by Neil Campbell
By 1991, confidence in the integrity of the UK’s corporate financial reporting and accountability practices reached a new low. In response, the United Kingdom’s (“UK”) Financial Reporting Council (“FRC”) empanelled a committee with the remit of reviewing the aspects of UK corporate governance underlying the crisis. The completed report, “The Financial Aspects Of Corporate Governance,” became more popularly known as the Cadbury Report, after the committee’s chairman Sir Adrian Cadbury. Welcomed by a public wearied by high-profile corporate scandals, the report and its recommendations caused consternation in financial institutions.
by Patrick J. Medeo
In the spring of 2008, the hot topic quickly became financial institutions’ relentless manipulation of the London Interbank Offered Rate (“LIBOR”) for the United States Dollars (“USD”), Yen, and other currencies. Now, nine years later, big banks are still fighting anti-trust and criminal lawsuits arising from the scandal. In fact, there is renewed interest as litigation continues to be a fierce battle. Following revelations to authorities that nearly all LIBOR panel banks had been manipulating one of the most important benchmark interest rates, a flurry of lawsuits led to the discovery that banks had reaped hundreds of millions, if not billions, of USD in illicit gains.
by Jacob Shulman
In response to market manipulation the Securities and Exchange Commission (the “Commission”) has adopted Rule 613, creating the Consolidated Audit Trail (“CAT”). The rule mandates that Self-Regulatory Organizations (“SROs”) such as each national securities exchange, the Financial Industry Regulatory Authority (“FINRA”), and their respective members provide details to a central repository. Years in the making, the primary goal of the CAT is to allow regulators to efficiently and accurately track a trade throughout its life cycle, linking all activity throughout the U.S. markets in National Market System (“NMS”), securities. NMS is the national system for trading equities in the United States, which includes the facilities and entities used by broker-dealers to fulfill trade orders. At each stage in a trade’s lifecycle, there are risk levels and opportunities for illegal trading activity that the Commission seeks to mitigate. The CAT system hopes to “connect the dots” in order to spot illegal activity. With the incorporation of CAT, trade data will be ready for review by regulators by T+5. For example, trade data from a given Monday must be entered into the CAT system by 8a.m. the following morning (Tuesday morning). This will give the CAT surveillance team an opportunity to review the data for errors, and afford the industry member an opportunity to rectify any errors. By T+4, Friday, the industry member will submit corrected data, which will be ready for review the following day. The new CAT system will require daily reports of trade data. These reports will include customer information, accounts of record, quotes sent to the exchange (with time stamps from members), and execution data. The reporting change is onerous and much more expansive than before because now all listed options such as market-making quotes, and clearing allocations, are required to be reported into CAT. Now, options traders, like Susquehanna International Group, Citadel, and DRW, will be subject to more scrutiny, and regulators will have better access to options trading data.
By: Amanda Navarro
The old adage “opposites attract” proved true with this summer’s biggest merger between Whole Foods Market, Inc., (“Whole Foods”), and Amazon.com, Inc., (“Amazon”). In June of 2017, Amazon announced its intentions to buy Whole Foods Market, Inc., the national supermarket chain based in Austin, Texas. By August, Whole Foods shareholders sealed their fate by approving the $17.3 billion-dollar merger with Amazon. So far, the deal appears to be a successful venture for both companies. The merger has not only aided a struggling Whole Foods, but also added even more strength to the dominant Amazon powerhouse. However, skeptics have been quick to question the lasting success of the merger. Considering the distinct pricing strategies of both companies, analysists are uncertain as to whether the “everybody wins” mentality will translate into a reality.
Bruce A. Ortwine
Introduction: Corporate law means so many things that the term can be confusing to the uninitiated (as well as to the initiated). The following is intended to alleviate some of this confusion. It is based on my own personal experience as a “corporate lawyer.” Others surely have had experiences that would include many other aspects of corporate law that I have not experienced and that would further demonstrate the vast scope of this field of the law.
By: Richard Cogan
During the final weeks of the Obama Administration, outgoing Federal Communications Commission (“FCC”) Chairman Tom Wheeler adopted a major internet privacy rule mandating greater privacy protection of consumer data by Internet Service Providers (“ISPs”). The most significant provision of this regulation is the Opt-In provision (the “ISP Privacy Rule”), which requires consumers to provide informed consent before ISPs can collect and use contextual user data for advertising and other purposes . Another major provision (the “ISP Security Rule”) was scheduled to go into effect March 3rd and required ISPs to take “reasonable steps” to protect customer’s proprietary information from unauthorized use, disclosure, or access.