Financial Services Update______November 1, 2010
Volume 5, No. 40



IN THIS ISSUE

Insights from Winston & Strawn

In the News

Foreclosure Developments

Banking Agency Developments

Treasury Department Developments

Commodity Futures Trading Commission

Securities and Exchange Commission

Exchanges and Self-Regulatory Organizations

Judicial Opinions

Winston & Strawn Speaking Engagements & Publications


Insights from Winston & Strawn [Top]

Over the past few weeks, the SEC and CFTC have begun to release proposed rules to implement the Dodd-Frank Act. Currently, the SEC has six and the CFTC has seven Dodd-Frank Act-related rule proposals published for public comment. These proposals, which will have wide implications on the financial markets, are the result of months of work by the staff of each agency, who have outwardly encouraged feedback and sought guidance throughout the rulemaking process. Thus far, however, the written public comment on the proposed rules has been sparse. For example, the SEC's proposed rule release relating to "family offices" has received just two comments. The SEC's proposed rule release limiting the ownership by certain large financial institutions of security-based swap clearing agencies, security-based swap execution facilities, and national securities exchanges with respect to security-based swaps has received just five comments. The CFTC's proposed rule release relating to mitigation of conflicts of interest by derivatives clearing organizations, designated contract markets, and swap execution facilities has received just eight comments. By comparison, the SEC's 1998 "aircraft carrier" release, a single 584-page release that proposed a series of significant changes in the regulation of securities offerings, received 63 comment letters from a variety of sources - industry participants, academics, law firms, industry associations, and private citizens.

While tomorrow's election may be causing some people to sit on the sidelines, waiting to see if the outcome leads to any changes or reductions in Dodd-Frank's numerous mandates, many potential commenters may simply be uncertain how to comment on individual pieces of the SEC's and CFTC's sweeping mandate. Although the SEC was criticized for the massive "aircraft carrier" release, perhaps there was a benefit to the opportunity to view, and comment on, the entirety of the regulatory reform at once. Given the wide scope and the volume of the Dodd-Frank Act rulemaking, it is difficult to view each individual proposal in context and to understand how the proposed rules will work with each other. For example, it is difficult to fully understand the implications of a proposed rule regarding swap execution facilities, when the CFTC has not yet released proposed rules describing what a swap execution facility will actually be. Additionally, it is difficult to understand the overall burden of the proposed rulemaking, and to identify potential efficiencies, without being able to view the proposed rulemaking in whole. For example, given budgetary constraints, the SEC and CFTC are likely to rely on reporting by regulated entities to monitor compliance with these new rules. Given the quantity of rules, and potential for a lack of cohesiveness between the rules, the reporting burdens could be quite large if a regulated entity has to file separate reports under different rules. Perhaps the piecemeal manner in which the proposed rules are being released has had the unintended consequence of stifling public comment.

In any event, we continue to stress the importance of the public comment process in shaping the Dodd-Frank Act rulemaking, and encourage our clients with an interest in any proposed rulemaking, to carefully consider and provide any constructive comments that they might have.
In the News [Top]
  • Elizabeth Warren and the Consumer Financial Protection Bureau.
On October 29th, Bloomberg summarized the remarks Elizabeth Warren, the special adviser assigned to help establish the Consumer Financial Protection Bureau, made at the University of California, Berkeley. Warren discussed the use of "crowd sourcing" to both inform consumers and to detect potentially abusive practices. Crowd Sourcing. On October 26th, the New York Times reported some of the staff forming the CFPB have ties to the financial services industry. Staff. The Los Angeles Times published an edited transcript of its interview with Warren. Warren Interview.
  • Credit Raters.
On October 29th, Reuters reported that some regulators and analysts are asking Congress to narrow the Dodd-Frank Act's provisions requiring the removal of references to credit raters in agency rules. They fear that without a tested replacement, the market for commercial paper may erode, making corporate borrowing even more difficult. Credit Rater Rollback. On October 27th, the Financial Stability Board published "Principles for Reducing Reliance on Credit Rating Agency (CRA) Ratings". The report encourages member countries to reduce their reliance upon credit rating agencies in their rules and regulations. FSB Press Release.
  • House Financial Services Committee.
On October 29th, Bloomberg profiled Representative Spencer Bachus who would likely chair the House Financial Services Committee if the Republicans win control of the House. Representative Ed Royce may challenge Bachus for that position. Profiles.
  • Proprietary Trading.
On October 28th, Reuters reported that 18 Senators have written the Financial Stability Oversight Council, headed by Treasury Secretary Timothy Geithner, suggesting the adoption of a two-tiered approach to supervising financial firm proprietary trading. Proprietary Trading.
  • Dodd-Frank Act Provision Expands SEC Authority to Seek Fines.
On October 27th, Reuters reported that a little noticed provision in the Dodd-Frank Act gives the SEC additional authority to seek civil penalties and fines against respondents in administrative proceedings. Expanded Authority.
  • Profile of Representative Darrell Issa.
On October 27th, the Washington Post reported on Representative Darrell Issa who would likely chair the House oversight committee if the Republicans win control of the House. Issa Profile.
  • Shareholder Litigation.
On October 26th, the New York Times reported that former SEC Commissioner Joseph A. Grundfest has suggested that public companies adopt a charter or by-law provision requiring that all state law shareholder litigation be conducted in the company's state of incorporation. Shareholder Litigation.
  • MBS Investors' Rescission Efforts.
On October 26th, the Washington Post reported that investors in mortgage-backed securities are beginning to overcome the legal hurdles preventing them from rescinding their purchases. Rescission.
  • Financial Stability Board Reports on OTC Derivative Reforms.
On October 25th, the Financial Stability Board released a report on Implementing OTC Derivatives Market Reforms. The report sets out common approaches to implementing reforms to OTC derivatives markets in an internationally consistent and non-discriminatory way. FSB Press Release.
  • SIGTARP's Quarterly Report to Congress.
On October 25th, the Special Inspector General for the Troubled Asset Relief Program released its Quarterly Report to Congress. Comparing the effect that TARP has had on Wall Street versus Main Street, the report notes small businesses' continued inability to obtain credit, the continued presence of moral hazard, and the program's lack of transparency. The report also discusses the risks associated with the plans to recapitalize AIG and the government's failures with respect to the Home Affordable Mortgage Program. See also New York Times (summarizing the report's findings concerning AIG).
  • Convertible Debt.
On October 25th, Reuters reported the remarks of Christine Cumming, first vice president at the Federal Reserve Bank of New York. Cumming discussed the use of "bail-in" provisions that would convert a financial firm's debt to equity in the event of financial stress. Convertible Debt.
  • Insider Trading.
On October 24th, the Washington Post reported that a recent National Bureau of Economic Research paper studied how statistical evidence of trading by corporate insiders could be used to identify possible improper trading. Insider Trading.
Foreclosure Developments [Top]
  • Foreclosure Investigations.
On October 28th, Bloomberg reported that the Ohio Attorney General will make Wells Fargo the focus of its investigation into flawed foreclosure practices after the bank disclosed that it will file supplemental materials in 55,000 cases. Focus. Separately, Bloomberg reported that the Arizona Attorney General suggested that any global settlement should require banks to offer mortgage modifications. The Arizona Attorney General pointed to a recent settlement with Wells Fargo as a guide to establishing such a modification program. Settlement Terms.
  • Foreclosure Seminars.
On October 27th, Bloomberg reported that a North Carolina lawyer offers four-day seminars focused on uncovering flawed foreclosure practices. Boot Camp.

Banking Agency Developments [Top]
  • FDIC Chairman Calls for Foreclosure Safe Harbor.
On October 26th, the Los Angeles Times reported the remarks of FDIC Chairman Sheila Bair at a symposium on mortgages and housing finance hosted by the FDIC and Federal Reserve Board. Bair said that a safe harbor should be created to allow foreclosures to continue on vacant homes or on mortgages where payments have not been made after being lowered by 25 per cent or more. Bair Remarks.
  • Annual Adjustments to Regulation D Reserve Calculations and Deposit Reporting.
On October 26th, the Federal Reserve Board announced the annual indexing of the reserve requirement exemption amount and the low reserve tranche for 2011. These amounts are used in the calculation of reserve requirements of depository institutions. The Board also announced the annual indexing of the nonexempt deposit cutoff level and the reduced reporting limit that will be used to determine deposit reporting panels effective 2011. Federal Reserve Board Press Release.
  • Federal Reserve Board Reports on College Credit Card Agreements.
On October 25th, the Federal Reserve Board released a report containing payment and account information about more than 1,000 agreements between credit card issuers and institutions of higher education or affiliated organizations that provide for the issuance of credit cards to students. The Board also launched an online database with additional information such as the terms of these agreements. Federal Reserve Board Press Release.
  • Banking Agencies Evaluating Foreclosure Practices.
On October 25th, Federal Reserve Board Chairman Ben Bernanke said that the federal banking agencies are completing an in-depth review of foreclosure practices at the largest mortgage servicing operations. Preliminary results of the review should be available next month. In addition, regulators are evaluating the potential effects of these problems on the real estate market and financial institutions. Bernanke Remarks.
  • Federal Reserve Board Publishes Paper on Foreclosure Prevention.
On October 25th, the Federal Reserve Board published "Addressing the Impact of the Foreclosure Crisis", which discusses innovative, community-based foreclosure prevention and neighborhood stabilization activities sponsored by the Federal Reserve as part of its Mortgage Outreach and Research Efforts initiative. Federal Reserve Board Press Release.
Treasury Department Developments [Top]
  • Treasury Department Seeks Comment on Exempting Forex Swaps and Forwards form Derivatives Regulations.
On October 29th, the Treasury Department requested comment on whether it should exempt foreign-exchange swaps and forwards from the over-the-counter derivatives regulations being developed by the CFTC. The Dodd-Frank Act amended the Commodity Exchange Act to allow the Secretary of the Treasury to issue a written determination exempting foreign exchange swaps, foreign exchange forwards, or both, from the definition of a "swap" under the CEA. Comments should be submitted on or before November 29, 2010. 75 FR 66829.
  • Treasury Department Designates Companies and Individuals Associated with Iran's Shipping Lines.
On October 27th, the Treasury Department announced the designation of 37 front companies based in Germany, Malta, and Cyprus and five Iranian individuals for being owned or controlled by, or acting for or on behalf of, the Islamic Republic of Iran Shipping Lines and its affiliates. IRISL's network of shipping and holding companies and executives advance Iran's illicit weapons of mass destruction program and carry military cargoes. The designations freeze any assets the designees have under U.S. jurisdiction and prohibit U.S. persons from engaging in any transactions with them. Treasury Department Press Release.
  • U.S. Designates Two Afghan Narcotics Traffickers.
On October 26th, the Treasury Department designated two Afghan narcotics traffickers as Specially Designated Global Terrorists for providing financial and logistical support to the Taliban. Haji Agha Jan Alizai manages one of the largest drug trafficking networks and Saleh Mohammad Kakar runs a smuggling network. The designations freeze any assets the designees have under U.S. jurisdiction and prohibit U.S. persons from engaging in any transactions with them. Treasury Department Press Release.
  • Unblocking Notices.
On October 25th, the Treasury Department unblocked the assets of 18 individuals previously designated as significant narcotics traffickers. 75 FR 65557. The designation of one of those individuals, Louis Sanchez Varilla, under the Foreign Narcotics Kingpin Designation Act has also been lifted. 75 FR 65558.
Commodity Futures Trading Commission [Top]
Proposed Rules
  • Business Affiliate Marketing Rules.
On October 27th, the CFTC published for comment business affiliate marketing and disposal of consumer information rules under the Fair Credit Reporting Act. The proposed regulations require CFTC registrants to provide consumers with the opportunity to prohibit affiliates from using certain information to make marketing solicitations to consumers. Comments should be submitted on or before December 27, 2010. See also CFTC Fact Sheet; Questions and Answers.
  • Privacy Rules.
On October 27th, the CFTC proposed for comment a rule expanding the scope of privacy protections for consumer financial information under the Gramm-Leach-Bliley Act. Comments should be submitted on or before December 27, 2010. See also CFTC Fact Sheet; Questions and Answers.
  • "Agricultural Commodity" Definition Proposed.
On October 26th, the CFTC published for comment a proposed definition of "agricultural commodity" for purposes of the Commodity Exchange Act and CFTC regulations. Comments should be submitted on or before November 26, 2010. 75 FR 65586. See also Questions and Answers.
  • CFTC to Propose Rules Regarding Swaps.
On October 26th, the CFTC voted to propose rules concerning procedures for determining the eligibility of derivatives clearing organizations to clear swaps; for the submission of swaps by DCOs to the CFTC for a determination on a clearing requirement; for CFTC-initiated reviews of swaps; and for staying a clearing requirement while the clearing of a swap is reviewed. CFTC Fact Sheet; Questions and Answers.
  • CFTC to Propose Amendments Removing References to Credit Rating Agencies.
On October 26th, the CFTC voted to propose for comment amendments removing from CFTC regulations references to credit rating agencies. CFTC Fact Sheet; Questions and Answers.
  • CFTC to Propose Anti-Manipulation Rules.
On October 26th, the CFTC voted to publish for comment proposed rules prohibiting any person from using or attempting to use any manipulative or deceptive device or contrivance. The proposed rule is patterned after section 10b of the Securities Exchange Act of 1934. CFTC Fact Sheet; Questions and Answers.
  • CFTC to Propose Rules Prohibiting Disruptive Trading Practices.
On October 26th, the CFTC voted to publish for comment proposed rules prohibiting certain trading practices deemed disruptive of fair and equitable trading. Section 747 of the Dodd-Frank Act amends section 4c(a) of the Commodity Exchange Act to make it unlawful for any person to engage in any trading, practice, or conduct on or subject to the rules of a registered entity that violates bids or offers; demonstrates intentional or reckless disregard for the orderly execution of transactions during the closing period; or is of the character of, or is commonly known to the trade as, "spoofing" (bidding or offering with the intent to cancel the bid or offer before execution). CFTC Fact Sheet; Questions and Answers.
  • CFTC to Propose Statutory Framework for Product and Rule Certification.
On October 26th, the CFTC voted to propose for comment a new statutory framework for certification and approval procedures for new products, new rules and rule amendments submitted to the Commission by registered entities such as Derivatives Clearing Organizations, Designated Contract Markets, Swap Execution Facilities and Swap Data Repositories. CFTC Fact Sheet; Question and Answers.
  • CFTC to Propose Amendments Regarding the Investment of Customer Funds.
On October 26th, the CFTC voted to propose for comment amendments regarding the investment of customer segregated funds. The amendments include certain changes to the list of permitted investments; clarification of the liquidity requirement; removal of the credit rating requirement; the tightening of concentration limits, including instrument-based, issuer-based, and counterparty concentration restrictions; and the revision of the acknowledgment letter requirement for investment in a money market mutual fund. CFTC Fact Sheet; Questions and Answers.
Other Developments
  • Silver Futures Allegedly Manipulated.
On October 28th, Bloomberg reported two complaints have been filed in which JP Morgan and HSBC are accused of having attempted to manipulate the futures price of silver. The CFTC has also been investigating similar allegations. Silver Manipulation.
  • Algorithmic Trading.
On October 25th, Reuters reported CFTC Commissioner Bart Chilton wants the CFTC to hold accountable traders whose algorithms disrupt the markets. Algorithms.
Securities and Exchange Commission [Top]
Requests for Comment
  • SEC Seeks Comment on Extraterritorial Private Rights of Action.
On October 25th, the SEC requested public comment to determine the extent to which private rights of action under the antifraud provisions of the Securities Exchange Act should be extended to cover conduct within the United States that constitutes a significant step in the furtherance of the violation, even if the securities transaction occurs outside the United States and involves only foreign investors; and to conduct occurring outside the United States that has a foreseeable substantial effect within the United States. Comments should be submitted on or before February 18, 2011. SEC Release No. 34-63174.
  • Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues.
The Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues will hold a public meeting on November 5, 2010 at the CFTC's Washington, D.C. headquarters. At the meeting, the committee will receive a summary and recap from the staffs of the SEC and CFTC; hear a report from the subcommittee on cross-market linkages; hear a report from the subcommittee on pre-trade risk management; and discuss potential recommendations and responses. Comments should be submitted on or before November 4, 2010. SEC Release No. 34-63169; SEC Press Release.
Other Developments
  • Open Meeting.
The SEC will hold an open meeting on November 3, 2010 where it is scheduled to consider:
  • Whether to adopt new Rule 15c3-5, Risk Management Controls for Brokers or Dealers with Market Access, under the Securities Exchange Act of 1934. The new rule would require brokers or dealers with access to trading directly on an exchange or alternative trading system to implement risk management controls and supervisory procedures. Among other things, new Rule 15c3-5 would effectively prohibit broker-dealers from providing "unfiltered" or "naked" sponsored access to any exchange or ATS.
  • Whether to propose a new rule under Section 763(g) of the Dodd-Frank Act to prohibit fraud, manipulation, and deception in connection with security-based swaps.
  • Whether to propose rules and forms to implement Section 21F of the Securities Exchange Act entitled "Securities Whistleblower Incentives and Protection." Section 21F, as added by Section 922 of the Dodd-Frank Act provides that the Commission shall pay awards to eligible whistleblowers who voluntarily provide the Commission with original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action.
SEC Meeting Notice.
  • Khuzami's Enforcement Division.
On October 28th, Fox Business reported on Robert Khuzami's tenure as Director of the SEC's Division of Enforcement. Tenure.
  • Commissioner Walter Addresses the National Association of Bond Lawyers.
On October 28th, SEC Commissioner Elisse B. Walter discussed the SEC's recent field hearing in San Francisco concerning municipal securities. Walter Remarks.
  • Insider Trading.
On October 25th, the New York Times reported that the SEC is taking an aggressive stance on insider trading. Insider Trading.
  • Market Structure.
On October 25th, Reuters reported that because the SEC will be focused on implementing the regulations mandated by the Dodd-Frank Act, it will not be addressing market structure issues such as dark pools and flash trades until late this year. Timetable. On October 22nd, Reuters reported on the dissatisfaction voiced over the SEC's circuit breaker rules. Circuit Breakers.
  • CCOutreach BD National Seminar Announced.
On October 22nd, the SEC and the Financial Industry Regulatory Authority announced that the annual CCOutreach BD National Seminar will be held on February 8, 2011, at the SEC's Washington, D.C., headquarters. SEC Press Release.
  • SEC Corporation Finance Director Addresses ABA Business Law Section.
On October 22nd, SEC Director, Division of Corporation Finance Meredith B. Cross discussed "say-on-pay," uninstructed broker votes, compensation committee listing standards, executive compensation disclosure and the proxy voting system. Cross Remarks.
Exchanges and Self-Regulatory Organizations [Top]
  • SEC Approves Co-Location Fees.
On October 21st, the SEC granted immediate effectiveness to NASDAQ OMX BX's, NASDAQ OMX PHLX's and NASDAQ Stock Market's individually proposed fees for their respective co-location services. These fees are: a one-time $3,000 fee for users selecting a Phase 3 2x 20 208 volt cabinet power option; a one-time $200 per shelf fee for additional cabinet shelves within a power cabinet; a one-time $175 fee per lock for single master key locks that allow customers to use a single key to access their secured equipment; and a one-time per spout fee of $750 for cable downspouts that gather and secure cables entering customer equipment. Comments should be submitted on or before November 17, 2010.
  • SEC Approves New Routing Strategies.
On October 21st, the SEC granted immediate effectiveness to BATS Exchange's and BATS Y-Exchange's separately proposed amendments to their respective Rules 11.13, "Order Execution," to add certain new routing strategies and to modify the existing description of exchange routing strategies. Comments should be submitted on or before November 17, 2010.
C2 Options Exchange
  • SEC Approves Modification of Matching Algorithm Rule.
On October 22nd, the SEC granted immediate effectiveness to C2 Options Exchange's proposed modification of Rule 6.12 relating to the C2 matching algorithm. C2 is simplifying Rule 6.12 to allow for 3 choices of matching algorithms: price-time, pro-rata, and price-time with first priority going to public customers and second priority pursuant to the trade participation right. The first two of these options are unchanged. C2 believes that adding the third, which is achievable under existing C2 Rule 6.12 and which is the intended algorithm of choice for the C2 launch, makes C2 matching rules clearer for C2 users. Comments should be submitted on or before November 18, 2010. SEC Release No. 34-63164.
Chicago Board Options Exchange
  • SEC Approves Expansion of Strike Price Intervals for VIX Options.
On October 21st, the SEC granted immediate effectiveness to the Chicago Board Options Exchange's proposed expansion of the range of strike price intervals for VIX Options. Comments should be submitted on or before November 18, 2010. SEC Release No. 34-63155.
Financial Industry Regulatory Authority
  • FINRA Amends Trading Activity Fee and Announces Frequently Asked Questions Guidance.
On October 29th, the Financial Industry Regulatory Authority announced that, effective November 1, 2010, FINRA is removing the exemption from the Trading Activity Fee (TAF) for transactions in exchange-listed options effected by a member firm when FINRA is not the designated options examining authority for that firm. Because FINRA now has sole regulatory responsibility for the public options activities of all of its member firms, the exemption is no longer necessary. FINRA also announced publication on its website of Trading Activity Fee Frequently Asked Questions, which provides guidance for firms on the assessment of the TAF. FINRA Regulatory Notice 10-56.
  • Effective Date for the Reporting of ABS to Trace.
On October 27th, the Financial Industry Regulatory Authority announced that it has established a new effective date of May 16, 2011 for the reporting of asset-backed securities to TRACE. FINRA Regulatory Notice 10-55.
  • FINRA Seeks Comment on Proposal Requiring Disclosure of Services, Conflicts and Duties.
On October 27th, the Financial Industry Regulatory Authority requested comment on a concept proposal that would require member firms, at or prior to commencing a business relationship with a retail customer, to provide a written statement to the customer describing the types of accounts and services it provides, as well as conflicts associated with such services and any limitations on the duties the firm otherwise owes to retail customers. Comments should be submitted on or before December 27, 2010. FINRA Regulatory Notice 10-54.
  • Margin Requirements for Exempted Securities.
On October 26th, the Financial Industry Regulatory Authority reminded firms of customer margin requirements for exempted securities mutual funds and exempted securities exchange traded funds in Regulation T margin accounts. FINRA also reminded firms of customer margin requirements for money market mutual funds. FINRA Regulatory Notice 10-53.
  • FINRA Proposes Modified Books and Records Rules.
On October 26th, the SEC provided notice of the Financial Industry Regulatory Authority's filing of a proposal to adopt certain modified NASD and NYSE rules regarding books and records into the FINRA Rulebook. The proposed rule change would rewrite the FINRA books and records rules with a view to achieving three goals: streamlining the rules to make them as clear as possible; grouping the requirements along similar subject matter lines to make finding them a more intuitive process and to provide members with a better understanding of the regulatory scheme; and eliminating those requirements contained in the current rules that have become obsolete or otherwise duplicative. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of November 1. SEC Release No. 34-63181.
  • SEC Approves FINRA Rule on Customer Confirmations.
On October 21st, the SEC granted accelerated approval to the Financial Industry Regulatory Authority's proposed adoption of FINRA Rule 2232 (Customer Confirmations) in the Consolidated FINRA Rulebook and deletion of NASD Rule 2230, NASD IM-2110-6 and Incorporated NYSE Rule 409(f). SEC Release No. 34-63150.
International Swaps and Derivatives Association
  • ISDA Publishes Two Best Practice Documents.
On October 26th, the International Swaps and Derivatives Association published two best practice documents: The OTC Derivatives Settlements Best Practice and the OTC Derivatives Interest Compensation Claims Best Practice. The OTC Derivatives Settlements Best Practice provides cross asset class guidelines to the industry on common settlement risk management issues covering both pre and post settlement issues. The OTC Derivatives Interest Compensation Claims Best Practice outlines the guidelines for the submission and processing of interest compensation claims arising from payments relating to OTC Derivatives transactions confirmed under the terms of the ISDA Master Agreement 2002 (or any earlier version thereof). ISDA Press Release.
NYSE Arca
  • New Procedures for Executing a Cross Transaction Proposed.
On October 22nd, the SEC provided notice of NYSE Arca's 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, provide their best bid and best offer, but not be allowed to step ahead of subsequently disclosed trading interest. Comments should be submitted on or before November 18, 2010. SEC Release No. 34-63166.
Judicial Opinions [Top]
  • Seventh Circuit Upholds Conrad Black's Convictions on Two Counts; Reverses on Two Counts.
On October 29th, the Seventh Circuit upheld Conrad Black's convictions on one count of obstruction of justice and one count of pecuniary fraud. On remand after the Supreme Court held that the trial court's jury instructions on honest services fraud were incorrect, the Seventh Circuit found that it is not open to reasonable doubt that the jury would still have convicted Black on the obstruction of justice charge and one count of pecuniary fraud. The Seventh Circuit reversed the convictions on two other pecuniary fraud counts as tainted by the improper honest services fraud jury instructions and remanded for retrial on those counts and resentencing. U.S. v. Black.
  • In Pari Delicto.
On October 21st, the New York Court of Appeals addressed certified questions on New York's in pari delicto law posed by two cases. Both cases, the first arising out of the collapse of Refco and the second out of the near collapse of AIG, allege that corporate insiders acted to the detriment of their company and seek to hold the insiders, lawyers and auditors liable. Refusing to expand imputation principles or the adverse interest exception to the in pari delicto doctrine, the New York Court of Appeals held that a corporation is responsible for its agent's acts even if particular acts were unauthorized. A fraud that benefits the corporation is not adverse to the corporation's interests even if it was motivated by the agent's desire for personal gain. Kirschner v. KPMG, LLP and Teachers' Retirement System of Louisiana v. PricewaterhouseCoopers LLP.
Winston & Strawn Speaking Engagements & Publications [Top]
  • Kreindler Co-Chair of Pension & Investments West Coast Defined Contribution Conference.
Chicago-based financial services partner Marla Kreindler served as co-chair of the Pension & Investments West Coast Defined Contribution Conference, which took place on October 24th through 26th in San Francisco. Ms. Kreindler also presented at the conference on risk management for defined contribution plans. Conference Agenda.
  • Marla Kreindler Discusses Risk Management With Women Investment Professionals.
Chicago-based financial services partner Marla Kreindler will speak on the panel "An Operational Risk Management Perspective," as part of the Women Investment Professionals (WIP) Program that will take place on November 4 in Chicago. Topics for this program include:
  • Implications of increased globalization on operational infrastructure
  • Preliminary thoughts on implications of Dodd-Frank bill for investment managers, custodians, and fund sponsors - such as central clearing, reporting and disclosure
  • Plan sponsor operational risk management expectations; what questions are they asking?
  • What are regarded as best practices for trade communications today? How are exchanged-traded and OTC derivatives handled? Are custodians and managers ready?
  • How is legal getting involved in helping manage operational risk management issues? What areas of risk are being examined?
  • Winston & Strawn Sponsors SIFMA-CL Fall Compliance & Legal Seminar.
Winston & Strawn is a sponsor of this year's Securities Industry and Financial Markets Association Compliance and Legal Society Fall Compliance and Legal Seminar, which will be held at the Grand Hyatt Hotel in New York City on November 16th. New York financial services attorneys Ed Johnsen and Bob Boresta will be representing the Firm at the seminar. Seminar.

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