Rise in Global Mergers

Several reports have shown greater activity in global M&A deals since the start of 2014. Many large transactions have driven M&A “activity up by 54 percent in the first quarter compared to the same period last year, reflecting greater deal-making confidence among chief executives.”

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SEC Adopts Security-Based Swap Cross-Border Definitional Rule

On June 25, the SEC adopted the first in a series of rules governing the cross-border reach of its security-based swap regulatory regime. The rules define the term “U.S. person” and provide the test for counting cross-border security-based swap transactions to determine whether a firm must register as a security-based swap dealer or a major security-based swap participant. The final rules also provide a process by which market participants or non-U.S. regulators can request that the SEC make a determination that a foreign regime’s security-based swap rules are comparable to the SEC’s, thereby permitting market participants in that jurisdiction to meet SEC rules through compliance with local law. Finally, the rules provide clarification of the SEC’s view of the cross-border application of its anti-fraud authority for all securities.

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Supreme Court Clarifies Federal Bank Fraud Statute in Loughrin v. United States

On June 30, 2014, the U.S. Supreme Court issued its final opinions and concluded its 2013-2014 term.  Among the Court’s recently decided cases is Loughrin v. United States, where the Court clarified that Section 1344(2) of the federal bank fraud statute does not require intent to defraud.[i]  The Court’s decision impacts federal bank fraud prosecutions, but may also impact bank compliance personnel and in-house counsel.

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French Global Bank BNP Paribas Admits Guilt and Agrees to Pay $8.9 Billion Fine to U.S.

On Monday U.S. state and federal authorities announced a criminal case against France’s BNP Paribas, which has pleaded guilty to several U.S. sanction violations. According to the Justice Department, BNP concealed billions of dollars in transactions for clients in Cuba, Iran, and Sudan and has agreed to pay $8.9 billion in fines.

The agreement by the French bank to plead guilty is the first time that a global bank has agreed to plead guilty to large-scale violations of U.S. economic sanctions. Along with the monetary penalty that BNP must pay, the settlement includes a temporary ban on dollar-clearing transactions and the cutting of ties with some employees.

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USSC Decides Securities Fraud Class Action Case

In Halliburton Co. v. Erica P. John Fund, Inc., the Supreme Court decided a much-awaited case regarding the ability of investors to file a class action suit against a company for fraud. The Court held that “investors can recover damages in a private securities fraud action only if they prove that they relied on the defendant’s misrepresentation in deciding to buy or sell a company’s stock.”

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Is the DOJ FCPA Enforcement Hegemony Dead?

For nearly 15 years, the United States has had the worldwide corruption enforcement stage to itself, reaping billions of dollars in fines and settlement payments from companies that have acknowledged engaging in bribery in foreign countries. That monopoly, however, may soon end. In a report entitled Left Out of the Bargain, the World Bank recently observed that “the country of enforcement was different from the country where the official was bribed or allegedly bribed” and that the country of enforcement has rarely shared its financial recoveries with the countries where the corruption occurred. Motivated by the potential financial recovery in a time where governments are struggling financially and aware of the financial benefit the U.S. has gained from corruption abroad, we believe that countries that have largely ignored corruption enforcement may become more active. As a result, companies may face additional punishment as multiple sovereigns pursue penalties for the same conduct.

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Is the House of Representatives Above the Law? A Look at the House Resisting the SEC’s Insider Trading Inquiry

We all expect (or, at the very least, should expect) our elected officials in Congress to follow the laws that they impose on the public, prohibitions on insider trading included.  A recent investigation by the Securities and Exchange Commission (“SEC”) into suspicious trades on Capitol Hill show that the House of Representatives (the “House”) may not agree, finding themselves to be above the laws that they create.

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