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…)
The Hong Kong Stock Exchange Releases Revised Rules and Procedures to Implement New IPO Sponsor Regime
[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…)
CFTC Uses New Powers to Charge High-Speed Trader
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…)
Basel III Leverage Ratio: U.S. Proposes American Add-on; Basel Committee Proposes Important Denominator Changes
[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…)
FDIC Approves Regulatory Capital Interim Final Rule
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…)
Privy Council Rules on the Court’s Equitable Jurisdiction to Set the Financial Terms of Relief against Appropriation
[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…)
SEC Adopts JOBS Act Rules Allowing Public Marketing of Private Fund Securities
[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…)
Ex-Goldman Director Gupta Paying $13.9M Civil Fine
The SEC has announced that former Goldman Sachs board member Rajat Gupta has been convicted of insider trading and is ordered to pay $13.9 million to settle related civil charges of tipping corporate secrets to his friend and business associate Raj Rajaratnam.
In addition to the financial penalty, the order enjoins Gupta from future violations of the securities laws, and permanently bars him from acting as a director of a public company and from associating with any broker, dealer, or investment adviser. (more…)
SEC Folds Forex Fraud
Recently the SEC announced an emergency asset freeze against an unregistered money manager and his companies in Plano, Texas, who are charged with defrauding investors in a foreign currency exchange (forex) trading scheme.
The SEC is suing Kevin G. White for having allegedly raised more than $7.1 million from investors by falsely claiming his low-risk forex trading strategy yielded returns of more than 393 percent since its creation in January 2009. While White touted this track record for the fund that began in January 2009, no investor funds for forex trading were actually received until September 2011. (more…)
Hedge Fund Manager Sues U.S. Treasury, Demands That Government Cease Receiving All of Fannie’s and Freddie’s Profits.
Perry Capital, one of the largest hedge fund managers in the U.S., has filed a lawsuit against the Treasury Department, alleging that the Government’s seizure of Fannie Mae’s and Freddie Mac’s profits is illegal. The lawsuit was filed in a federal court for the District of Columbia, and the full complaint can be found here.
Perry Capital’s complaint is brought under the Administrative Procedure Act. The APA empowers the Court to “hold unlawful and set aside agency action, findings, and conclusions” that are “in excess of statutory jurisdiction, authority, or limitations” or that are “without observance of procedure required by law.” (more…)