The Resolution Law Group: Lawmakers Address Securities Bills Regarding Audit Rotation Requirements, Dodd-Frank, M & A Business Broker Registration, & Senior Fraud

New Bill Pushes to Modify Registration of Certain Brokers Involved in Mergers & Acquisitions
A newly introduced bill in the US House of Representatives is seeking simplified registration with the Securities and Exchange Commission for brokers that facilitate acquisition and mergers for private companies with yearly earnings below $25 million and annual gross revenues of under $250 million. Currently, these brokers have to register as broker-dealers with the SEC and seek FINRA membership, but many of them don’t know about these requirements. The bill would exempt these broker-dealers from

Having to become a FINRA member, which means they would not be subject to regulation under the SRO. HR 2274 would amend 1934 Securities Exchange Acts Section 15(b). It seeks to lower regulator expenses of sellers and buyers of privately held companies that are smaller and need professional business brokerage services.

Lawmakers Move Forward Bills that Tackle Dodd-Frank Act
Meantime, the House Financial Services Committee has voted to move three bills dealing with Dodd-Frank Wall Street Reform and Consumer Protection Act mandates and another bill that would prohibit the Public Company Accounting Oversight Board from making public companies rotate auditors. Committee Chairman Jeb Ensnarling (R-Texas) said that while Dodd-Frank is supposed to push for “Wall Street reform,” it is now clear that several provisions are proving too expensive for thousands of public companies that didn’t play any part in the economic crisis.

HR 1105 would allow for greater flow of public capital while no longer requiring 98% of private equity funds to have to pay the expense of registering with the SEC. The second bill, HR 1135 would repeal the Dodd-Frank requirement that public companies have to reveal the median income of everyone that works for them (except for the CEO’s), the CEO’s salary, and the ratio for both. HR 2374 would make the SEC promulgate a rule unifying broker-dealers and advisers under a uniform fiduciary standard before the US Labor Department amends its rules about the term “fiduciary.” Meantime, HR 1564 would prevent the PCAOB from making companies rotate auditors or require that specific auditors perform the audits.

New Bill Would Mean Tougher Penalties for Senior Fraud Perpetrators
In the US Senate, Sen. Robert P. Casey Jr. (D-Pa.) has introduced S. 1185, which would amend the 1933 Securities Act, the 1940 Investment Company Act, the 1934 Securities Exchange Act, and the 1940 Investment Advisers Act. If passed into law, the SEC would be paid get up to another $50,000 penalty for violations of these acts that implicate seniors in the 62 and over age group. As Casey pointed out, seniors are represented disproportionately in all fraud cases. He said that it is necessary to make the consequences harsh to discourage financial scammers. S. 1185 also tells the US Sentencing Commission to look at and modify its guidelines to make sure that appropriate punishment is meted out for violations of criminal securities law.

If you are the victim of institutional investor fraud, do not hesitate to contact The Resolution Law Group right away to ask for your free case evaluation. http://www.TheResolutionLawGroup.com

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

 

The Resolution Law Group: Lawmakers Tackle Investment and Securities Matters

US Senators John Thune (R-SD), Richard Burr (R-NC), and Tom Coburn (R-Okla) have introduced a bill that would mandate that public pension plans reveal more information about the way they calculate liabilities and assets or place at risk the favorable tax treatment for bonds that are issued by the states and cities. S. 799 is a companion legislation to a bill that was recently unveiled in the US House of Representatives.

Like S. 799, SRLR 710 would make pension plans notify the Treasury Department about what assumptions and methods they use to determine assets, debt, and liabilities. Failure to abide by these tougher disclosure requirements would lead to the revocation of tax exemptions for specific bonds put out by municipalities and states. The senators’ bill also would prohibit federal bailout for any public pension funds.

Another Republican, Rep. Ann Wagner from Missouri, recently presented HR 1626, which would prohibit the Securities and Exchange Commission from being able to make companies reveal their political spending. The legislation, co-sponsored by Rep. Scott Garrett (R-N.J.), would amend the 1934 Securities Exchange Act.

It was nearly two years ago that a group of law professors petitioned the SEC to mandate the disclosure of how much companies allot toward political spending. Many have called on the Commission to push such rulemaking forward. However, some Republicans believe that ordering this type of disclosure exceeds the bandwidth of the SEC’s mission, which they say doesn’t include discretionary rules.

Political spending by companies is also an issue that Rep. Michael Capuano (D-Mass.) and Sen. Robert Menendez (D-N.J.) are tackling. Their bills, HR 1734 and S. 824, would mandate that companies get majority shareholder approval before they can use funds for political contributions and notify the SEC of such spending. Corporate shareholders would have to approve an “overall political budget.”
Both men introduced similar bills during the 112th Congress with no success.

In other news, Rep. Louise Slaughter (D-N.Y.) is requesting that law firm Greenberg Traurig LLP to disclose what its relationships are in the political intelligence industry because of allegations that the firm may have communicated market-moving data about Medicare Advantage to Height Securities, a political intelligence firm. Height Securities then allegedly passed the information on to certain clients and several insurers’ shares reportedly went soaring.

Slaughter, who introduced the original draft of the Stop Trading on Congressional Knowledge Act in 2006, made the request to Greenberg Traurig CEO Richard Rosenbaum in writing. A spokesperson for the law firm says that it no longer has a relationship with Height and that Greenberg Traurig has since concluded that providing government relations services to those in political intelligence can lead to unintended use of such services.

Meantime, Representatives Carolyn Maloney from New York and Maxine Waters from California, two other Democratic lawmakers, are asking the lawmakers tasked with appropriations to make sure that the funding the SEC receives for the next fiscal year is $1.674 billion, which is what President Barack Obama also wants. Their letter, signed by 51 other lawmakers, noted how it is imperative that Congress “fully fund” the regulator so that effective rulemaking and proper oversight of the securities market can happen.

The Resolution Law Group represent investors throughout the US.  For over two decades, The Resolution Law Group has helped thousands of investors recoup their investment losses by going through arbitration via FINRA, NYSE, NASD, and AAA, as well as through the state and federal courts.  Visit our website http://www.TheResolutionLawGroup.com

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

Ex-Employer Wants Would-Be Whistleblower’s Appeal Dismissed In Light of the US Supreme Court’s Ruling Over Alien Tort Statute Claims

In light of the US Supreme Court’s decision in Kiobel v. Royal Dutch Shell Petroleum Co., the attorney for GE Energy (USA) wants the Court of Appeals for the Fifth Circuit to dismiss would-be whistleblower Khaled Asadi’s appeal to have his lawsuit, contending that his firing violates the protections provided to him under the 2010 Dodd-Frank Act, reinstated. Asadi filed his complaint against the company last year claiming that his former employer had violated the whistleblower anti-retaliation provisions. The dual Iraqi and US citizen says that he was let go from his job after he told GE Energy’s ombudsman and his supervisor about a hiring situation that could violate the Foreign Corrupt Practices Act.

A district court, however, threw out his case, finding that, per the Supreme Court’s ruling in Morrison v. National Australia Bank Ltd., applying the anti-retaliation provisions to behavior that happened abroad is precluded. Asadi then went to the Fifth Circuit, arguing that Dodd-Frank protects employees that report violations of any rule, law, or regulation that is under SEC jurisdiction. He claims that these protections extend to US citizens who work abroad and report information about securities violations.

Asadi believes that the way Dodd-Frank incorporates the FCPA supports his claim that the whistleblower protections do have “extraterritorial applicability.” He noted that the anti-corruption statute has a “clear statement rule” that is applicable to individuals and companies outside the US.

In the Kiobel ruling, the justices voted to affirm the dismissal of the Alien Tort Statute claims submitted by Nigerian nationals against certain British, Nigerian, and Dutch companies over the alleged aiding and abetting of the Nigerian government in numerous law of nations violations, including torture and extrajudicial killings. Chief Justice Roberts wrote that the presumption against extraterritoriality can apply to ATS claims and that there is nothing in the statute that successfully counters this presumption. Now, GE Energy’s legal representation contends that like the Supreme Court’s ruling in Kiobel, the district court’s decision in this case also depended on the presumption against extraterritoriality.

Please contact our institutional investment fraud law firm to find out whether you have a securities case.

If you suspect that your institution is the victim of investment fraud, do not hesitate to email or call please contact The Resolution Law Group at (203) 542-7275 for a confidential, no obligation consultation. Our investment fraud attorneys are here to help institutional investors recoup losses that are a result of a financial scam or negligence. Your consultation with us is free

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

SEC Roundup: Number of Securities Cases Brought Against Attorneys Rises, Permission Granted to Announce Material Information Via Social Media, & Clearing Agency Rulemaking Process Gets Streamlined

Under Rule of Practice 102(e), SEC to File More Securities Cases Against Lawyers

According to the Commission, it intends to bring even more cases against lawyers under its Rule of Practice 102(e). The amount cases had already gone up in the wake of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and the 2002 Sarbanes-Oxley Act. Now, the regulator’s Office of the General Counsel is getting referrals from its Enforcement Division about possible lawyer misconduct.

The cases being brought generally involve alleged securities violations, such as active involvement in financial fraud and the obstruction of probes, with judgment errors and close calls not included. Per rule 102(e), the SEC can bar or censure individuals from practicing or appearing before it for different reasons. Some attorneys, however, are worried about the way the regulator interprets the rule, such as what ‘active participation’ in fraud actually entails. There are also concerns that the rule could be used as a “tactical tool” against attorneys.
Social Media Now An Avenue for Announcing Material Information
The Securities and Exchange Commission says that companies can now use social media to make material information announcements, as long as investors are notified which sites to go to for this data. This is the first time that the subject of Regulation Fair Disclosure to corporate information published on social media sites was directly addressed. The announcement was issued in a rare report pursuant to the 1934 Securities Exchange Act’s Section 21(a).

The report was spurred by Netflix Inc. (NFLX) CEO Reed Hastings’s Facebook post June 2012 announcing that subscribers had experienced more than 1 billion hours of content. The SEC later sent a Wells notice to the company saying that the information should have been disclosed through other avenues. However, following an investigation, the regulator discovered that there has been uncertainty over the way Regulation FD and the Commission’s 2008 Guidance applies to disclosures that take place through social media.
Clearing Agency Rulemaking Process Gets Streamlined
The SEC has finalized a rule that streamlines the rulemaking process for clearing agencies that are registered with both the regulator and the Commodity Futures Trading Commission. The 1934 Securities Exchange Act’s rule 19b-4 amends an interim rule that lets SRO rule changes go into effect upon filing, as long as the proposed modifications are not related mainly to securities futures and they don’t impact the securities clearing operations of the agencies.

The latest amendments bring non-securities products, including security-based swaps and swaps that aren’t mixed, under the umbrella of the interim rule. The final rule is supposed to make sure that the clearing agencies involved don’t have to deal with unnecessary delays in implementing changes to rules that primarily involve non-security products and that modifications are filed with the SEC.

If you, your family, friends, neighbors or associates suspect that your financial losses are a result of institutional investor fraud, please contact, please contact The Resolution Law Group at (203) 542-7275 for a confidential, no obligation consultation.

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Federal Workers’ Privacy Rights if STOCK Act Provision Mandating Online Disclosure of Financial Data Goes Into Effect, Says District Court Judge

In Senior Executives Association v. United States, U.S. District Court for the District of Maryland Judge Alexander Williams said that the privacy rights of thousands of senior federal workers could be violated if a Stop Trading on Congressional Knowledge Act provision, which mandates that these employees’ financial information is disclosed online, goes into effect.

The court noted that exposure from disclosure online is greater than what existed under the old regime of disclosure. Under the old requirements, per the Ethics in Government Act, federal employees’ financial reports had to individually requested, while the requestor had to name itself. Information about the legal parameters of use was provided.

Meantime, a Congressionally mandated study, which was recently released, reports that broad online disclosure of government workers’ financial data is possibly dangerous and should be indefinitely delayed. Conducted by a National Academy of Public Administration panel, “An Independent Review of the Impact of Providing Personally Identifiable Financial Information Online” found that the STOCK Act‘s disclosure requirement could hurt federal agency missions, as well as workers. Among the worries brought up: possible identity theft and potential exploitation by foreign intelligence services and others. There were also concerns that access to what has normally been private financial formation, including debt and other financial losses, could now be used to suss out who might be most vulnerable to bribes and other financial inducements. The study recommends that lawmakers indefinitely suspend this provision.

Noting that only approximately 450 financial reports for senior federal employees were sought over two years under the old disclosure regime, Judge Williams suggested that the privacy of over 28,000 workers eclipses the privacy loss “associated with” the old system.

“The goal of the legislation was to place the same type restrictions on Congresspersons and Senators, their staff, and other government workers that the rest of us face: No trading on insider information!” Said Securities Lawyer William Shepherd. “Folks in Washington get lots of inside information, such as how laws will effect companies, who is getting government contracts, etc. This is information we could all get rich on – and many do! So, what happens when one writes a law to prevent themselves from an unfair advantage over you and me? Well, they could write a law that is unconstitutional so the courts will throw it out. This way, they appear to be taking action – but nothing happens in the long run. The result is that they can keep making money unfairly without worrying about breaking the law.”

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