[Editor’s Note: The following update is authored by Kirkland & Ellis LLP]
The Foreign Account Tax Compliance Act (FATCA), enacted in 2010, imposed burdensome federal income tax reporting and withholding obligations on many business enterprises (including private funds and their portfolio companies), intended to prevent U.S. citizens and residents from avoiding U.S. income tax by hiding ownership of U.S. assets overseas. (more…)
Recently the SEC charged a Texas man with defrauding investors in a Ponzi scheme involving Bitcoin, a peer-to-peer payments system that allows people to pay each other from virtual accounts.
According to the SEC complaint, 30-year-old Trendon T. Shavers operated a sham investment scheme called Bitcoin Savings and Trust, or BTCST, based on promises to investors of weekly returns of up to 7 percent.
Using the monikers “Pirate” and “pirateat40,” Shavers allegedly raised a total of 700,000 Bitcoin in 2011 and 2012, then worth about $4.5 million, through his scheme. Today, the SEC says the value of 700,000 Bitcoin exceeds $60 million. (more…)
[Editor’s Note: The following post is authored by Arnold & Porter LLP]
On July 10, 2013, the Securities and Exchange Commission (SEC) adopted final rules (Final Rules) eliminating the ban on general solicitation and general advertising for private securities offerings under Rule 506 of Regulation D under the Securities Act (Regulation D) and Rule 144A under the Securities Act (Rule 144A). The Final Rules also make Rule 506 unavailable for offerings if the issuer or any related “covered person” is a “bad actor” (i.e., has engaged in a “disqualifying event”). The adoption of these rules by the SEC was required under Section 201(a) of the Jumpstart Our Business Startups Act (JOBS Act) and Section 926 of the Dodd- Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), respectively. The Final Rules will go into effect 60 days after publication in the Federal Register. (more…)
Yesterday a hearing was held to determine whether the House and Senate Agriculture committees will re-authorize the Commodity Futures Trading Commission (CFTC). The hearing is one in a series of reauthorization hearings scheduled to occur every five years. The biggest complaint is that the CFTC is behind schedule on implementing Dodd-Frank rules. Specifically, commissioners cited problems with the issuance of no-action letters and the confusion surrounding swap dealer definitions. (more…)
[Editor’s Note: The following update is authored by Davis Polk & Wardwell LLP]
On 23 July 2013, The Stock Exchange of Hong Kong Limited released a large number of amendments to the Rules Governing the Listing of Securities on the Exchange, revised checklists, guidance materials and templates. Subject to certain transitional provisions, these materials will come into effect on the same date, 1 October 2013, as the amendments to various guidelines and codes released by the Securities and Futures Commission (the “SFC”) in December last year. Together, they will implement the new regulatory regime for sponsors in a listing application or initial public offer (“IPO”) conducted in Hong Kong. (more…)
The CFTC has announced charges against New Jersey-based Panther Energy Trading and its principal, Michael Corsica, for “spoofing” markets in crude oil, natural gas, and other commodities such as wheat, soybean and corn. Panther Energy and Corsica agreed to pay a $1.4 million fine, return $1.4 million in ill-gotten gains, and stop trading for a year as part of the settlement.
The U.K.’s Financial Conduct Authority also announced it has fined Corsica more than $900,000 for alleged manipulation of commodities markets.
The charges mark commodities regulators’ first case using new enforcement powers granted under the Dodd-Frank financial law against spoofing. The 2010 law overhauled market oversight after largely unregulated trades helped fuel the 2008 credit crisis. (more…)
[Editor’s Note: The following update is authored by Davis Polk & Wardwell LLP]
On the heels of publishing the U.S. Basel III final rule, the U.S. banking agencies have proposed higher leverage capital requirements for the eight U.S. bank holding companies that have been identified as global systemically important banks (“Covered BHCs”) and their insured depository institution (“IDI”) subsidiaries. The higher leverage capital requirements, which we are calling the American Add-on, build upon the minimum Basel III supplementary leverage ratio in the U.S. Basel III final rule. (more…)
This month the FDIC Board of Directors approved the Regulatory Capital Interim Final Rule. The final rule implements a revised definition of regulatory capital, a new common equity tier 1 minimum capital requirement, a higher minimum tier 1 capital requirement, and, for FDIC-supervised institutions subject to the advanced approaches risk-based capital rules, a supplementary leverage ratio that incorporates a broader set of exposures in the denominator. It goes into effect January 1, 20104. (more…)
[Editor’s Note: The following post is authored by Ropes & Gray LLP]
Last week the Board of the Privy Council delivered a critical sequel to its previous judgments in connection with the Cukurova Group’s attempt to recover shares following an appropriation. The Board held that not only can the court reopen an appropriation and exercise its jurisdiction to grant relief from forfeiture after the event, as per its decision earlier this year, but it can also exercise its jurisdiction to determine the basis and conditions of such relief.
For mortgagors and borrowers in secured transactions, the decision provides a helpful guide as to the breadth and flexibility of equity’s ability, after forfeiture, to intervene in their favour and adjust the contractual terms where it would be unconscionable to enforce them strictly. (more…)
[Editor’s Note: The following post is authored by Kirkland & Ellis LLP]
As discussed in previous PENs, the SEC’s rules governing the sale of unregistered securities by a private “issuer” — including a private fund and a “newco” formed to purchase or invest in a target — have for many years prohibited the issuer from engaging in general solicitation of or general advertising for investors. (more…)