• FTC Issues New Rules on Debt Relief Services.

On July 29th, the FTC issued new final rules prohibiting for-profit companies that sell debt relief services over the telephone from charging a fee before they settle or reduce a customer's credit card or other unsecured debt. The new rules also require debt relief companies to make specific disclosures to consumers; prohibit them from making misrepresentations; and extend the Telemarketing Sales Rule to cover calls consumers make to these firms in response to debt relief advertising. FTC Press Release; Fact Sheet.

• Regulators Discuss Establishment of New Consumer Financial Protection Bureau.

On July 29th, Reuters reported that Treasury Secretary Timothy Geithner, Federal Reserve Board Chairman Ben Bernanke, and the heads of the FDIC, FTC, OCC, OTS, NCUA, HUD and OMB met to discuss the Consumer Financial Protection Bureau. Meeting.

• Citigroup's Plans for Proprietary Trading.

On July 28th, Bloomberg summarized the options Citigroup Inc. is considering as it prepares to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act's provisions restricting proprietary trading. Options.

• Madoff Trustee May File Clawback Lawsuits.

On July 27th, Reuters reported that the court-appointed trustee overseeing the liquidation of Bernard Madoff Investment Securities may file clawback lawsuits against 1,000 former Madoff investors who received more money from the Ponzi scheme than they contributed. Clawback Lawsuits. On July 29th, Reuters reported that the trustee has filed suit against three entities affiliated with the Madoff family. Family Lawsuits.

• Lobbyists Recruiting Former Agency Officials.

On July 27th, the New York Times reported that lobbying firms are actively recruiting former federal agency officials as efforts to influence the rulemaking required to implement the Dodd-Frank Act intensify. Lobbyists.

• Law Firms Address Financial Regulatory Reform.

On July 26th, the Washington Post reported on the practice groups created by law firms to track and monitor the Dodd-Frank Act, and the rules that will be promulgated thereunder. Practice Groups.

• WaMu Bankruptcy Examiner Appointed.

On July 26th, Reuters reported a former member of the Justice Department's criminal fraud unit, Joshua Hochberg, has been named bankruptcy examiner for Washington Mutual. Appointment.

• Basel Committee Reaches Consensus.

On July 26th, the Basel Committee on Banking Supervision reached broad agreement on the overall design of the capital and liquidity reform package, including the definition of capital, the treatment of counterparty credit risk, the leverage ratio, and the global liquidity standard. BIS Press Release. On July 29th, the New York Times published an analysis of the Committee's work. Analysis. The Washington Post reported that the Senate Banking Committee and House Financial Services Committee will hold hearings on the Basel III proposal. Hearings.

• Federal Reserve Board Publishes 2011 TILA and HOEPA Disclosure Adjustment.

On July 30th, the Federal Reserve Board published its annual adjustment of the dollar amount of fees that triggers additional disclosure requirements under the Truth in Lending Act and the Home Ownership and Equity Protection Act of 1994 for home mortgage loans that bear rates or fees above a certain amount. The dollar amount of the fee-based trigger has been adjusted to $592 for 2011. The adjustment does not affect the rules for "higher-priced mortgage loans". Federal Reserve Board Press Release.

• Home Mortgage Disclosure Act Hearing Agenda.

On July 29th, the Federal Reserve Board announced the agenda and panelists for the August 5, 2010 public hearing on potential revisions to Regulation C, which implements the Home Mortgage Disclosure Act. Federal Reserve Board Press Release.

• Registration of Mortgage Loan Originators.

On July 28th, the federal banking agencies adopted final rules implementing the Secure and Fair Enforcement for Mortgage Licensing Act. The Act requires an employee of a bank, savings association, credit union or Farm Credit System institution, and certain of their subsidiaries, who acts as a residential mortgage loan originator to register with the Nationwide Mortgage Licensing System and Registry, obtain a unique identifier, and maintain the registration. The final rule further provides that Agency-regulated institutions must: require their employees who act as residential mortgage loan originators to comply with the Act's requirements to register and obtain a unique identifier, and adopt and follow written policies and procedures designed to assure compliance with these requirements. The final rule is effective on October 1, 2010. Compliance with the registration requirement is required within 180 days after the Registry begins accepting registrations, which could be as early as January 28, 2011. Joint Agency Press Release.

• Federal Reserve Board Seeks Nominations for Consumer Advisor Council.

On July 26th, the Federal Reserve Board announced that it is seeking nominations for appointments to its Consumer Advisory Council. The Council advises the Board on the exercise of its responsibilities under various consumer financial services laws and on other matters. Federal Reserve Board Press Release.

• FinCEN Releases Mortgage Loan Fraud Study.

On July 30th, the Financial Crimes Enforcement Network released its 2009 Mortgage Loan Fraud study which found the number of mortgage fraud suspicious activity reports filed in 2009 grew 4 percent compared with 2008. FinCEN also reported that in fourth quarter of 2009, mortgage fraud SAR filings increased 6 percent over the same period in 2008. FinCEN Press Release.

• Lebanon Sanctions Regulations.

On July 30th, the Treasury Department's Office of Foreign Assets Control published regulations implementing Executive Order 13441 of August 1, 2007, "Blocking Property of Persons Undermining the Sovereignty of Lebanon or Its Democratic Processes and Institutions." The new regulations are effective immediately. 75 FR 44907.

• FinCEN Adds Somali Language Brochures to List of MSB Resources.

On July 28th, the Financial Crimes Enforcement Network announced the availability of Somali language brochures to facilitate money services businesses' ability to more easily comply with the requirements of the Bank Secrecy Act. The materials cover BSA compliance obligations, currency transaction reporting, and suspicious activity reporting. FinCEN Press Release.

• New Phone Number and E-Mail Address for BSA Service Desk.

On July 27th, the Financial Crimes Enforcement Network announced that effective July 31, 2010, a new toll free number and email address should be used for accessing the Bank Secrecy Act Electronic Filing Service Desk. FinCEN Notice.

• CFTC Adopts Amendment Regarding the Operation of a Commodity Broker in Bankruptcy.

On July 29th, the CFTC announced that it adopted an amendment to its regulations regarding the operation of a commodity broker in bankruptcy. Under appropriate circumstances, as determined by the Commission, the amendment would permit the trustee of a commodity broker in bankruptcy to operate the business of such commodity broker in the ordinary course, including entering into new commodity contracts on behalf of customers. The amendment is effective 30 days after publication in the Federal Register. CFTC Release No. PR5864-10.

• No-Action Relief Granted Regarding Significant Price Discovery Contracts.

On July 27th, the CFTC Division of Market Oversight issued a no-action letter to the IntercontinentalExchange, Inc. confirming that the Division will not recommend that the Commission initiate enforcement action against ICE for failure to provide a written demonstration of compliance with the significant price discovery contracts core principle regime within 30 days of issuance of the CFTC's order deeming the Mid-C, PJM, and SP-15 contracts as SPDCs if ICE provides a written demonstration of compliance with the core principle regime for the three contracts by August 18, 2010. CFTC Letter No. 10-26.

• CFTC Designates Green Exchange as a Contract Market.

On July 22nd, the CFTC approved the application of Green Exchange, LLC for designation as a contract market. GreenEx will list for trading a broad variety of contracts for environmental risk management that are currently traded on the New York Mercantile Exchange. GreenEx will use CME's Globex electronic trade-matching system. Clearing services for GreenEx will be provided by CME Clearing House. Regulatory services for GreenEx will also be provided by CME. CFTC Release No. PR5859-10.

• Investment Adviser Act Amendments.

On July 28th, the SEC published the adopting release and text of amendments to Part 2 of Form ADV, and related rules under the Investment Advisers Act, to require investment advisers registered with the SEC to provide new and prospective clients with a brochure and brochure supplements written in plain English. The amendments are designed to ensure the provision of clearly written, meaningful, current disclosure of the business practices, conflicts of interest and background of the investment adviser and its advisory personnel. Advisers must file their brochures with the SEC electronically, and the SEC will make them available to the public through its website. The SEC also withdrew Advisers Act rule 206(4)-4 requiring advisers to disclose certain disciplinary and financial information. The amendments are effective 60 days after publication in the Federal Register, which is expected during the week of August 2. SEC Release No. IA-3060.

• Amendments Regarding Interim Commission Review of PCAOB Inspection Reports.

On July 27th, the SEC published the adopting release and text of a rule to facilitate interim Commission review of PCAOB inspection reports under Section 104(h) of the Sarbanes-Oxley Act, and to delegate authority to the Chief Accountant related to these reviews. The Commission is also establishing a subpart in its Informal and Other Procedures - Regulation P - to include procedural rules relating to the PCAOB. The new rule and rule amendments are effective 30 days after publication in the Federal Register, which is expected during the week of August 2. SEC Release No. 34-62575.

• SEC Seeks Comments on Conducting Fiduciary Duty Harmonization Study.

On July 27th, the SEC requested public comment for a study to evaluate the effectiveness of existing legal or regulatory standards of care for brokers, dealers, investment advisers, and persons associated with them when providing personalized investment advice and recommendations about securities to retail investors; and whether there are gaps, shortcomings or overlaps in legal or regulatory standards in the protection of retail customers relating to the standards of care for these intermediaries. Comments should be submitted on or before August 30, 2010. SEC Press Release.

• SEC Establishes Comment Page for Upcoming Rulemaking.

On July 27th, the SEC announced that it is making it easier for the public to provide comments as the agency sets out to make rules required under the Dodd-Frank Act. To facilitate public comment, the SEC is providing a series of e-mail links on its website at http://www.sec.gov/spotlight/regreformcomments.shtml.These mailboxes are organized by topic and are listed starting with rules that have the shortest time frame for implementation. The public can provide preliminary comments on topics including OTC derivatives, hedge funds, corporate disclosure, credit rating agencies, and other areas in which the SEC will be engaged in rulemaking and studies over the next 18 months. SEC Press Release.

• Proxy Access Concept Release Includes Potentially Revolutionary Proposals.

On July 27th, CFO.com reported that the SEC's concept release on proxy access includes proposals which one law professor called "potentially revolutionary." Among the revolutionary provisions is one addressing the difficulties and costs issuers encounter in determining who owns their shares. Another discusses proxy advisory firms. Concept Release.

• Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues to Meet.

On July 23rd, the SEC announced the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues will hold a public meeting on August 11, 2010. At the meeting, the committee will continue its examination of the market events of May 6, 2010. Written statements in connection with the meeting should be submitted on or before August 10, 2010. SEC Release No. 34-62552.

• Dodd-Frank Authorizes SEC to Shorten 13D, 13G and Form 3 Filing Requirements.

A small section of the Dodd-Frank Act Wall Street Reform and Consumer Protection Act could have a significant impact on officers, directors and large shareholders of public companies. Section 929R empowers the SEC, at its discretion, to shorten the 10 day filing period for Schedules 13D and 13G, and Form 3, under Sections 13(d) and 16(a) of the Securities Exchange Act of 1934. It also eliminates the requirement for 13D filers to send copies to the issuer and to each exchange where the security is traded, and for 13G filers to send copies to the issuer. Dodd-Frank.

• "Odd Lot System" Decommissioned.

On July 27th, the SEC approved proposals by the New York Stock Exchange's and NYSE Amex to incorporate the receipt and execution of odd-lot interest into the round lot market and to decommission the use of the "Odd-Lot System." SEC Release No. 34-62578.

• FINRA Proposes Amendment to Customer Disputes Arbitration Code.

On July 28th, the SEC provided notice of the Financial Industry Regulatory Authority's filing of a proposed amendment to the Discovery Guide, which includes Document Production Lists, and to make conforming changes to Rules 12506 and 12508 of the Code of Arbitration Procedure for Customer Disputes. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of August 2. SEC Release No. 34-62584.

• SEC Approves BrokerCheck Changes.

On July 23rd, the Financial Industry Regulatory Authority advised that the SEC has approved proposed changes to, and expansion of, the information released through BrokerCheck. The SEC also approved the establishment of a process to dispute or update information disclosed through BrokerCheck. FINRA Regulatory Notice 10-34.

• MSRB Files Amendment to Proposal Regarding New Issue Requirements Rule.

On July 22nd, the SEC provided notice of the Municipal Securities Rulemaking Board's filing of an amendment to its proposed rule change to MSRB Rule G-34, CUSIP Numbers and New Issue Requirements, to enhance the interest rate and descriptive information currently collected and made transparent by the MSRB on municipal auction rate securities and variable rate demand obligations. Comments should be submitted on or before August 18, 2010. SEC Release No. 34-62550.

• NASDAQ Stock Market's Amendments Regarding Corporate Governance Disclosure are Approved.

On July 22nd, the SEC approved the NASDAQ Stock Market's proposed amendment of certain corporate governance disclosure requirements for listed companies. SEC Release No. 34-62554.

• NFA Advises of Amendments to Know-Your-Customer Rule.

On July 28th, the National Futures Association advised that amendments to NFA Compliance Rule 2-30 and its related Interpretive Notice will become effective January 3, 2011. Rule 2-30 requires NFA members and associates to obtain information about their futures customers and provide such customers with appropriate risk disclosure prior to the time the customer first opens a futures trading account or authorizes the member to direct trading in their account. NFA Notice to Members I-10-15.

• NSCC Proposes Amendments to Stock Borrow Program Rules.

On July 23rd, the SEC provided notice of National Securities Clearing Corporation's filing of a proposed amendment to Addendum C of NSCC's Rules and Procedures to implement risk enhancements so that municipal and corporate bonds would be ineligible for lending through the Stock Borrow Program and so that members would be prevented from lending securities through the SBP that were issued by that member or any of its affiliates. Comments should be submitted on or before August 19, 2010. SEC Release No. 34-62567.

• New Procedures for Executing a Cross Transaction are Proposed.

On July 28th, the SEC provided notice of NYSE Arca's filing of proposal to modify Rule 6.47(a) to describe new procedures for Floor Brokers wishing to execute a Non-Facilitation cross transaction. Currently, after requesting a market, Floor Brokers are required to disclose the terms of a cross, after which Market Makers are allowed to revise their bids and offers to block the cross. NYSE Arca proposes that Market Makers, after being informed of a potential cross, should provide their best bid and best offer, but not be allowed to step ahead of subsequently disclosed trading interest. The Exchange intends for Market Makers to make markets and not prevent better priced trading interests from interacting with each other. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of August 2. SEC Release No. 34-62580.

• BP, Propane Prices and the Class Action Fairness Act.

On July 29th, the Tenth Circuit granted BP's motion for leave to appeal the trial court's order remanding to state court the Oklahoma attorney general's lawsuit alleging BP manipulated propane prices in violation of state consumer protection law. The case raises unsettled questions concerning whether the Class Action Fairness Act's mass action provision or 'general public' exception applies to suits by a state attorney general; and whether the 'real party in interest' analysis applies. BP America, Inc. v. State of Oklahoma.

• Money Laundering.

On July 28th, the Sixth Circuit, affirming a defendant's securities and wire fraud convictions, held that the evidence supported the jury's findings. Reversing the concealment money laundering conviction, the Court held that it is not enough for the government to prove that a transaction had a concealing effect. Concealment must be part of the purpose, not just the structure, of the transaction. U.S. v. Faulkenberry. See also related unpublished opinion, U.S. v. Ayers.

• Subprime Lending and Public Nuisance Law.

On July 27th, the Sixth Circuit affirmed the dismissal of Cleveland's public nuisance lawsuit against the financial firms who are allegedly responsible for the subprime mortgage market in Cleveland. There is no direct link between the city's alleged injuries (eyesores, fires, drug deals and looting) and defendants' subprime lending activity. City of Cleveland v. Ameriquest Mortgage Securities Inc.

• Entry of Summary Judgment in Favor of SEC Affirmed.

On July 27th, the Ninth Circuit affirmed the entry of summary judgment finding that defendants sold unregistered securities and issued a false press release. The sale of the securities did not qualify for the Rule 144(k) safe harbor or Regulation D exemptions from registration. Acknowledging that scienter requires an element of subjective or conscious intent, the Court nevertheless held that the press release was materially misleading and issued with deliberate recklessness. SEC v. Platforms Wireless Int'l Corp.

• Securities Lending.

On July 27th, a federal district court partially denied a motion to dismiss a case arising out of a securities lending agreement in which cash collateral was invested in Lehman Brothers bonds. The Court denied the motion to dismiss claims alleging breach of fiduciary duty and negligence but granted the motion to dismiss claims alleging violations of state deceptive practices and securities acts. Under state law, a holder of securities may not bring a statutory securities fraud action. City of St. Petersburg v. Wachovia Bank, NA.

• Distribution of Madoff Feeder Fund Assets.

On July 27th, a magistrate entered an order directing the manner in which a Madoff feeder fund's assets should be distributed. The valuation method, which considers the proportion that each member's capital account bears to all other capital accounts, as stated in the fund's books as of the date the fraud was discovered, should be employed. Beacon Assoc. Mgmt. Corp. v. Beacon Assoc. LLC I.

• Letters Discussing Foreclosure Alternatives May Need to Comply with the FDCPA.

On July 27th, the Seventh Circuit held that a complaint alleging that defendants' letters offering to discuss foreclosure alternatives after plaintiff became delinquent on her mortgage payments stated a claim for violations of the Fair Debt Collection Practices Act. The letters were intended to induce plaintiff to settle her mortgage in order to avoid foreclosure and the complaint thus alleges communications sent in connection with an attempt to collect a debt. Gburek v. Litton Loan Servicing LLP.

• Madoff Feeder Fund Lawsuit Partially Dismissed.

On July 26th, a federal district court dismissed a portion of a fraud and negligence lawsuit brought by investors in a mutual fund against the fund and its investment advisers who invested fund proceeds with Bernard Madoff. The Court held that plaintiffs' claims against the investment adviser are derivative. Because the allegations against the fund were not well-pleaded, the Court granted plaintiffs leave to amend. West Palm Beach Police Pension Fund v. Collins Capital Low Volatility Performance Fund.

• New Iran Sanctions Will Impose New Duties on U.S. Banks, Broker-Dealers, Investment Companies, and Insurance Companies with respect to Certain Accounts Held by Foreign Financial Institutions.

On July 1, 2010, while much of the banking and securities industry was singularly focused on financial regulatory reform legislation, the President signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010. Briefing.

• UK Financial Regulation Shakeup Consultation Begins.

On 26 July 2010 the UK government published a consultation paper "A New Approach to Financial Regulation" outlining the proposed reforms to the UK's regulatory framework to avoid another financial meltdown. Briefing.

• Winston Attorneys Speak to AICPA on Financial Regulatory Reform Under the Dodd-Frank Act.

Winston & Strawn attorneys Ed Johnsen, Jerry Loeser, Peter Malyshev, and Wesley Nissen are providing an overview of this legislation to the American Institute of CPAs titled "Financial Regulatory Reform...the ABCs for CPAs" during a webinar to be presented Tuesday, August 3 from 2:00 to 4:00 p.m. (Eastern). Event.

• Dodd-Frank Act Session III: The New Enforcement Environment; International Regulatory Perspectives.

Winston & Strawn attorneys Christine Edwards, Simon Luk, Stephen D'Amore, Timothy Rivelli, and Marvin Miller Jr. will present a webinar titled "Dodd-Frank Act Session III: The New Enforcement Environment; International Regulatory Perspectives" on Friday, August 6, 2010 at 12:00 p.m. (Central). Event.

• Wes Nissen Speaks to AICPA on Financial Regulatory Reform.

Winston & Strawn financial services partner Wesley Nissen is speaking to the American Institute of CPAs on "Financial Regulatory Reform: What CPA Financial Planners Need to Know." This program will be presented as a webinar on Tuesday, August 12 from 1:00 to 2:30 p.m. (Eastern). Event.

• Dodd-Frank Act Session IV: New Executive Compensation, Corporate Governance, and Officer and Director Considerations.

Winston & Strawn will present a webinar titled "Dodd-Frank Act Session IV: New Executive Compensation, Corporate Governance, and Officer and Director Considerations " on Friday, August 20, 2010 at 12:00 p.m. (Central). Event.

• Winston Sponsors Thomson's 16th Annual LPC Loan Pricing Conference.

Winston & Strawn partners Michael Mullins and Kent Walker will be speaking during the 16th Annual Thomson Reuters LPC Loan Conference, titled: You Say You Want an Evolution: Redefining the Loan Market, to be held September 22, 2010, in New York. Winston & Strawn is also serving as a sponsor for this event. Event.

• Winston & Strawn Sponsors TMA's Annual Convention.

Winston & Strawn is proud to sponsor the TMA Annual Convention to be held October 6-8, 2010, at the JW Marriott in Orlando, Florida. TMA is a premier professional organization dedicated to corporate renewal and turnaround management. This convention is for professionals who share a common interest in strengthening the economy through the restoration of corporate value, including turnaround practitioners, appraisers, attorneys, investment bankers, equity investors, liquidators, venture capitalists, as well as, workout specialists and outsourcing professionals. Event.

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