Finance Reform Bill, Lobbyists Shift to Regulations

Congress agreed on the Financial overhaul legislation, now Lobbyists and consumer advocates continue their battle: influencing hundreds of new rules and regulations.

Scott Talbott, lobbyist for the Financial Services Roundtable: “Where the rubber meets the road is the regulatory process.”

President Obama hopes to sign the bill into law by the Fourth of July. In weekly address on Saturday, Obama said, “I urge Congress to take us over the finish line, and send me a reform bill I can sign into law, so we can empower our people with consumer protections, and help prevent a financial crisis like this from ever happening again.”

Obama's signature will start the clock on dozens of deadlines embedded in the legislation for regulators from a host of agencies, including the Federal Reserve, the S.E.C. and the F.D.I.C. More on Lobbying and Regulatory follow-through from Sunday NY Times page A1.

Law Firms and others offering overviews and guidance:

Info on one from Debevoise: Please click here to register
by July 6, seating limited. If you prefer to join the seminar by webcast,
please e-mail: debevoiseevents@debevoise.com or call +1 212 909 1988.

SIFMA's summary of the Dodd-Frank agreements. Right here a summary for Hedge Fund - New Standards and Regulation

Fills Regulatory Gaps: Ends the “shadow” financial system by requiring hedge funds and private equity advisors to register with the SEC as investment advisers and provide information about their trades and portfolios necessary to assess systemic risk. This data will be shared with the systemic risk regulator and the SEC will report to Congress annually on how it uses this data to protect investors and market integrity.

Greater State Supervision: Raises asset threshold for federal regulation of investment advisers from $30 million to $100 million, a move expected to significantly increase the number of advisors under state supervision. States have proven to be strong regulators in this area and subjecting more entities to state supervision will allow the SEC to focus its resources on newly registered hedge funds.
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Also this week: hearings before the Financial Crisis Inquiry Commission (FCIC) on Wednesday and Thursday on the role of derivatives in the financial crisis. Joseph Cassano who ran AIG Financial Products, the division behind the insurer's meltdown in September 2008, has evaded public appearances since leaving the insurer some two years ago.

Cassano, will face-off with a panel investigating the causes of the financial crisis. The son of a Brooklyn policeman, Cassano has been the subject of criminal and civil investigations in the United States and abroad, but recently had the specter of prosecution lifted when the U.S. Department of Justice and SEC ended their investigations against him and other AIG executives.


Cassano will rub shoulders with a star cast, which includes Goldman President Gary Cohn and CFO David Viniar who will testify at hearings before the FCIC next Wednesday and Thursday on the role of derivatives in the financial crisis.

Former AIG CEO Martin Sullivan and AIG Chief Risk Officer Robert Lewis also expected to headline the panel's hearings.

The hearings comes on the heels of Congress' votes on financial reform legislation to address the financial crisis. The roles of Goldman and AIG have been scrutinized since U.S. taxpayers committed hundreds of billions of dollars to bail out the banking industry. Read article about the FCIC hearings.

Investment Management Compliance Openings prior to final version of financial-revamp bill

While Lawmakers have yet to tackle the most controversial, divisive issues of the financial-revamp bill, we are seeing some large Investment Management entities including Hedge Funds begin to interview for new Compliance and Legal requisitions.

Of current opportunities, one not posted on any website requires 10+ years in Investment Management Compliance. This is located in Stamford, CT. The Company is a well-known, leading Hedge Fund Group. The role will be handling regulatory examinations, annual compliance review, annual testing review, registrations. Base potential all-in $250K+.

Lawmakers drafting the final version have resolved some difficult issues, including increasing scrutiny of Federal Reserve decisions. Democrats said they want to conclude this week and send the final bill to the president by July 4. That leaves only a few days to resolve issues, such as the "Volcker rule" and a measure that would force banks to spin off derivatives operations. Read more in The Washington Post "Volcker Rule," named after former Fed chairman and presidential adviser Paul Volcker, would ban banks from proprietary trading - trading with their own money.

For a candidate closer to entry level with an Investment Bank, Surveillance Analyst job description can be viewed at the Rosenthal Recruiting job board. Other openings include Director of Audit for a Commercial Bank, Fixed Income - Mortgage Trading Compliance Officer, Chief Compliance Officer in Florida and Capital Markets Compliance.

Lobbyist Roadblocks on the Financial-Overhaul Bill

What are the reasons why bending the ear of lawmakers suddenly has become a bigger challenge for financial-services industry lobbyists? Some lawmakers want to avoid the slightest appearance that Wall Street is getting another chance to throw its weight and money around on key provisions of the bill, including toughened oversight and other bank/securities cash cows.

Although Democrats are hoping to have the financial-overhaul bill signed into law by July 4: Barney Frank is still holding meetings by phone.

Some banks have been told that their views are known enough already, given the long debate over how many legislative changes are needed in response to the financial crisis. Not surprisingly, banks and securities firms still are pressing their case. Bank of America CEO Moynihan recently met with White House and J.P. Morgan Chairman Dimon has made a series of phone calls to lawmakers to argue that several provisions of the bill could damage the banking system and overall economy.

"The closer you get to the end of the process, the more intense everyone's efforts get," says William Sweet, a partner at law firm Skadden, Arps. "A lot of people are losing sleep."

In the first quarter, the latest period for which figures are available, the securities and investment industry spent $28 million on lobbying, according to the Center for Responsive Politics. Some of that spending likely is funding part of the current lobbying push. If the first quarter's pace continues through the rest of 2010, the industry's total lobbying would surpass by 18% the all-time high set in 2008. (Pictured chart courtesy of WSJ on Page C1 6/15/10)

Taking the Conn and Nicking the Con...Financial landscape changes before overhaul is complete

Financial landscape changes before overhaul is complete. SEC Anti-Flash Crash Rules in Place any day.

As shared on LinkedIn today, Compliance/Legal/Audit types may very well like a fresh, yet historical take on "the Con" - in the post-bubble. Madoff, Stamford era.

The book "Taking the Conn and Nicking the Con" by John Hauss is so well-written with personal and historical anecdotes - of Cold War Military missions and FBI cases, including many well-known. With interest in these matters you will find a very enjoyable read with a witty perspective.

About the Author of "Taking the Conn and Nicking the Con":
John (Jack) Hauss is a graduate of Villanova and Fordham Law School. Serving three years aboard the amphibious attack transport ships Chilton and Navarro, he filled such billets as Information Center Officer, Legal Officer, Personnel Officer, Division Officer, and Boat Officer. As an FBI agent, assignments took him overseas and to locations in Georgia, South Carolina, California, Washington State, New York, and New Jersey. Retired, he resides in New Jersey with his wife and together they enjoy spending time with their six children and 12 grandchildren.

Compliance Officers and "Whistleblowing" Retaliation

Can any Broker-Dealer, Investment Advisor Compliance Officers mention any experience you have had yourself or observed with retaliation for "Whistleblowing."

Are you aware of any study, survey or article regarding the extent to which compliance officers are concerned that they may be subjected to retaliation or other adverse action as a result of their activities?
This question was asked at the Society of Corporate Compliance and Ethics (SCCE) LinkedIn Group. As of June 1, there were 13 replies at the SCCE Group.

The Attorney who posted the question, surmised that the situation may be more prevalent than commonly known because - to no one's surprise - very few compliance officers want to talk about it openly.

Memorial Day Comment and Thank You

Remembering doesn’t do the remembered any good, of course. It's for ourselves, the living. I wish we could dedicate Memorial Day, not to the memory of those who have died at war, but to the idea of saving the lives of the young people who are going to die in the future if we don’t find some new way – some new religion maybe – that takes war out of our lives. That would be a Memorial Day worth celebrating.
This is from Andy Rooney. Read the entire commentary at CBSNews.com.
Watch the 2:37 Video + 15 second commercial.

A Memorial Day Thank You - posted by The Law Office of Ryan P. Smith, PLC.

The Department of Veterans Affairs reports that about one million men and women have died in the military during wartime, including about 655,000 battle deaths. This Memorial Day we honor these brave souls for making the ultimate sacrifice for our country. Better still, honor their sacrifice by performing a random act of kindness or simply thanking one of our current service members. (May 28, 2010)

FINRA - Annual Conference kick-offs | FINRA Fined Piper Jaffray $700,000 for Email

FINRA - Annual Conference

kick-offs tomorrow following yesterday's announcement that it Fined Piper Jaffray $700,000 for Email Retention Violations, Related Disclosure, Supervisory and Reporting Violations

Retention issue: Finra fines Piper Jaffrey over email archiving

– As summarized by the Investment News, Finra on Monday said the firm failed to keep 4.3 million e-mails from late 2002 through 2008, due to intermittent technical issues with retention and retrieval.The problem came to light after Finra asked Piper for an electronic version of a hard-copy e-mail the regulator had obtained during a separate investigation. Only then did the firm inform Finra of the retention issues, Finra said. Who are you going to call? See a related article entitled Backup and archiving suggestions for small broker-dealers

It is too late now to register FINRA's Annual Conference: In-person attendance has sold out. Space is still available for the live streaming video broadcast.Select conference sessions will be available via on-demand video in late June. CLE-eligible audio will also be available in late June. Register for what you can for FINRA's 2011 Annual Conference.
Recent Updates, Agenda, Sessions, CRCP Luncheon, Office Hours, Speakers, CLE and CPE Credit

 

 

Small Hedge Funds Pained By New Regulations | FINRA & Wall Street 'Hall of Shames'

Hedge funds have bounced back in a big way from the financial calamity of 2008, but that hasn’t stopped regulators from trying to hit the industry with new rules. Continue reading this at Dealbreaker.
which provides a link to CNBC which notes this could spur even more consolidation along the lines of Man Group/GLG deal yesterday.
Hedge Fund Inquiry Will Slam Small Funds [CNBC.com]

Dealbreaker also has a piece on an Ex-Morgan Stanley Employee Running a Wall Street “Walk of Shame Tour” - video included from the Deal.

Seven (7) FINRA member firms recently were expelled or suspended for failing to pay fines or arbitration awards or for not supplying financial information. Twenty-seven (27) Individuals had their licenses revoked, were barred or were suspended for various reasons. See the list on pages 24-25 of the May 2010 FINRA Disciplinary Sanctions for via the FINRA Hall of Shame's Latest Entrants.

This is courtesy of Compliance Insights' What Went Wrong:
Who Got Theirs And Why. Fines and Sanctions levied by the SEC, FINRA, NYSE Euronext, CFTC, CBOE, and others. Compliance Insights' most recent update is "FINRA: Thomas Weisel Dumped ARS's into Client Accounts"
Read more on the latest. "FINRA: Thomas Weisel Dumped ARS's into Client Accounts"

Finra Takeover of NYSE Regulation for Equities, Options Markets

NYSE Regulation, a not-for-profit subsidiary of NYSE Euronext, will oversee Finra's performance of regulatory services for its markets, according to a news release.

Finra Chairman Richard Ketchum said in a statement that the deal allows the group "to have a more holistic, cross-market approach to regulation" amid "fragmented markets, aggressive competition and complex trading strategies."

Ketchum had warned that multiple regulators jockeying to keep tabs on U.S. trading are working with an incomplete picture of the overall market, with differing sets of rules creating loopholes and the potential for some participants to avoid oversight.

"This is the right thing for the markets and the right thing for customers," NYSE Euronext CFO Michael S. Geltzeiler said. "Moving these types of activities to Finra, coupled with the business they have from Nasdaq and BATS, marks one step toward the optimal structure where we have a single market surveiller."

Geltzeiler said that eventually he would prefer all U.S. share-trading volume to go through the same regulatory surveillance required of exchanges like NYSE Euronext, and that consolidating these functions could make the overall process cheaper and more efficient for everyone.

Read Katie Couric's advice on Movie Futures

While Members of Congress Voice Opposition to Trading of Movie Box-Office Futures following the CFTC approval of initial proposals from both Media Derivatives, part of Scottsdale, Arizona-based Veriana Ventures, and Cantor Fitzgerald's Cantor Exchange unit, Katie Couric has opined.

From Katie at CBS News:

Movies are like kernels of corn, some of them pop big but a lot of them end up duds at the bottom of the bag.

But Wall Street trading firm Cantor Fitzgerald is one of two companies planning to open futures markets for movie releases, betting on potential blockbusters like Avatar, and box office busts like Gigli.

Investors would try to make money by guessing how much a film would earn during its first month at the box office.

The idea could help Hollywood studios spread around the risk in case they get stuck with a flop and for an investor with a keen eye it could really pay off.

Before you tap what's left of your 401k though, you should know futures contracts come with a lot of risk. A bet on that new romantic comedy could easily turn into your own personal horror show.

But unlike the folks who spent ten bucks on Speed 2 Cruise Control, there's at least a possibility of a return.

That's a page from my notebook.

I'm Katie Couric, CBS News.

Compliance and Regulators - Understanding Structured/Securitized products and Derivatives

In a Wall St Journal Op-Ed WSJ today, Gary Gensler CFTC chairman: addresses how OTC Derivatives should be routed through a central clearinghouse.
Not being cleared in a central location cause markets to be "too interconnected to fail. This part of the reform bill will greatly reduce interconnectedness and the need for future bailouts," Gensler writes. Read WSJ Op-Ed.
JOB Opportunities for Compliance Officers:
-who understand structured/securitized products and derivatives.
-have worked with and directed IT to develop Sales and Trading exception reports from development through implementation.

There is an excellent opportunity that was just added to the Rosenthal Recruiting Job Board: Job Title is Equity, Derivatives, Fixed Income - Surveillance Officer and this job listing can be viewed now.

Another current listing calls for a Senior Futures Compliance Officer - see job description. The role will be responsible for the administration of a comprehensive futures compliance program for Institutional Securities, including coverage of both sales and proprietary futures trading.
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Meanwhile you can read how Investigators and Congress are taking a closer look at Collateralized Debt Obligations (CDOs), embedded in the SEC case against Goldman. A SIFMA analysis shows that synthetic CDOs made up a little more than 10% of the market in 2007, with cash-bond CDOs making up the rest. Market insiders are delving deeper into the complex transaction to calculate potential legal costs. Media reports today on Washington and Bank analysts looking to determine whether other banks, beyond Goldman, might face legal action, exposing them to potential liabilities. NYT article "Questions for Banks That Put Together Deals."

CDO Scandal - Subprime Refresher

Meet wanna-be homeowners, mortgage originators, The enablers. AKA the rating agencies...this is courtesy of Courtney Comstock, a writer at Clusterstock.

SEC case against Goldman and Fabrice Tourre* has a spotlight back on the mortgage crisis. Tourre allegedly packaged CDOs filled with very risky mortgage bonds and then marketed them to investors by telling them that Paulson was long. He wasn't. Michael Lewis's book, "The Big Short", explains very well what happened during the crisis - who was long, who was short, and how they did it.

Read More or as a Slideshow
http://www.businessinsider.com/whos-who-in-cdo-scandal-2010-4#ixzz0lS3RNxwu

Who is "Fabulous Fab" Fabrice Tourre? Click here for Details and find out.

*Fabrice Tourre's Bloomberg Profile

Mass. Senator - 'Wall Street-backed' - Can’t Explain Opposition to Financial Reform

In his weekly address, Obama called Senate McConnell’s mantra that the financial regulatory reform bill would amount to a bailout bill a “cynical and deceptive” argument. Obama said he will veto a financial regulatory reform bill that does not regulate the derivatives market properly. See More.


Summary is from RawStory.com Asked by the Boston Globe how he'd like to see the bill improved, Ted Kennedy's replacement in the Senate doesn't appear to know what it was he wanted changed though is against an extra layer of regulation.

Boston Globe wrote that Sen. Brown appeared to oppose the creation of a consumer protection agency within the Federal Reserve. 'It's more government, it's more government regulation at a time when businesses are trying just to pay their bills,' he said. 'Is that good? . . . If it's an area we need to fix, then I'm certainly open to it. But I haven't heard that that's the biggest thing that's problematic with it.'"

Bloggers immediately jumped down Brown's throat, pointing out that he received a veritable truckload of cash from the financial services industry just before his election.

ThinkProgress, the blog of the Center for American Progress, noted that their analysis found that Brown received $200,000 in campaign donations from Wall Street and business executives. $106,000 came from Wall Street executives alone. Chamber of Commerce, a Republican-oriented trade group, also spent $1 million on issue ads supporting Brown in the final days of his campaign, ThinkProgress noted.

In picture above from left, Senators John Ensign, Republican from Nevada, Scott Brown of Massachusetts, and Tom Carper, a Democrat from Delaware, chatted on Capitol Hill on April 15, 2010. (Associated Press)

Obama Financial Reform Push | Hedge Fund, Private Equity Compliance opportunity

President Obama met with Democratic and Republican leaders from Congress to discuss passing an overhaul of financial regulation. House passed its version of regulatory reform, and the Senate banking committee approved its bill. Republican opposition to the legislation has caused it to stagnate in the full Senate as reported by Reuters and AP.

Rosenthal Job Board now shows: Alternative Investment Compliance Officer: Opening is with an Investment Bank in NY. Candidate must have experience w/Private Equity, CLOs, Hedge Fund of Funds. Please review the job description.

PICTURED: Sen. Mitch McConnell of Ky., center, meeting w/reporters in Washington, Tues, 4/13/10 flanked by Sen. Lamar Alexander, R-Tenn., Sen. John Cornyn, R-Texas, and Banking Committee Ranking Republican Sen. Richard Shelby, R-Ala. (AP Photo)

Setting up a Mutual Fund - Webinar Today: Registration changes on the Buy Side ?

Thinking about Registration changes on the Buy Side ?

YOU ARE INVITED to a free Webinar hosted by Garrity Graham


Setting up a Mutual Fund

Today

April 13th, 2010 Time: 11:00 a.m. – 12:30 p.m. EST

-Disclosure requirements - migrating from private to public disclosure
-Practical issues with accounting and disclosure regulations
-Service providers - how they help and assist fund companies comply with SEC regulations
Presented by: Tom Siedzik, Senior Vice President, Strategic Business Development, Bowne & Co., Inc

-Role of the Fund Administrator: unregistered versus registered products
-Areas of emerging capabilities
-Current market trends and outlook for the future
Presented by: Keith Slattery, Senior Vice President, Fund Administration, State Street Global Services


-What are the differences between a traditional hedge fund, a registered hedge fund and a mutual fund?
-Converting an existing traditional hedge fund to a mutual fund.
-Starting a mutual fund from scratch.
-Things to watch out for the hedge fund CCO who is now a mutual fund CCO.
Presented by: Philip Thomas, Garrity, Graham, Murphy, Garofalo & Flinn.

Each speaker will provide a presentation followed by a joint Q&A period at the end of the session, moderated by Philip Thomas, Banking and Financial Services, Garrity Graham

To register, please click here.

The sound of the webinar will be broadcast over your pc speakers, you will only need to dial into the teleconference if you do not have sound on your pc. Questions will be submitted through online chat.

If you are unable to attend the live session, a recording will be made available after the event.

Garrity, Graham, Murphy, Garofalo & Flinn, P.C.
40 Wall Street
28th Floor
New York, NY 10005
Tel: 646 512 5717
Email: pt@garritygraham.com

72 Eagle Rock, Suite 350
East Hanover, NJ 07936
Tel: 973 509 7500 x2272
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"You could've, you should've and you didn't" do enough to regulate

The first to testify to the Financial Crisis Inquiry Commission (FCIC), was former Fed Chairman Alan Greenspan who defended the central bank's record on consumer protection. Phil Angelides, who is chairman of the panel, asked Greenspan. "You could've, you should've and you didn't" do enough to regulate. More from WSJ (via The Australian) in piece titled "Greenspan, panel spar over Fed's role in financial crisis."




Could Greenspan or anyone have achieved becoming a Super Regulator? Could anyone? Is that what is needed? A Regulator Daredevil to keep up with producers and bankers? Will the Oversight Panel now proposed be approved by the Senate? What about a new US Systemic Risk Regulator ?