Monday, June 29, 2009

Everything You Need to Know About Madoff Sentencing

WSJ Law Blog has Wayne State law professor who studied filings in advance of the Madoff sentencing slated for today. Click for an overview of how it’s likely to unfold. Also has earlier posts on filings from Ira Sorkin, Madoff lawyer, and government, respectively (each contains links to underlying filings).

Sunday, June 21, 2009

FINRA sank Attorney's job chances as Florida Regulator

FINRA sank his job chances, attorney says - reported by Investment News. A Florida attorney claims that FINRA derailed his bid to become the state's top watchdog in retaliation for a previous legal dispute he had with the regulator. Kevin Carreno maintains that he was on his way to being appointed commissioner of Florida's Office of Financial Regulation when FINRA sent his former employer a Wells notice alerting that he faced potential enforcement actions.
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Tuesday, June 16, 2009

Congressman Pushing S.E.C. for Madoff Report

Second day in a row, Rep. Paul Kanjorski has strongly urged the SEC to release its internal investigation into how the agency missed Madoff’s $65 billion Ponzi scheme before Congress votes on the new regulatory reform package.

Kanjorski, chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, said in a letter that he wants the final reports on the Madoff investigation by the end of July because he intends to use them as a case study for reform of the financial system. (Read the full text at NYT Dealbook)

On Wednesday, Obama economic team expected to release proposals for new financial regulations. House and Senate expected to begin debating the proposals shortly thereafter.

The SEC inspector general responded to initial letter from Kanjorski on Monday urging him to provide an update on the results of the Madoff investigation. Said SEC intends to issue three reports “very shortly” detailing all of the investigations that the SEC conducted into Madoff-related entities since 1992 and the reasons why the agency failed to uncover the scheme.

Two other reports that will provide specific recommendations on for improvement of the SEC’s various divisions are targeted for Sept. 30.

“I would encourage you to complete your examinations and release your findings sooner, if at all possible, given the importance of these matters,” Mr. Kanjorski wrote in his latest letter to the S.E.C.

Thursday, June 11, 2009

SEC Survived, Schapiro Now Fights to Keep Regulatory Teeth

In late April, senior Securities and Exchange Commission enforcement lawyers met to discuss a shake-up that would place them into specialized groups. Some senior lawyers were skeptical.

SEC Chairman Mary Schapiro wasn't hearing it. According to several people present, she said lawmakers were harshly scrutinizing the agency and "we need to demonstrate that we're going to make changes." Then she warned, "If we don't get serious about this process, we may cease to exist." Schapiro, on the job since late January, is fighting two closely related battles: fixing a troubled agency and persuading Congress and the Obama administration that it deserves to survive.

Chairman Mary Schapiro, left, needs to convince Treasury Secretary Timothy Geithner, among others, the value of a strong SEC. Here, the two at a meeting on executive compensation in Washington on Wednesday. Now she is poised to notch her first victory. Printed in The Wall Street Journal, page M4 Write to Kara Scannell at

Friday, June 5, 2009

Wealth Management, High Net Worth, Hedge Fund Pickup?

Lazard, one of the world's preeminent financial advisory and asset management firms, announced that it is starting a private wealth management subsidiary to be managed by Thaddeus Shelly, formerly senior managing director and regional head of Bessemer Trust. Shelly spent eleven years at Bessemer, one of the oldest firms in the business of managing money for wealthy families, and before that he founded and led Legg Mason’s “ultra high net worth” private client services business. Lazard said it plans to offer a variety of services to its customers including tax planning, philanthropic advisory and investment management advice.

Why is this an important announcement? Well, for starters, it’s much more than some a hiring announcement by a prominent company. Frankly, I don’t need to tell you that this is a tough environment. On top of all the dismal economic news, there’s the daunting prospect of more financial regulation and the challenge of trying to anticipate new regulations by possibly new regulatory organizations. Clearly, these are not the times for the timid to undertake expansion.

At The Rosenthal Consulting Group we’re beginning to see signs that the wealth management and private client firms are getting up off the canvass and there’s even some sign of activity in for hedge funds. As such, we’re getting inquiries from those folks about hiring for new slots or re-filling vacant posts. My guess is that such interest will soon translate into hiring, maybe by newly established firms and those still standing. Once floodgates reopen at such firms, I’m guessing that more Law Firms and larger RIAs will soon follow. You can view our current list of employment opportunities at

PS A Regulatory trend and individual investor comfort: An organization of financial advisers says that a few reported rotten apples should not taint the entire group. Finding Financial Advice in an Age of Bad Behavior

Stuart Rosenthal
(973) 462-8766

Monday, June 1, 2009

What is the Right Amount of Regulation?

The looming fight over regulation is the beginning of a broader debate over the future of the financial industry. At the center of the argument: What is the right amount of regulation? Those who favor more regulation say it would offer early warning signals when companies take on too much risk and would help avert catastrophic surprises like the huge derivatives losses at AIG, which has so far received more than $170 billion in taxpayer commitments. Banks say too much regulation will stifle financial innovation and economic growth.

Debate about where derivatives will trade speaks to core concerns about the products: transparency and disclosure.

There are two distinct camps in this argument. One camp, which includes legislative leaders, is pushing for trading on an open exchange — much like stocks — where value and structure are visible and easily determined. Another camp, led by the banks, prefers that some of the products be traded in privately managed clearinghouses, with less disclosure.

Obama administration agrees that more regulation is needed. Proposal unveiled recently by Treasury Secretary Geithner won plaudits, according to the NY Times for trying to make derivatives trading less freewheeling and more accountable — a plan that hinges in part on using clearinghouses for the trades.

Critics in both the financial world and Congress say relying on clearinghouses would be problematic. There are 109 NY Times Reader Comments on this article
as of June 1. You can also enter comments at Compliance and Financial Oversight.

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