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The Newman-Chiasson Insider Trading Case Reinforces the Need for Change

The recent reversal of convictions of hedge fund managers Todd Newman and Anthony Chiasson highlights the weakness of using a common law approach when interpreting Rule 10b-5 to reach remote tippees accused of insider trading. The decision reinforces the need for a statutory approach to bar insider trading. A statutory approach is not a novel idea. Most jurisdictions around the world, including the UK and the other member states of the EU, have made insider trading a statutory offense that captures a wider range of conduct than does the US regime in its reliance upon Rule 10b-5. However, the introduction … Read more

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Shadow Banking: The Regulatory Landscape at the Dawn of 2014

In the wake of the 2008 crisis, it soon became apparent that the fault lines of the global financial system extended far beyond the regulated banking sector to the less regulated “shadow banking” sector.  Nonbank financial entities including (but not limited to) money market funds, special purpose vehicles, insurance companies, and asset management firms, engaged in activities analogous to traditional bank deposit taking and lending, such as securities lending, repurchase agreements (“repos”), and securitization, yet were not subject to similar prudential regulations.  Failures at these institutions, which led to cascading failures throughout the financial system, prompted financial regulators to reevaluate … Read more

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Editor's Tweet: Shadow Banking: The Regulatory Landscape at the Dawn of 2014
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A Comparative Analysis of Shadow Banking Reforms by the FSB, USA and EU

The year 2013 is likely to be a watershed time in the development of shadow banking oversight and regulation. Of particular note are three upcoming developments: (1) the Financial Stability Board (the FSB) has commenced public consultations on its initial proposals and final recommendations are scheduled to be released in September 2013; (2) the USA will soon begin designating its first nonbank Systemically Important Financial Institutions (SIFIs), and will clarify its plans for regulating such entities in practice; and (3) the European Systemic Risk Board is preparing to recommend shadow banking oversight changes in early 2013. It is therefore an … Read more

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Editor's Tweet: Cleary's Ed Greene and Elizabeth Broomfield discuss their comparative analysis of shadow banking reforms by the FSB, USA, and EU.
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Binding Shareholder Say-on-Pay Vote in UK

In 2002, the UK began requiring an advisory shareholder vote on the annual executive and non-executive director compensation practices of UK-incorporated quoted companies (“UK Companies”). Eight years later, in July 2010, the US followed suit when President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), providing for an advisory say-on-pay vote for most large US public companies.

The UK government has now gone one step further by proposing to reform the approval process for director remuneration, including through the introduction of a binding shareholder vote for all UK Companies that must occur … Read more

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