Friday, March 26, 2010

Where Compliance Pros Connect Online

Rosenthal Recruiting was included in a post today on - part of The Wall Street Journal Digital Network - in an article called “Where Compliance Pros Connect Online.”

In addition to FINS' mention of what she referred to as "Compliance Oversights", a Rosenthal Recruiting 'trusted partner' was included as well. Bill Singer, whose Broke and Broker blog is listed at was also included in the blogs section of the article.

Here is an excerpt and the parts about 'Compliance Oversight':

Now that financial regulation reform has a chance of passing, compliance has never been so important. It will be up to compliance officers to ensure that their companies meet all the new demands — whether at an investment bank or a PE shop.

If you’re looking to keep up with the latest on all the new decrees or just a little cyber-networking, here’s a guide to online communities for compliance officers.

-Broker Dealer, Investment Advisor Compliance Officers brings together, you guessed it, BD and IA compliance officers -- and has nearly 700 members. It's run by compliance recruiter and blogger Stuart Rosenthal (see below).

- Compliance Oversights is maintained by Rosenthal, the owner of the Broker Dealer, Investment Advisor Compliance Officers LinkedIn group. Rosenthal, a former compliance officer-turned-recruiter, gives a recruiter's perspective on compliance hiring.

Please follow the link to view the entire article and see the compliance-related LinkedIn Groups, blogs, and Twitter accounts FINS recommends.

Tuesday, March 23, 2010

Can and Should SEC Careers be More Attractive?

Can regulatory agencies enforce and put in place new rules, without being able to recruit, train and retain effective staff? When it comes to the Securities and Exchange Commission (SEC), few would argue the need for upgrading employee training to ensure that financial malfeasance is detected sooner - this is written by FINS - used the word "sexy" and an editor there suggested it for this Compliance and Financial Oversight Blog.

A recent op-ed in the New York Times proposed a readjustment in how the SEC is run. Instead of encouraging lawyers to come work for the Commission it suggested a Foreign Service-esque program that would cater to all backgrounds.

The author, a former Chief Compliance Officer and Director of a securities exchange, suggests the following to retain top talent at the SEC:
1. Offer career tracks that hew toward specialties, such as consumer protection and financial fraud.
2. Make employees eligible for pension after 20 years of service.
3. Establish a financial training institute -- comparable to the Foreign Service Institute -- that would allow for continued education. Read on for details on making an SEC career more attractive.

Saturday, March 20, 2010

Lehman Whistle-Blower's Letter & Outrage About Regulator Bonuses

One person who has looked good in the Lehman mess is Matthew Lee. In May '08, Lee sent a letter to management detailing problems with firm accounting. The letter didn't mention Repo 105, though Lee told Lehman auditor E&Y about that a month later, it does mention several other issues. DealBook obtained the May 16, 2008 letter by Lee, and it's available for you to read. The letter was addressed to Martin Kelly, Lehman controller; Gerard Reilly, head of Capital Markets Product Control; CFO Erin Callan; Christopher O’Meara, Chief Risk Officer. Please click here for a link to Dealbook and the letter.

Did you see reports this week about government regulators' bonuses?'s Julie Steinberg wrote a piece and asked where's the outrage ?
Recent documents obtained by AP under the Freedom of Information Act show that government regulators received bonuses during the lead-up to the financial crisis. From 2003 to 2006, the FDIC, the Office of Thrift Supervision and the Office of the Comptroller of the Currency (the three offices that monitor most US banks), gave out $19 million in bonuses.

As FINS noted 'each employee wasn't taking home millions like ibanking brethren. But some took home thousands in a bonus that increased their salaries by 25%. Moreover, $8.4 million was allocated to financial examiners, the guys who are supposed to look at bank documents and catch potential problems. Oops. Guess these guys didn't deserve their perks, either.Bonuses totaling thousands of dollars don't make for scintillating sound bites, but American taxpayers should know what else their money funded.'

Saturday, March 13, 2010

Lehman - Shades of Enron: Will there be a Criminal Case ?

Spring in the air, will there be any Lehman canaries?

WSJ reports today that Legal Experts Say a Lehman Criminal Case Would Be Difficult.

Peter Henning follows white-collar crime issues for DealBook.
Henning notes that the bankruptcy examiner’s report filed by Anton Valukas on Lehman discusses accounting gimmicks reminiscent of how Enron tried to prop up its balance sheet in 2001 before it collapsed.

Henning writes the canary in the coal mine for whether there will be a criminal case is if we see executives below the executive suite agreeing to cooperate. Prosecutors work from the lower levels of management and then work their way up the chain. A criminal case will need cooperating witnesses to flesh out what happened because the documents and e-mail alone will not be enough to prove intent.

Henning notes that, accounting fraud cases generally take at least 18-24 months to develop, at which point the government will decide to proceed or allow the investigation to lapse. We are almost to that point, so the next few months will be crucial to seeing whether any criminal charges emerge from the collapse of Lehman Brothers. As the TV announcer says, “Stay tuned.”

In the now nearly 10-year old ENRON case, a powerhouse team of lawyers for former Enron CEO Jeffrey Skilling filed into the Supreme Court earlier this month to argue that Skilling's conviction on fraud, conspiracy and insider trading was constitutionally flawed and subject to jury bias. ABC News reported on Skilling and received 51 comments.

Skilling's lead lawyer, Sri Srinivasan of O'Melveny & Meyers, told the Supreme Court justices that the trial court judge had subjected Skilling to "deep-seated bias" in the community when he had refused Skilling's requests to have the trial moved from Houston. WSJ reported that Skilling received a Supreme Mixed Reception.

Thursday, March 11, 2010

Geithner Warns EU on HF and PE Regulation about Protectionism

U.S. Treasury Secretary Geithner has written to the European Commission warning that plans to regulate hedge funds and private equity firms could cause tensions with Washington, The Financial Times reported.

Citing a letter but not quoting from it directly, according to the FT report. Geithner wrote to Michel Barnier, European commissioner in charge of market regulation, on March 1 saying the EU was headed for a clash with the US and Britain if the planned rules proved overly protectionist. Read More at NYT summary.

Tuesday, March 9, 2010

Big Firm Strategic Pick Ups & Niche Firm Start Ups

Way Up from the bottom, with Wall Street and Big Bank's recent financial results, Rosenthal Recruiting sees the 'Employment Scene' picking up with the biggest firms strategic moves and smaller niche firms launching, expanding or adding capabilities such as Research and revenue producers.

Example of a new - or 'reformed' niche entrant: Mark Madoff will start his own research boutique firm. "Making up Madoff" (reported by Dealbreaker)
Link for more, go to Dealbreaker to read about the email Madoff sent to friends.

Reported yesterday by Bloomberg, WSJ and Business Week -- Morgan Stanley hired Citigroup’s Gary Shedlin, whose clients include BlackRock, now the world’s biggest money manager. Dealmaker magazine named him “top rainmaker” in the financials sector in 2006.

Shedlin, 46, will be a vice chairman, said an MS spokeswoman. Morgan Stanley's new banker helped NYSE Group Inc. create the first transatlantic securities market with its 9 billion euro ($12 billion) purchase of Euronext. Shedlin started his career at Lazard Freres . In 2004, Shedlin advised Bank One and its CEO, Jamie Dimon, on a merger with J.P. Morgan Chase.

Thursday, March 4, 2010

Volcker Rule would Ban Banks from investing in Private Equity or Hedge Funds

President Obama yesterday sent Congress the Volcker Rule language, and as PE HUB notes it would indeed ban banks from investing in private equity or hedge funds. If enacted, this would mean at least two things: (1) Banks with direct investing arms would have to divest, either via sales to PE firms or indipendent spinouts. In either case, it's unclear if existing bank LP commitments to those platforms would be grandfathered in. (2) Banks would not longer be able to be LPs in private equity funds, thus depriving the alternatives market of a major capital source. Again, the grandfathering issue arises -- although perhaps this is where secondary funds can spend all that cash they've been hoarding. Read More from Reuters PE Hub.

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