Timothy Massad, the newly appointed chairman of the Commodity Futures Trading Commission, made one of his first major decisions at the agency with the appointment of a new enforcement chief Tuesday. Mr. Massad named Aitan Goelman, a Washington, D.C.-based trial lawyer with the law firm Zuckerman Spaeder LLP, head of the agency’s enforcement division. He replaces acting enforcement chief Gretchen Lowe and will inherit a full plate of cases, ranging from ongoing probes into manipulation of the London interbank offered rate, or Libor, currency manipulation and derivatives-rigging investigations. More in the Wall Street Journal [...]
|
||||
|
A group of banks has joined together to ask the U.S. Supreme Court not to hear a bid by the liquidation trustee for Bernie Madoff’s investment group to sue the banks for billions of dollars for what he says is their complicity in Madoff’s Ponzi scheme, according to a brief filed Tuesday. HSBC Bank PLC, UBS AG, UniCredit SpA and others banded together to fend off Supreme Court scrutiny of a June 2013 decision by the Second Circuit that found that the trustee, Irving H. Picard, could not sue for a wrong as the representative of a perpetrator of the wrongdoing, according to the filing. The banks argued that Picard hadn’t shown why the Securities Investor Protection Corp. should be permitted to step in and pursue litigation in markets that are already regulated by the U.S. Securities and Exchange Commission and others, according to the brief. More on Law360 [...] In October, 2011, the Securities and Exchange Commission filed a complaint in the Southern District of New York against Citigroup. The complaint, which resulted from a multi-year investigation, alleged that just before the financial crisis of 2008, the bank had failed to make proper disclosures when it sold certain risky assets. The S.E.C. also presented the court with settlement terms that it had negotiated with Citigroup. If Citigroup paid a fine of two hundred and eighty-five million dollars and erected certain internal bulwarks against future fraudulence, the S.E.C. would drop its lawsuit and Citigroup would not have to admit any wrongdoing. A month later, Judge Jed Rakoff rejected the settlement. This wasn’t the first time that Rakoff had disagreed publicly with the S.E.C. In 2010, he grudgingly approved a similar settlement between the S.E.C. and Bank of America, calling it “half-baked justice at best.” Apparently, the Citigroup settlement wasn’t even that. In his opinion, Rakoff wrote that the settlement allowed the bank—a clear “recidivist”—to avoid taking responsibility for its actions, and that the S.E.C.’s fine was mere “pocket change” for a financial institution so large. Furthermore, by cutting off its lawsuit, the S.E.C. had “deprived” the American people “of ever knowing the truth in a matter of obvious public importance.” More in The New Yorker [...] A Securities and Exchange Commission official said the private-equity industry has more work to do concerning disclosure to investors, building on comments a month earlier from one of the regulatory body’s directors. Igor Rozenblit, co-head of the SEC’s private funds unit, called the private- equity industry to task over its communication and transparency with investors, saying at an industry conference in Boston Tuesday morning that there “does appear to me at least that there is some sort of disconnect between what [general partners] think their [limited partners] know and what LPs actually know.” General partnerships operate buyout and venture firms while limited partners are the institutions that invest in those firms. More in the Wall Street Journal [...] The Senate on June 3 confirmed a new chairman of the Commodity Futures Trading Commission and two new commissioners, bringing the agency to a full complement of commissioners to regulate the commodities and futures businesses that play a major role in agriculture. The Senate first confirmed Sharon Bowen by a vote of 48 to 46. After approving Bowen, the Senate proceeded to vote on Timothy Massad, a Treasury official and Democrat, to become a commissioner and chairman of the commission, and Christopher Giancarlo, a Republican, to fill open positions. More on AGWeek [...] MF Global Holdings Ltd. wants a judge to slash the claims of former officers being sued over the broker-dealer’s bankruptcy, including ex-Chief Executive Jon S. Corzine, so the estate can quickly pay back other creditors. In a Thursday filing with U.S. Bankruptcy Court in Manhattan, lawyers for the team winding down MF Global asked Judge Martin Glenn to cancel certain claims filed by Mr. Corzine and others, or at the very least, place them below those of other creditors or estimate the maximum amount the officers could receive. In the filing, administrator winding down MF Global said, without the approval, “these contingent and unliquidated claims will unduly delay the administration of the Chapter 11 Cases and prevent the Plan Administrator from making distributions to all creditors.” With an approval, some creditors of MF Global’s Finance USA unit could see some of their money within weeks, the filing said. A hearing on the matter is set for June 19. More in the Wall Street Journal [...] The trustee for notorious Ponzi schemer Bernie Madoff on Thursday asked a New York federal judge to allow him to appeal a decision that could threaten his clawback suits against investors who profited via the scheme, saying it conflicted with Second Circuit precedent. Irving Picard claims that U.S. District Judge Jed S. Rakoff’s April decision — which allowed defendants to seek dismissal of his claims on the grounds he had failed to adequately allege they were motivated by a lack of good faith —– is contrary to rulings by the Second Circuit that place the burden of proof for such a defense on the defendants. He also argued that his appeal should be allowed to proceed now, rather than after any motions to dismiss by the defendants have been resolved, because an incorrect finding could prove a major disruption to the judicial process. More on Law360 [...] Is it the job of federal judges to help the Securities and Exchange Commission get good press? That’s one of the questions surrounding a Wednesday decision from the U.S. Court of Appeals for the Second Circuit. A unanimous three-judge panel rejected district Judge Jed Rakoff’s refusal to endorse a 2011 SEC settlement with Citigroup. C +0.38% The appellate judges sent the case back to Judge Rakoff to review it again. The SEC charged Citi with negligence in creating a 2007 collateralized debt obligation. The $1 billion deal allowed large institutions to bet one way or another on the housing market. Citi took a short position and the SEC claimed the bank failed to adequately disclose this fact. Without admitting or denying guilt, Citi agreed to write a check and sin no more. More in the Wall Street Journal [...] An appellate panel delivered a significant victory for Wall Street’s chief regulator, the Securities and Exchange Commission, yesterday by overturning a lower court ruling rejecting a settlement between the Commission and Citigroup C +0.8%. The Second Circuit Court of Appeals found that when a judge scrutinizes a consent decree involving the agency, it must take care “not to infringe on the SEC’s discretionary authority to settle on a particular set of terms.” Under this standard, the panel concluded that the lower court judge, Jed Rakoff, had failed to adequately defer to the Commission. More in Forbes [...] When JPMorgan Chase & Co. (JPM)’s Jamie Dimon got a 74 percent raise in January, U.S. Attorney Preet Bharara fumed. He had forced the bank just weeks before to pay $1.7 billion for enabling Bernard Madoff’s Ponzi scheme. And yet Dimon was being rewarded. Now, five months later, Bharara’s frustration is directed at another bank. More on Bloomberg [...] |
||||
|
Contact us by phone at (631) 425-0770, fax at (631) 421-5701 or by email at admin@investoraction.org
|
||||