A U.S. law to improve tax compliance by U.S. taxpayers with foreign financial assets is creating confusion for foreign financial institutions that must cooperate with the Internal Revenue Service to help enforce the law.

02 May 2013Stuart Gittleman

The law, the Foreign Account Tax Compliance Act, or FATCA, requires U.S. taxpayers with certain foreign financial assets and offshore accounts to report the assets to the Internal Revenue Service.  (more…)

03 Apr 2013Stuart Gittleman

An enforcement agreement between the Financial Industry Regulatory Authority and broker-dealer MD Sass Securities offers guidance on what disclosures FINRA will look for when examining brokers engaged in the private placement of securities, especially for affiliated entities.

This guidance may be particularly appropriate for offerings under the Jumpstart Our Business Startups, or JOBS, Act, which relaxes rules for emerging-company capital raising. Some of the startups are expected to raise capital through private placements, in many cases with the investment bank also engaged in selling the investments. (more…)

Court-approved securities class action settlements reported in 2012 were at a 14-year low and 18 percent fewer than in 2011 but they cost defendants twice as much as the prior year, a report released Wednesday said.

26 Mar 2013Stuart Gittleman

The study by the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research associated settlement values with factors including the presence of enforcement actions related to the lawsuits. This may hold clues to the outcomes in recently litigation over alleged manipulation of the global lending benchmark LIBOR, the London Interbank Offered Rate.  (more…)

19 Mar 2013Stuart Gittleman

Settlements on Friday that require several affiliates of the SAC. fund group to pay the Securities and Exchange Commission unprecedented monetary sanctions for insider-trading violations also offer fund managers valuable compliance lessons.

The proposed $602 million settlement including a $275 million fine is “historic” – it is the largest-ever for insider trading – said George S. Canellos, acting director of the SEC Division of Enforcement.  (more…)

14 Mar 2013Stuart Gittleman

Companies that want to manage their legal and regulatory liability and their reputational capital should treat current standards as the starting point – not the finish line – for their ethics and compliance programs, conference attendees heard Tuesday.

“Your company will be judged in the future by what it does today. Transparency is rapidly increasing, and you don’t know how it will affect your business and reputation,” one of the speakers, Dirk Mohrmann, chief executive officer of World Compliance, told attendees at the 2013 Global Ethics Summit, which was held in New York and was sponsored by Ethisphere and Thomson Reuters. (more…)

21 Feb 2013Stuart Gittleman

The European banking union that is coming into place would have been “unthinkable two or three years ago,” Michel Barnier, European Commission member for internal market and services, told the Transatlantic Finance Initiative in New York. Barnier urged U.S. banking regulators to follow the European path and G20 agenda as he described them, adding that transatlantic regulators should raise the level and effectiveness of their cooperation and coordination.

International standards are largely agreed upon, Barnier said. Meetings on Thursday with the Federal Reserve, the Treasury Department and U.S. functional banking regulators showed that, in addition to progress on liquidity, “we are on parallel tracks to implement Basel III, we are close on margins for derivatives, we are making good progress on shadow banking [and] work on systemic banks is also well in hand.” (more…)

13 Feb 2013Stuart Gittleman

“I just want to say one word to you. Just one word. Are you listening? Plastics,” a business executive told a young Dustin Hoffman in the 1967 movie The Graduate.

Today’s one word of advice to a young lawyer could easily be “compliance,” Brooklyn Law School Dean Nick Allard said Friday in opening a symposium on “The growth and importance of compliance in financial firms: meaning and implications.”

The event was hosted by Professor James Fanto, who told Compliance Complete that the Center for the Study of Business Law and Regulation he co-directs is working to prepare business-savvy compliance professionals for the financial firms a subway stop away on Wall Street.

It’s vital to know how the firm makes money and where the risks are, in the increasingly complex and global business and regulatory environments, said Grace Vogel, Executive Vice President, Member Regulation, of the Financial Industry Regulatory Authority. (more…)

04 Feb 2013Stuart Gittleman

Employees at financial institutions can protect their firms better by including the details of why they think a transaction is fishy when preparing suspicious activity reports, Manhattan District Attorney Cyrus R. Vance Jr. told compliance professionals on Monday.

The reports, or SARs, can also help fight a wide range of crimes – not just narcotics or terrorism-related – if employees add key details, Vance said at the Association of Certified Anti–Money-laundering Specialists’ inaugural anti-money laundering, ( AML) risk management conference.  (more…)

17 Jan 2013Stuart Gittleman

Anti-money laundering compliance will again be a focus of Financial Industry Regulatory Authority examinations this year, particularly at broker-dealers with higher-risk business models due to their clients, products and service mix, or locations.

HSBC’s $1.9 billion fine last month highlighted, among other things, the potential AML risks associated with foreign affiliates and the business they transact through their U.S. financial institution affiliates, FINRA said in its 2013 annual regulatory and examination priorities letter. (more…)

21 Dec 2012Stuart Gittleman

A “highly polarized (and) politicized environment” had made the job of defending against a regulatory investigation particularly challenging, Lawrence Zweifach, a Gibson Dunn law partner, told attendees at a New York City Bar Association program last week. But there are steps a firm can to take to face the challenges.

The high-pressured atmosphere is affecting judges, regulators and legislators, and leading to cases “that will not stand up in the long run” to be brought, said Andrew Levander, a Dechert law partner. (more…)