fully transparent market. Derivatives are financial products that supposed to help investors manage risks, like the possibility of default or of interest-rate swings.    They are virtually hidden from investors, analysts and regulators. They do not trade openly on public exchanges and have very few other … [Read more...]