Tag: Dodd-Frank

Monday Morning Rant

November 28th, 2011

WSJ's Joe Palazzolo reports here this morning on lobbying efforts to weaken/clarify the FCPA. In yesterday's NYTimes, Gretchen Morgenson commented upon the movement to prevent the CFTC from bringing transparency to the swaps market. In a November 4 piece, WSJ's Michael Rapoport detailed Jon Corzine's successful July 2011 campaign, on behalf of MF Global Holdings, to block a CFTC proposal "that would have placed tighter restrictions on how futures-trading firms can invest cash sitting in customer trading accounts." (Prescient move, Jon.) Most or all of the GOP candidates favor repeal of Dodd-Frank. If a Martian fell to Earth he/she/it would never believe that the same financial elites who brought us to the edge of ruin are still having so much success calling the regulatory shots.

FCPA clearly needs clarification. DOJ, in typical fashion, has given the statute the broadest possible interpretation. But don't expect any significant weakening. Why? FCPA is a cash cow. Big companies, most of whom are quite vulnerable, will do anything to avoid a civil or criminal trial. FCPA becomes a cost of doing business. The money flows into the government. Many of the DOJ attorneys flow into private practice. Because big companies do not want to risk losing at trial, bringing FCPA cases and obtaining huge monetary settlements, at least against those companies, is like shooting fish in a barrel. In other words, the cases are easy to do–just like insider trading cases. They bring big headlines. So the public is diverted from thinking about DOJ's remarkable failure to systematically investigate the top tier entitities and individuals who facilitated the worst economic catastrophe since the Great Depression.

(wisenberg)
SEC’s Dodd-Frank Whistleblower Regulations Take Effect Today. Corporate America Expects More FCPA Woes.

August 12th, 2011

Politico has a story about it here. The new regs implement Section 21F of the Dodd-Frank Act, which authorizes the SEC to award 10 to 30 percent of the monetary sanctions it recovers in a given case to a qualified whistleblower. What seems to most annoy the business community about the implementing regs is the SEC's insistence that whistleblowers are under no obligation to make use of a company's internal complaint procedures before running to the SEC. But the regs do say that an employee who goes through internal company whistleblower protocols is eligible for a Dodd-Frank whistleblower award if his/her employer subsequently self-reports to the SEC, based on the whistleblower's complaint, and a recovery is had. Further, an employee has a 120-day grace period after whistleblowing to his/her company, within which to bring his/her complaint to the SEC. Finally, in determining the amount of a whistleblower reward, the SEC will consider whether the whistleblower made use of his/her internal company procedures. The new regs contain enhanced anti-retaliation provisions as well, which prohibit direct or indirect retaliation for making whistleblower complaints to the SEC and other government entities.

There is an inherent tension between the anti-retaliation provisions and the SEC's and DOJ's often-emphasized warnings to companies that they should have vigorous and authentic internal whistleblower procedures. What if a company's pre-existing compliance policy requires the prompt internal reporting of whistleblower complaints? Can a company punish an employee who ignores such a provision and goes straight to the SEC? What if the employee declines to internally report, even after going to the SEC, because he/she feels that the company procedure is a sham? My guess is that such punishments will occur and that they will be deemed to run afoul of the anti-retaliation provisions. The retaliatory response is an instinctiual, persistent, and virtually universal impulse. It is really hard to eradicate.

(Wisenberg)
Will WikiLeaks Spur the Government to More Aggressively Promote Dodd-Frank’s Bounty Provisions?

December 1st, 2010

Guest Blogger – Victor Vital

Much has been written about the new bounty-provisions in the Dodd-Frank bill passed this summer. SEC-regulated companies are bracing themselves for an uptick in enforcement actions stemming from whistle-blowers. Also legal commentators and the compliance community are very concerned about the new bounty provisions that they fear will incentivize whistle-blowers to bypass compliance programs that companies have spent considerable sums of money and effort creating, partly in response to government regulation.

Now enter WikiLeaks. WikiLeaks is the topic de jour, with its market-moving impact demonstrated by Bank of America’s 3% stock decline in response to speculation that it is an imminent target of WikiLeaks. (see WSJ story – here). Of interest to readers of this blog is whether WikiLeaks will cause the SEC and the CFTC to become even more aggressive than they may have previously planned to be in encouraging whistle-blowers to come forward and in rewarding those whistle-blowers. Given the government’s great consternation at WikiLeaks’ disclosures, it seems natural that the government might step up its efforts to encourage whistle-blowers to disclose original information of corporate misconduct through government-sanctioned channels. Just something to ponder.

Victor Vital is partner at Baker Botts L.L.P. whose practices focuses on white collar criminal defense and complext litigation matters.
SEC Weighs In With Proposed Dodd-Frank Whistleblower Rules

November 4th, 2010

The SEC has issued SEC Proposed Dodd-Frank Whistleblower Rules in order to implement Section 21F of the Exchange Act. Section 21F, entitled Securities Whistleblower Incentives and Protection, was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The SEC is seeking public comments on the proposed rules, which comments are due by December 17. Some commentators believe that the generous bounty provisions of Dodd-Frank will undermine the many corporate compliance programs put in place or strengthened in the wake of Sarbanes-Oxley.

(wisenberg)
Dodd-Frank Criminal Provisions

July 22nd, 2010

Here are NACDL's updated materials on the new criminal provisions found in Dodd-Frank. Hat tip to NACDL's white-collar guru, Shana Regon.

(slw)

Tag: Dodd-Frank

Monday Morning Rant

SEC’s Dodd-Frank Whistleblower Regulations Take Effect Today. Corporate America Expects More FCPA Woes.

Will WikiLeaks Spur the Government to More Aggressively Promote Dodd-Frank’s Bounty Provisions?

SEC Weighs In With Proposed Dodd-Frank Whistleblower Rules

Dodd-Frank Criminal Provisions