The Commodity Futures Trading Commission will soon fill its empty seats. After months of delays, the Senate on Tuesday confirmed all three of President Barack Obama’s nominees. Timothy Massad, picked to replace former chairman Gary Gensler, is a former Treasury Department official. Prior to joining Treasury, Massad was a partner with the law firm of Cravath, Swaine & Moore in New York. He left the firm from December 2008 to February 2009 to assist the newly formed Congressional Oversight Panel, then headed by Elizabeth Warren, one of the oversight agencies for Troubled Asset Relief Program. Sharon Bowen, a Democrat, is currently a partner in the New York office of Latham & Watkins and serves as acting chair of the board of directors for the Securities Investor Protection Corporation, which helps recover money to investors with assets in the hands of bankrupt and financially troubled brokerage firms. She will be the first African-American CFTC commissioner. More in Compliance Week [...]
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The U.S. Senate overrode an attempt Tuesday by its two Louisiana members to stand up for victims of the $7 billion-plus Stanford investment scheme, although the defiance was largely symbolic and its futility does not directly affect the efforts of the victims to recover their losses. The Senate voted 48-46 to confirm President Barack Obama’s nomination of Sharon Bowen to a seat on the federal Commodities Future Trading Commission. Both senators from Louisiana — Democrat Mary Landrieu and Republican David Vitter — voted against Bowen. Democrats supplied all 48 “yes” votes. Landrieu and Democrats Bill Nelson, of Florida, and Jeanne Shaheen, of New Hampshire, and independent Bernie Sanders, of Vermont, joined Vitter and 41 other Republicans voting no. The CFTC had nothing to do with the Stanford swindle, a Ponzi scheme in which an estimated 1,000 to 2,000 investors in Baton Rouge, Lafayette, Covington and other parts of Louisiana were swindled out of between $500 million and $1 billion. That equates to an average loss of $250,000 to $1 million each. More in the New Orleans Advocate [...] Citing concerns over investor protection, Securities and Exchange Commissioners, in an unusual assertion of their authority over Finra, will take up a proposal that would allow arbitrators to alert Finra to broad investor threats in the middle of disputes they are hearing. In a May 27 notice published in the Federal Register, the SEC expressed concerns that the Finra proposal could harm investors if a mid-case referral is used as grounds to request the recusal of an arbitrator or challenge an arbitration award. In the same notice, the SEC indicated that it would “institute proceedings” on the Finra proposal, or have the full five-member SEC vote on whether to adopt or reject it. Typically, SEC members delegate decisions on Finra rules to staff members. More in Investment News [...] Senate lawmakers on Tuesday confirmed all three of President Barack Obama’s nominees for the Commodity Futures Trading Commission, restoring the top U.S. regulator of swaps and other derivatives to a full slate of commissioners. The Senate, by voice vote, approved senior Treasury Department official Timothy Massad to head the five-member agency, and brokerage executive J. Christopher Giancarlo for an open Republican seat at the CFTC. Mr. Massad will succeed Gary Gensler, who stepped down as CFTC chairman in January. The Senate also confirmed securities lawyer Sharon Bowen to fill a vacant Democratic slot. Ms. Bowen was confirmed by a vote of 48-46, largely along partisan lines. More in the Wall Street Journal [...] Average U.S. investors for the first time gained some access to trading activity in so-called “dark pools” under a market transparency effort announced Monday by a Wall Street self-regulatory group. The Financial Industry Regulatory Authority website now features data that shows activity levels in alternative trading systems, including dark pools. The transactions occur away from traditional stock exchanges and account for a significant percentage of total U.S. over-the-counter trading in exchange-listed stocks. The data is available to the public free of charge on a delayed basis. Professional investors can get the trading information on a real-time basis via proprietary electronic feeds known as securities information processors. More on USA Today [...] A lot of people would like to know why so few of those who brought this economy to the brink of collapse have paid any price for their actions. They also ask why banks, deemed too big to fail at the time of crisis, have become still larger. Though we still have no good answers, we now have even more questions: It’s been five years since Allen Stanford’s massive Ponzi scheme unraveled, but his victims, many of them in Louisiana, have failed to get a penny back. Investors who were similarly swindled by Bernard Madoff in New York, however, qualified for payouts up to $500,000 from the Security Investors Protection Corporation. Louisiana’s U.S. senators, thirsting either for justice or votes, have taken up the cause. Although they may not be able to spring any money for constituents suckered by Stanford, they can seek a measure of revenge for the SIPC’s refusal to bail out the investors he left in the lurch. More in the IND here. [...] Investors who lost millions of dollars by purchasing fraudulent certificates of deposit from Allen Stanford’s Texas-based financial firm are fighting the nomination to a federal board of a lawyer who they say fought compensation from an industry-financed reimbursement fund. Some of them met in Baton Rouge Thursday with Sen. David Vitter, R-La. They encouraged Vitter to keep up his fight against the nomination of Sharon Bowen, acting chair of the Securities Investment Protection Corp., which oversees the reimbursement fund for fraudulent investment schemes, to a seat on the federal Commodity Futures Trading Commission. The SIPC successfully went to federal court to fight reimbursement of Stanford victims. In 2012, Allan Stanford, the former board of directors chairman of Stanford International Bank (SIB), was sentenced to 110 years in prison for what the federal government said was orchestrating a 20-year investment fraud scheme in which he misappropriated $7 billion to finance his personal businesses. Many of the victimized investors are from Baton Rouge and Lafayette. More on Nola.com [...] The U.S. Justice Department fund set up to help victims of Bernard Madoff’s Ponzi scheme received 51,700 claims seeking some of the $4 billion forfeited since the swindle collapsed. In total, the claims received by the April 30 filing deadline represent $40 billion lost to the fraud, said Richard Breeden, who was appointed to handle distributions. Many of the claims were filed by banks or fund managers who “are not generally eligible” to share in the forfeited money, Breeden said. He hasn’t yet reviewed the claims to throw out the defective ones, he said. More in The Blade [...] |
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