Yesterday I wrote about how Wall Street is starting to move away from lobbying against Dodd-Frank, to actually implementing it. Today, I find myself writing about another sign that Wall Street is losing its battle against Dodd-Frank, and this time it comes from a federal judge. For Wall Street, used to winning in court, this… Continue Reading
This week the trial of former UBS trader Kweku Adoboli, arrested in September 2011 on charges of fraud and false accounting, takes center stage in the banking world. Adoboli was arrested in connection with a $2 Billion trading loss at UBS in 2011. Adoboli had been contacted by compliance officers with questions about some of… Continue Reading
It’s been a tough couple of years for consumers. They are increasingly relied upon to fuel the economy in the United States and around the world (stock prices tumble from Tokyo to London to Wall Street when American consumers even hint at lowered confidence and spending). But they are seeing their own legal rights being… Continue Reading
Following recent lawsuits, court decisions, and presidential debates, more Americans than ever are becoming familiar with the Dodd-Frank Act, which was passed in 2010 to increase the government’s ability to regulate big banks. Many politicians and lobbyists have argued for repealing the Dodd-Frank Act, but a recent New York Times editorial poses an interesting question:… Continue Reading
Yesterday, Richard Cordray, Director of the Consumer Financial Protection Bureau (“CFPB”), appeared before the House Committee on Financial Services to summarize and respond to questions on the CFPB’s semi-annual report, released on July 30th and available here. Cordray took a calm and measured approach to presenting the CFPB’s work thus far. He highlighted the substantive… Continue Reading
We were all happy to see the Dodd Frank act of 2010 come to pass, but unfortunately, as the New York Times reported this week, the CFTC is pushing back the deadline for banks to comply. The CFTC released a statement Monday, announcing a package of reforms on derivatives trading, a notoriously dark corner of… Continue Reading
It’s about time. Under the now toddler age (2-year old) Dodd-Frank whistleblower program, the SEC finally granted an award. Yes, an award to a whistleblower. And the award was the maximum percentage allowed: 30% of what the SEC recovered. And the bad news: well what have they been doing for two years – one award? … Continue Reading
Scanning headlines today, I saw words that I never thought would go in the same sentence together: “In $440 Million Trading Error, Upside of Wall St. Failures.” An upside? To a Wall Street Failure? Well, this New York Times article argues that failure in the financial system actually helps to improve the financial system, a… Continue Reading
Whether you know it or not, at this moment, you are most likely a party to multiple contracts that have binding mandatory arbitration clauses as a stipulation for dispute resolution. What this means is that if you have a dispute with the company who you’ve entered the contract with, you are unable to sue them… Continue Reading
Today government regulators from the SEC and CFTC testified before the Senate’s Banking Committee. They came before the committee to testify about the needs of much more comprehensive regulation regarding derivative markets. In 2010 Congress passed the Dodd-Frank reforms, which were partly aimed at wrangling in wild, out of control, derivative markets that aided the… Continue Reading
Has anything really changed since the financial crisis of 2008? It seems that the too-big-to-fail banks are still too-big-to-fail. If you are reading this now, you are obviously aware of JPMorgan Chase’s disclosure of more than $2 billion in losses last week as a result of what time and time again are referred to as… Continue Reading
All aboard and full steam ahead on the Volcker Rule Train. Next stop: Final Draft. ETA: September, 2012? At least that’s what an article by Ben Protess and Peter Eavis predicts, citing anonymous sources with knowledge of the issue (a journalist’s best friend). The Dodd-Frank Bill initially set a deadline of July 2012, but there… Continue Reading
Cross Senator Chuck Grassley, Iowa (R) at your own peril. Especially on the topic of whistleblowers. Senator Grassley, who has served on the U.S. Senate for more than three decades, has been an outspoken and courageous proponent of the benefit of whistleblowers. As a conservative, fiscally responsible public servant he understands the tremendous value—return on… Continue Reading
In Wednesday’s Wall Street Journal, Scott Patterson and Jenny Strasburg break news that the SEC accidentally revealed Peter C. Earle’s identity to his company during the investigation of his supposed-to-be-anonymous whistleblower claim. In 2009, prior to the passage of Dodd-Frank and when whistleblowers were literally hundreds of times scarcer, Earle went to the SEC and… Continue Reading
Beware, whistleblowers. Once you attempt to point out wrongdoing, your company will more than likely come back at you hard. And when they do, be careful because the retaliation will be stealth-like. Protecting whistleblowers has become a priority in the Dodd-Frank era, so they don’t berate you, or fire you, or demote you. Instead, they… Continue Reading
The Consumer Financial Protection Bureau was at the heart of the Dodd-Frank reforms. It was not too long ago that if you whispered the initials “C” “F” “P” “B” to leaders of banks and other financial institutions they would turn ashen-faced and fall into a cold sweat. They bemoaned what they called the “unlimited” power… Continue Reading
Far from the sky falling and democracy being destroyed, whistleblowers are adding value to a critical area of government enforcement and I predict over time their role will continue to grow and become an ingrained component of the SEC’s mission.
Remember the financial crisis? That was because when push came to shove, there was no James Bond to diffuse these derivatives of mass destruction–none of the financial “innovators” who created them had any idea how they functioned. Fortunately the principles of the CFTC’s new rules are basic and protective.
It will be okay, big guys. Investment banks will allow for the liquidity you supposedly so dearly fear losing. The market will adapt and the reduced risk in the U.S. financial system will restore confidence and integrity to the markets. The economy grew for decades under the Glass-Steagall Act. Would we really be upset to see that growth again–growth all can benefit from, not just traders?
Yesterday, regulatory heads from the SEC, Federal Reserve, FDIC, and CFTC addressed two congressional subcommittees regarding the Volcker Rule. They showed spine, commitment and solidarity towards the Rule, which should give heart to Main Street. It’s about time.
A party wins the election and they must be allowed to govern. If they fail to do so, vote them out of office in two years or four years, but allow them to fulfill the mandate of the electorate… We need to give Dodd-Frank and Richard Cordray a chance to govern.
Barney Frank leaves us at a time when Washington needs him more than ever… We will miss his quick wit, outspoken courage, unconventional speaking style, and most importantly, his legacy for speaking from the heart–something we don’t get enough of in our nation’s capitol.
At least once a week a new report comes out detailing inadequacies or improprieties by one or more of the companies involved in the housing bubble and financial crisis… While we read the reports and follow the news, the foreclosures continue, along with the unregulated credit ratings, robo-signings, and predatory lending. Nothing material about our current practices has changed.
Is this former 5-time “Jeopardy!” champion ready to follow rock star Elizabeth Warren as the first director of the Consumer Financial Protection Bureau? Consumers can only wait and hope for the best.