The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: Regulatory Reform

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Long-Awaited Federal Insurance Office Report Proposes Hybrid Regulatory Model

Posted in Regulatory Reform
The Federal Insurance Office (FIO) has – nearly two years overdue – finally published its long awaited report to Congress on its recommendations for the modernization of insurance regulation in the United States. The broadly ranging 65-page report identifies limitations in the current state-based regulatory model but does not recommend that federal regulation should displace state … Continue Reading

The Impact of the JOBS Act on D&O Liability

Posted in Regulatory Reform
On March 27, 2012, the U.S. House of Representatives passed the Jumpstart Our Business Startups Act (of the JOBS Act as it is more popularly known). President Obama is expected to sign the Act shortly. The Act is intended to facilitate capital-raising by reducing regulatory burdens. The Act also introduces changes designed to ease the … Continue Reading

Dodd-Frank Rulemaking Delays: Bad, and Likely to Get Worse

Posted in Regulatory Reform
You may have seen May 2, 2011 Wall Street Journal article entitled “Overhaul Grows and Slow” (here), which described the backlog developing as regulators struggle to meet the rule-making deadlines mandated by the Dodd-Frank Act. The article itself was interesting enough, but if you really want to appreciate the daunting task regulators face, you may want … Continue Reading

Book Review: “American Colossus”

Posted in Regulatory Reform
In our era, the burgeoning BRIC countries represent the developing economies forcing their way onto the global stage and arguably even threatening to dominate the financial arena in the decades ahead. It is hard to remember now, but in the late 19th century, the developing economy that was pushing its way into the global financial … Continue Reading

Law Firm Memo Roundup

Posted in Regulatory Reform, Securities Litigation
My weekend reading over the Memorial Day holiday included a hefty selection from the stack of law firm memos that accumulated in my inbox in recent weeks. Many of the most recent memos related to the Senate’s passage of its version of the financial reform legislation, but the memos also reflected a variety of other … Continue Reading

Congressional Overhaul of Financial Regulation Launched, Securities Law Reforms Proposed

Posted in Regulatory Reform, Securities Litigation
One consequence of the current economic crisis that has long seemed inevitable is some form of legislative overhaul of the financial regulatory system. This possibility may have taken one step toward realization with the October 1 release of a package of legislative proposals by Pennsylvania Democratic Congressman Paul E. Kanjorski, the Chairman of the House … Continue Reading

Private Securities Litigation: Important Deterrent or Wasteful Churn?

Posted in Regulatory Reform, Securities Litigation
Do private securities lawsuits play an important role in deterring fraud and compensating defrauded investors, or are they simply wasteful and ineffective? These were the questions that on October 23, 2008 Stanford Law School Professor Joseph Grundfest and Duke Law School Professor James Cox debated in New York at the Forum for Institutional Investors sponsored … Continue Reading

A Renewed Plea for Securities Litigation Reform

Posted in Regulatory Reform
The intervening subprime meltdown makes it seem longer ago than it really was, but it was only a short time ago that regulatory reform was a very hot topic (as noted, for example, here). Dramatic intervening events have advanced other priorities. Indeed, efforts to increase rather than reduce financial markets regulation seem to be the … Continue Reading

Paulson’s Initiatives and U.S. Capital Market Competitiveness

Posted in Paulson Committee, Regulatory Reform
On May 17, 2007, Treasury Secretary Henry M. Paulson, Jr. announced (here) his latest "initiatives…to enhance U.S. capital market competitiveness." In a Financial Times op-ed piece published the same day (here), Paulson said the purposes of the initiatives were to "ensure we preserve an efficient financial reporting system that provides reliable information, is supported by … Continue Reading

If Foreign IPOs Are Booming, Do We Still Need Reform?

Posted in Regulatory Reform
In recent months, several blue ribbon panels, concerned about the competitiveness of the U.S. securities markets, have proposed reforming U.S. securities regulation, on the theory that the regulatory burden that has driven overseas companies to list their shares outside the U.S. As I have discussed at length previously (most recently here), there are a host … Continue Reading

Arbitrating Shareholder Claims: Coming Soon?

Posted in Regulatory Reform
Two of the recent reports of blue ribbon groups looking at the competitiveness of U.S. capital markets recommended among other things that the SEC should consider permitting public companies to amend their charters to provide for arbitration of securities claims. According to an April 16, 2007 Wall Street Journal article entitled, “SEC Explores Opening Door … Continue Reading

Another Call to Eliminate Private Securities Lawsuits

Posted in Regulatory Reform, Securities Litigation
Amidst the current clamor over the competitiveness of the U.S. financial markets, a recurring theme has been the burden on the financial markets of U.S. litigiousness. One variant of this theme that has gotten air time is the idea that private securities lawsuits should be eliminated. The most prominent proponent of this idea is Stanford … Continue Reading

U.S. Chamber Commission Reports on Capital Markets Competitiveness, Recommends Securities Reform

Posted in Regulatory Reform
On March 12, 2007, in the latest in the apparently never-ending series of big thick reports on the competitiveness of U.S capital markets, the U.S. Chamber of Commerce released the Report and Recommendations of its Commission on the Regulation of the U.S. Capital Markets in the 21st Century (here). An Executive Summary of the Report … Continue Reading

Apple, The Big Apple, and “Pay to Play” Plaintiffs’ Lawyers

Posted in Paulson Committee, Plaintiffs' Bar, Regulatory Reform, Securities Litigation
In a series of recent editorials, the New York Sun has raised some interesting and troubling questions about a New York City’s pension fund’s involvement as lead plaintff in the Apple Computer options backdating securities litigation. The first Sun editorial on the topic, entitled "New York Versus Apple "appeared on January 25, 2007 (here). The … Continue Reading

AIM Reforms Rules for Companies

Posted in AIM, Regulatory Reform
The would-be reformers who propose restructuring the U.S securities regulation regime cite the loss of U.S. IPO market share to overseas markets, particularly London’s Alternative Investment Market (AIM), as justification for regulatory reform. But as The D & O Diary has previously noted (most recently here and here), these overseas markets, especially the AIM, face … Continue Reading

Changing Circumstances in the Global Financial Marketplace

Posted in AIM, International D & O, Regulatory Reform
In a recent post (here), I noted that the cross-border Siemens bribery investigation shows that regulators throughout the world increasingly recognize the importance of vigilance and scrutiny, and that the extent of alleged misconduct in that case could spur further efforts for oversight and reform. In that same vein, a February 15, 2007 New York … Continue Reading

The Weak Case for Regulatory Reform Gets Even Weaker

Posted in AIM, Regulatory Reform, Videos
At the heart of recent calls for regulatory reform in the Interim Report of the Committee on Capital Markets Regulation and in the Bloomberg/Schumer Report is the assertion that the U.S. securities markets are losing global IPO marketshare because of supposed regulatory overkill and the litigious environment in the U.S. Accompanying this assertion is the … Continue Reading

The Bloomberg/Schumer Report on U.S. Capital Market Competitiveness

Posted in Paulson Committee, Regulatory Reform
On Monday January 22, 2007, Republican New York City Mayor Michael Bloomberg and Democratic New York Senator Charles Schumer released the joint report they commissioned from McKinsey & Company, entitled "Sustaining New York’s and the U.S.’s Global Financial Services Leadership." The report can be found here, and the joint press release describing the report can … Continue Reading

Looking at Auditor Liability Caps

Posted in Accountant Liability, International D & O, Paulson Committee, PCAOB, Regulatory Reform
When the Committee on Capital Markets Regulation (popularly known as the Paulson Committee) in its Interim Report (here) recommended "setting a cap on auditor liability," the Committee relied for support on the steps in that direction that have been taken by the European Commission. In its latest effort along those lines, the European Commission on … Continue Reading

Is London’s “Light Touch” Attracting Fraudsters?

Posted in AIM, International D & O, Paulson Committee, Regulatory Reform
In my prior comments on the Paulson Committee’s calls for regulatory reform (most recently, here), I have suggested that perhaps the U.S. securities markets may be better off without at least some of the companies that are avoiding the U.S. exchanges’ tougher listing requirements. A recent report by a U.K. accounting firm contains interesting data … Continue Reading

Paulson Committee’s Weak Case for Regulatory Reform

Posted in Paulson Committee, Regulatory Reform
When the blue-ribbon Committee on Capital Markets Regulation (popularly known as the Paulson Committee) released its Interim Report (here) calling for regulatory reform, it based its case for reform in large part on the U.S securities exchanges’ loss of market share in the global IPO marketplace. As The D & O Diary has previously noted … Continue Reading

Looking at The Paulson Committee’s Proposed Litigation Reforms

Posted in Paulson Committee, Regulatory Reform
As noted yesterday (here), the Committee on Capital Markets Regulation (often referred to as the Paulson Committee) has released its Interim Report (here). The Report contains much text, many graphics, and 32 recommendations supposedly addressed to how to improve the competitiveness of the U.S. securities markets. As proof that the U.S. markets are losing their … Continue Reading