• Greek Debt Swap.

On March 9th, Greece's creditors agreed to take cents on the euro in the biggest debt write down in history, providing much-needed breathing room for European nations living beyond their means. Debt Swap. See also, The BBC's Q&A on how the deal should work and what to expect next.

• El Paso Corp. Deal Exposes Conflict Issues.

On March 7th, the Wall Street Journal reported that El Paso was advised by the law firm Wachtell, Lipton, Rosen & Katz not to retain Goldman Sachs. If this is true, it will be yet another cautionary tale lawyers can use to get their clients to listen. A number of voices shared their take on this issue. For example, see BusinessWeek, Felix Salmon's blog for Reuters, and Dealbook.

• Towing the line.

Treasury Secretary Timothy Geithner found himself leading the news pages twice this week. On March 5th, a Forbes op-ed portrays the Treasury Secretary as doing the administration's bidding by perpetuating the "myth" that the source of the crisis was a lack of regulation.

• Geithner Sees Infrastructure as Key to Economic Growth.

On March 8th, the Wall Street Journal covered Treasury Secretary Geithner's visit to the Dallas Chamber of Commerce. Geithner focused on three main points; infrastructure investment, continued work on the Volcker Rule, and how gradual appreciation of China's yuan is already helping U.S. competitiveness.

• Questions Lead to Five-year Ordeal.

On March 5th Bloomberg related the ordeal of Theodore Urban, who is general counsel at Ferris, Baker Watts Inc. Urban spotted and questioned a broker's suspicious trading patterns in 2007, triggering a five-year probe by U.S. regulators who said he failed as a supervisor. Ordeal.

• Volcker Mania.

This week brought a continuing parade of opinions about the much ballyhooed Volcker rule. On March 5th, Reuters focused on the Volcker Rule's supposed threats to sovereign debt liquidity. Also on March 5th, Reuters reported on the SEC's Republican commissioner Dan Gallagher's reservations about market disruptions and competitiveness. On March 6th, The Hill summarized Chairman Schapiro's testimony as she lamented the slow progress in the implementation of the Volcker rule.

• Fallout from Stanford Conviction.

Allen Stanford's conviction on March 6th in a $7 billion fraud case, has inspired a variety of views and ideas about punishment and restitution. Reuters reported on Louisiana Senator David Vitter's criticism that the SIPC Fund is failing to help Stanford's victims. On March 8th, Reuters reported that a jury found that Stanford should forfeit some $330 million stashed in foreign bank accounts. On March 8th Forbes reported on the current state of affairs that has allowed these Ponzi schemes to flourish.

• Proposed Bill Would Limit Federal Reserve's Bond Purchases.

On March 2nd, Reuters reported that Congressman Kevin Brady will introduce a bill limiting the types of bonds the Federal Reserve would be allowed to buy. Brady Bill.

• The Battle over Physical Commodities.

On March 2nd, Reuters summarized what is at stake in the battle between the Federal Reserve Board and the largest banks over whether the banks will be allowed to keep their physical commodity trading units. Battle.

• FRB Releases Action Plans for Supervised Financial Institutions.

On March 8th, the Federal Reserve Board released action plans for three supervised financial institutions to correct deficiencies in residential mortgage loan servicing and foreclosure processing. The three institutions are HSBC North America Holdings, Inc., Ally Financial Inc., and IMB HoldCo. LLC. FRB Press Release.

• FinCEN Analysis of Casino SAR.

On March 8th, the Financial Crimes Enforcement Network (FinCEN) reported filings of suspicious activity reports by casinos and card clubs (SAR-Cs), which grew annually from 2004 to 2010, a period when gaming activities also continued to expand. FinCEN News Release.

• FinCEN Releases Third Quarter 2011 Mortgage Loan Fraud SAR Update.

On March 5th, FinCEN announced the release of its MLF Suspicious Activity Report (SAR) for the third quarter of 2011. The report shows a 20% increase in the number of SARs filed in the third quarter of 2011 over the third quarter of 2010. FinCEN News Release.

• FDIC Announces a Quick Guide for Consumers on Credit, Debit and Prepaid Cards.

On March 5th, the FDIC issued a guide to help consumers understand the differences between debit, credit and prepaid cards. FDIC Press Release.

• Federal Reserve Board Issues Guidance on Evaluating Whether Banks are Eligible for Upgrades of Supervisory Ratings.

On March 2nd, the Federal Reserve Board issued guidance to ensure that supervisors apply consistent standards as they evaluate whether banking organizations with $10 billion or less in assets are eligible for upgrades of supervisory ratings. Federal Reserve Board Press Release.

• Federal Reserve Board Extends Comment Period for Proposed Enhanced Prudential Standards.

On March 2nd, the Federal Reserve Board extended to April 30, 2012, the period in which comments may be submitted in response to a proposed rule implementing the enhanced prudential standards and early remediation requirements in the Dodd-Frank Act. The proposed rule affects a wide range of measures addressing issues such as capital, liquidity, single counterparty credit limits, stress testing, risk management, and early remediation requirements. Federal Reserve Board Press Release.

• Treasury Announces Pricing of Public Offering of AIG Common Stock.

On March 8th, the U.S. Department of the Treasury announced that it has agreed to sell 206,896,552 shares of its American International Group common stock at $29.00 per share. The aggregate proceeds to Treasury from the common stock offering are expected to be approximately $6.0 billion. Treasury Press Release.

• Termination of Enforcement Action with Sterling Financial.

On March 8th, the U.S. Department of the Treasury announced the termination of the enforcement action against Sterling Financial Corporation, Spokane, Washington. Treasury Press Release.

• Treasury Designates Iranian Qods Force General Overseeing Afghan Heroin Trafficking Through Iran.

On March 7th, the U.S. Department of the Treasury designated Iranian Islamic Revolutionary Guard Corps Qods Force (IRGC-QF) General Gholamreza Baghbani as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act). This is the first use of the Kingpin Act against an Iranian official. Treasury Press Release.

• FinCEN Reminds of SAR Confidentiality.

On March 2nd, the Financial Crimes Enforcement Network ("FinCEN") issued an Advisory reminding financial institutions, and in particular, the lawyers that advise them, of the requirement to maintain the confidentiality of Suspicious Activity Reports ("SARs"). FinCEN is concerned that an increasing number of private parties, who are not authorized to know of the existence of filed SARs, are seeking SARs from financial institutions for use in civil litigation and other matters. Financial institutions, and their current and former directors, officers, employees, agents, and contractors, are prohibited from disclosing SARs, or any information that would reveal the existence of a SAR. Financial institutions, and their current and former directors, officers, employees, agents, and contractors could be subject to civil and criminal penalties for the unauthorized disclosure of a SAR.

• Identity Theft Red Flags Rules.

On March 6th, The Commodity Futures Trading Commission ("CFTC") and the Securities and Exchange Commission ("SEC") are jointly issuing proposed rules and guidelines to implement new statutory provisions enacted by Title X of the Dodd-Frank Act. These provisions amend section 615(e) of the Fair Credit Reporting Act and direct the SEC and CFTC to prescribe rules requiring entities that are subject to each commission's jurisdiction to address identity theft. 77 FR 13450.

• Financial Regulators "Paralyzed."

On March 8th CNBC interviewed the always candid Bart Chilton, CFTC Commissioner, who argued that Wall Street banks are using the threat of lawsuits to prevent regulators from writing rules mandated by the Dodd-Frank Act. Chilton Interview.

• Congressional Calls for CFTC Crackdown.

On March 5th, Reuters reported that Democratic members of Congress have urged the futures regulator to crack down on excessive speculation in oil markets. Speculation.

• Swap Dealer Threshold is Raised.

On March 2nd, Reuters reported the CFTC may raise to $3 billion, the threshold for a firm to be designated a swap dealer. The agency had planned to vote on swap dealer definitions on March 9, 2012, but the vote was delayed at the request of the SEC. Swap Dealer.

• "Please Listen Carefully, Some Menu Options Have Changed."

On March 8th, Commissioner Bart Chilton addressed Trade Tech 2012, on financial reform, focusing primarily on position limits and the use of cost-benefit-analyses in rulemaking. Chilton Remarks.

• Swaps Market Reforms.

On March 2nd, CFTC Chairman Gary Gensler gave an address at George Washington University Law School summarizing the CFTC's role in implementing the Dodd-Frank Act's mandates regarding the swaps market. Gensler focused on three goals: increasing transparency, containing risk, and enhancing market integrity. Gensler Remarks.

• Rules of Organization; Conduct and Ethics; and Information and Requests.

Effective March 7, 2012, the Securities and Exchange Commission ("SEC" or "Commission") is making technical amendments to the rule under which former members and employees of the Commission are required to file with the Commission a statement concerning their practice outside the government. SEC conduct rule 8(b) requires that any former member or employee of the Commission who, within two years of leaving the SEC, is employed or retained in any matter in which or she will appear before the Commission, file a statement with the SEC regarding that representation. The Commission is adopting a technical amendment to require that rule 8(b) submissions be sent to the Office of the Ethics Counsel rather than the Secretary of the Commission, and provide a means of filing a statement electronically. 77 FR 13490.

• Chairman Schapiro Defends Budget Request.

On March 6, Chairman Mary Schapiro testified before the House Committee on Appropriations on how the SEC would make use of the $1.56 billion that is requested for the coming year. The FY 2013 request represents an increase of $245 million over the agency's FY 2012 appropriation. The funding request would be fully offset by matching collections of fees on securities transactions. Schapiro Remarks.

• Commissioner Gallagher on Ongoing Regulatory Reform.

On March 5th, SEC Commissioner Daniel M. Gallagher, addressing the Annual Conference of the Institute of International Bankers, discussed the SEC's contributions to recent regulatory reform efforts, including the Volcker Rule. Gallagher discussed the IIB's February 13th comment letter to the six regulators constituting the joint rulemaking body on the Volcker Rule. Gallagher also spoke about the unique structure of the Financial Stability Oversight Council and its powers. IIB Remarks.
On March 8th, Commissioner Gallagher gave the keynote address at the Investment Adviser Association's 2012 Investment Adviser Compliance Conference, where he discussed the challenges of implementing the Dodd-Frank Act and its affect on, and possible conflict with, how the SEC carries out its individual mission. IAA Remarks.

• Amendments to Rules Relating to the Credit Default Swap Guaranty Fund are Approved.

On March 2nd, the SEC approved the Chicago Mercantile Exchange's proposed replacement of its "aggregate performance bond requirement" standard, which determines how CME calculates each CDS Clearing Member's allocation to the CDS Guaranty Fund, with a new standard that CME believes better allocates tail risk. Currently CME rules provide that each CDS Clearing Member's allocation to the CDS Guaranty Fund will be the greater of (i) $50,000,000 and (ii) its proportionate share of the 90-day trailing average of its aggregate performance bond requirements and average gross notional open interest outstanding at the Clearing House. The amendments change the CDS Guaranty Fund so that the allocation will be made on the basis of each CDS Clearing Member's potential residual loss ("PRL"). PRL is a stress test of the tail risk CDS Clearing Member portfolios bring to the market. SEC Release No. 34-66506.

• FINRA Requests Comment on Proposed Amendments to NASD Rule 2340 to Address Values of Unlisted Direct Participation Programs and Real Estate Investment Trusts.

On March 7th, FINRA published a Regulatory Notice seeking comment on a revised proposal to amend NASD Rule 2340 (Customer Account Statements) to address the per share estimated values at which unlisted Direct Participation Programs (DPPs) and unlisted Real Estate Investment Trusts (REITs) are reported on customer account statements. FINRA Regulatory Notice 12-14.

• SEC Approves FINRA Proposed Rules Amending and Extending the Implementation of FINRA Rule 4240.

On March 7th, the SEC granted accelerated approval to two proposed rule changes filed by the Financial Industry Regulatory Authority, Inc relating to credit default swaps. One amended FINRA Rule 4240 (Margin Requirements for Credit Default Swaps), and one extended the implementation of FINRA Rule 4240. Publication is expected in the Federal Register during the week of March 12th. SEC Release 34-66527 and SEC Release 34-66528.

• FINRA Rule Relating to TRACE Reporting Rules Becomes Effective.

On March 5th, a proposed rule change filed by the Financial Industry Regulatory Authority, Inc. to allow FINRA to grant exemptions from reporting obligations under the Trade Reporting and Compliance Engine ("TRACE") reporting rules for certain alternative trading systems became effective. Publication is expected in the Federal Register during the week of March 5. SEC Release 34-66513.

• Initial Margin Rule Proposed.

On March 1st, the SEC provided notice of ICE Clear Credit's filing of a proposed rule change that would allow clearing participants to satisfy the initial margin-related liquidity requirements for client-related positions cleared in a clearing participant's customer account origin by posting U.S. Treasuries. Comments should be submitted on or before March 28, 2012. SEC Release No. 34-66500.

• MSRB Files Rules Relating to Short-Term Obligation Rate Transparency System.

On March 6th, the SEC issued a notice of filing of a proposed rule change by the Municipal Securities Rulemaking Board consisting of establishment of a subscription to historical information and documents submitted to the MSRB's Short-Term Obligation Rate Transparency System. Publication is expected in the Federal Register during the week of March 5th. SEC Release 34-66521.

• MSRB Files Rules Relating to Electronic Municipal Market Access System.

On March 6th, the SEC issued a notice of filing of a proposed rule change by the Municipal Securities Rulemaking Board consisting of establishment of historical data subscription from submissions to the MSRB Electronic Municipal Market Access System ("EMMA"). Publication is expected in the Federal Register during the week of March 5th. SEC Release 34-66522.

• SEC Grants Immediate Effectiveness to NASDAQ Proposal Relating to BOX Rules.

On March 5th, the SEC issued notice of filing and immediate effectiveness of a proposed rule change filed by NASDAQ OMX BX, Inc. to amend Chapter V, Section 26 of the BOX Rules. Publication is expected in the Federal Register during the week of March 5th. SEC Release 34-66512. Exhibit 5.

• SEC Designates Longer Period to Act on Proposed Alternative Bid Price.

On March 1st, the SEC extended to April 19, 2012, the period in which it will act on the NASDAQ Stock Market's proposed adoption of an alternative to the $4 initial listing bid price requirement for the Nasdaq Capital Market of either $2 or $3, if certain other listing requirements are met. SEC Release No. 34-66499.

• Amendments to Registration and Qualification Requirements are Proposed.

On March 1st, the SEC provided notice of NASDAQ INX OHLX's filing of a proposed rule change that would extend the principal and representative registration requirements of Rule 604(g) and (h) to all members, member organizations and associated persons by adopting Rules 611-616 to replace Rule 604. As a result of the new registration requirements, additional persons will become subject to the Exchange's continuing education requirement in Rule 640. Comments should be submitted on or before March 28, 2012. SEC Release No. 34-66497.

• Collection Company Errors Violated FDCPA.

A woman brought a Fair Debt Collection Practices Act claim against a collection company that had repeatedly stated in letters to her that she owed treble damages, interest and legal fees under California law, even though her bounced checks had been written at a Nevada casino. On March 8th, the Ninth Circuit affirmed a grant of summary judgment to the plaintiff, holding that the collection company made false statements in violation of the FDCPA because Nevada law applied and Nevada law does not permit the charging of interest or fees by the collection company and also caps treble damages. Cruz v. International Collection Corp.

• Arbitration Clause With Unilateral Right to Recover Expenses Conscionable Under Georgia Law.

Plaintiffs sued Regions Bank, claiming that the collection of overdraft charges under the bank's deposit agreement violated federal and state law. The bank sought to compel arbitration under an arbitration clause in the agreement. The district court denied the motion because the arbitration clause was substantively unconscionable under Georgia law. On March 5th, the Eleventh Circuit reversed, holding that a provision granting the bank the unilateral right to recover its expenses for arbitration was conscionable under Georgia law. In Re: Checking Account Overdraft Litigation.

• Second Circuit Certifies Long-Arm Statute Questions to N.Y. Court.

Israeli residents who were injured, or had family injured, by Hezbollah attacks sued a Lebanese bank under U.S. statutes and Israeli law, claiming the bank aided Hezbollah by conducting the organization's financial transactions. The Lebanese bank maintains an account at AmEx Bank in New York to facilitate wire transfers. The district court held that the New York account was not enough to establish personal jurisdiction under New York's long-arm statute. On March 5th, the Second Circuit concluded that there insufficient New York authority on the issue and so certified questions to the New York Court of Appeals regarding whether the claims "arise from a transaction of business" in New York. Licci v. Lebanese Canadian Bank.

• Investment Adviser Performance Compensation - Effective May 22, 2012.

The Securities and Exchange Commission ("SEC") is adopting amendments to the rule under the Investment Advisers Act of 1940 that permits investment advisers to charge performance based compensation to "qualified clients." The amendments revise the dollar amount thresholds of the rule's tests that are used to determine whether an individual or company is a qualified client. These rule amendments codify revisions that the SEC recently issued by order that adjust the dollar amount thresholds to account for the effects of inflation. In addition, the rule amendments: provide that the SEC will issue an order every five years in the future adjusting the dollar amount thresholds for inflation; exclude the value of a person's primary residence and certain associated debt from the test of whether a person has sufficient net worth to be considered a qualified client; and add certain transition provisions to the rule. 77 FR 10358.

• Capital Requirements for Insurance Companies That Are Savings and Loan Holding Companies and the "Collins Amendment."

Insurance companies are subject to state insurance regulation that includes capital requirements generally imposed under uniform regulations based on capital standards adopted by the National Association of Insurance Commissioners. Briefing.

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