It’s not uncommon for one or a few investors to acquire a large stake in a publicly-traded company in order to either force through or interfere with a proposed merger/acquisition. These investors can, on the one hand, engage in “vote no” campaigns, which can lead to large pay-outs (in the form of better terms for […]
“Poison Pills” a Plausible Legal Solution for Dealing with External Activist Investors in Proposed Mergers/Acquisitions
Bernanke Testifies on Fed’s Commitment to Implementing Dodd-Frank
In a statement before the Committee on Banking, Housing, and Urban Affairs, Ben Bernanke reaffirmed the Federal Reserve’s commitment to working with financial regulatory agencies to implement Dodd-Frank – more than 50 rulemakings and formal guidelines. According to Bernanke’s statement, the Fed has more than 300 staff members working on implementation projects, and the transfer […]
Open Season: Dodd-Frank’s Whistleblower Bounty Provision
In the wake of financial collapse and corporate scandal, Congress acted to create incentives for employees to report securities fraud to the Securities and Exchange Commission. Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act aims to do just that. This section, also referred to as the “whistleblower bounty” provision, amends the […]
National Mortgage Servicing Standards and Looming Litigation
When the Obama Administration released the Treasury’s white paper to propose reforms to the national housing finance market, it also called for the establishment of national standards for mortgage servicing. The paper put forth a set of basic proposals to reform mortgage servicing and foreclosure processing practices but stopped short of comprehensive and detailed solutions. […]
The $13 Billion Dollar Question: How Will the Proposed Interchange Fee Rules Work?
When the Federal Reserve released its proposed rule (Regulation II) implementing Section 1075 of the Dodd-Frank Act (DFA) on Debit-Card Interchange Fees and Routing, it unleashed a firestorm of comments from the banking industry opposing the rule. Some have estimated that the new regulations would reduce banks’ income from fees by $13 billion. Last week, […]
Has Sarbanes-Oxley Reduced IPOs?
The Sarbanes-Oxley Act was enacted in 2002, setting higher standards for all U.S. public company board, management and public accounting firms. The Act mandated reforms to enhance financial disclosures and corporate responsibility. Since the enactment of Sarbanes-Oxley, a debate has ensued about whether or not overregulation has deterred foreign companies from listing in the United […]
SEC Issues Final Say-On-Pay Rules
On January 25, 2011, the Securities and Exchange Commission (SEC) officially adopted final rules implementing Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This so-called “Say-on-Pay” provision establishes three new shareholder-voting requirements for large companies subject to federal proxy rules. First, such companies must provide shareholders with a non-binding vote on […]
Dodd-Frank Requires Removal of References to Credit Rating Agencies from Federal Regulations
Section 939A of the Dodd-Frank Act requires federal agencies to remove references to credit rating agencies (such as Moody’s Standard and Poor’s) from existing regulations and replace them with other appropriate standards for the calculation/measurement of risk. The rule stems from one of the perceived problems that led to the financial crisis: over-reliance on credit-rating […]
Bigger than Fannie and Freddie: Defining Qualifying Residential Mortgages
A prominent feature of the Dodd-Frank Act is the risk-retention provision in Title IX (Subtitle D, § 941). It requires banks that originate mortgages to retain 5 percent of the credit risk in their portfolios. The risk-retention requirement was created in direct response to the oft-cited lending practice that contributed to the housing bubble where […]