IMF Forecasts Slower Momentum for Worldwide Economic Growth in 2015

Today, Managing Director of the International Monetary Fund (“IMF”), Christine Lagarde gave a talk at the Davos at Provence meeting in France where she discussed the IMF’s forecasts on worldwide economic growth. The IMF’s global economic outlook will be released later in July, but the outlook could be similar to the report released earlier in April. In April, the IMF “had forecast that global output would grow by 3.6 percent in 2014 and 3.9 percent in 2015.”

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Hotel Lawyer: What is Happening with Chinese Real Estate Companies Investing in Banks?

Concerns over a real estate bubble in China

For decades, China was referred to as the “sleeping giant.” This reference is to the great potential impact of the country, its vast population, and its economy, but also to the fact that this potential was largely unrealized for hundreds of years. Well, the sleeping giant is awake! And the world financial press is now full of analysts following China and the international ramifications of its every action on the world economy.

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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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