Dodd-Frank Act

JPMorgan Loss Illustrates Difficulties of Adopting the Volcker Rule

May 22, 2012

JPMorgan Chase's $3 billion loss on derivatives trades has reignited a debate over what the final version of the Volcker Rule should include. A problem flagged by the bank's debacle is that there is no clear-cut answer to whether its actions would have violated the rule in its current form. "The fact is that proprietary trades and hedges look very much alike," says Peter Wallison, former general counsel of the Treasury Department.
 

What's the Holdup With Dodd-Frank Rulemaking?

May 08, 2012

The Volcker rule is slated to go into effect this July. One problem: A final version of the rule still doesn't exist. In fact, many of the final Dodd-Frank Act rules still aren't written. So what's the holdup? One impediment is that regulators must do better cost-benefit analysis after a court ruling last year. "That's a huge undertaking, and it's going to slow things down," says Hal Scott, a professor at Harvard Law School.
 

SEC Churns Out JOBS Act Guidance

April 24, 2012

Since the JOBS Act was signed into law early this month, the SEC has issued three separate sets of guidance and called for a round of comments. The swift action is surprising to some given the JOBS Act's not-so-investor-friendly reputation. "The SEC is known to dislike the JOBS Act, but this shows good sportsmanship by jumping in," says Andrew Fabens, partner at the law firm Gibson, Dunn & Crutcher.
 

Banks Get Two-Year Grace Period for Volcker Rule Compliance

April 20, 2012

The Federal Reserve Board issued a statement clarifying that banks will have two years after the effective date of the Volcker rule before regulators will begin enforcing it. The statement was aimed at calming fears that banks would need to be in compliance by July 21, when it is slated to take effect.
 

New Swap Rules Put Compliance Burden on Dealers

April 03, 2012

Swaps dealers finally have a clear sense of their new compliance duties—and should prepare themselves accordingly. The new rules require them to measure market, credit, liquidity, and foreign exchange risks daily, and that could have a broad effect on the swaps market. "Corporate treasurers are not paying any attention, but they may find themselves scrambling to comply," says Andrea Kramer, a partner at law firm McDermott, Will & Emery.
 

The Future of Compliance: Metrics and Communicating Risks

April 03, 2012

What's on the horizon for compliance and ethics? Metrics and communicating risks will dominate the agenda, say compliance executives. As companies expand overseas, they need better tools to measure and identify risk areas such as corruption. "The compliance function has become much more about metrics, especially for third-party vendors," said Brackett Denniston, general counsel at GE. More inside.
 

JOBS Act Inspires Criticism of Regulatory and Governance Rollback

March 27, 2012

The newest members of the public company ranks will now have five years to avoid corporate governance requirements, thanks to the JOBS Act passed by Congress last week. Critics say the measure will do little more than play to scam artists. "With securities fraud running at a record level ... any reasonable person would understand there needs to be adequate protection of investors," says Lynn Turner, governance activist and former SEC chief accountant.
 

CFTC Issues External Business Conduct Standards for Swap Dealers

March 20, 2012

The Commodity Futures Trading Commission has adopted final business conduct standards for how derivatives traders report the details of their over-the-counter swap transactions. Critics say some terms are still vague. "Until all the open questions get sorted out, it's going to be difficult to feel comfortable that you're in full compliance," says Guy Dempsey of the law firm Katten Muchin Rosenman.
 

SEC Turns Up the Heat on Private Equity, Hedge Funds

March 06, 2012

The SEC has been taking a harder look recently at the business practices of hedge funds and private-equity firms, and now that the Dodd-Frank Act requires many more funds to register with the SEC, more scrutiny can be expected. "The SEC staff has been warning the private-equity industry that it plans to significantly step up enforcement actions," says Robert Burwell, a partner at law firm Latham & Watkins.
 

More Clues on SEC Whistleblower Office

February 28, 2012

The SEC now receives an average of seven tips each day to its new Office of the Whistleblower, according to agency officials, and compliance departments are scrambling to shore up their own internal compliance operations in response. "Most of the activity we see is on investigation protocols around hotline calls," says Steve Kuzma of Ernst & Young. More inside.
 

Regulatory Changes at Record Levels

February 14, 2012

Regulators around the world issued an average of 60 new or amended rules per day last year, according to a study from Thomson Reuters, and 2012 is likely to bring still more thanks to the Dodd-Frank Act and similar laws. "For end users, there's a scary amount of work ahead," says Alex Robson, chief editor of the report. A round-the-world tour of compliance officers' headaches is inside.
 

Study: Whistleblowers Want Anonymity, Monetary Rewards

January 10, 2012

Whistleblowers are far more likely to report wrongdoing if they are given a monetary reward, anonymity, and protection from retaliation, says a recent survey by law firm Labaton Sucharow. Since only the SEC is paying a reward right now, that's bad news for compliance departments. But two-thirds of respondents said they weren't aware of the SEC's whistleblower program launched last year. More results inside.
 

2012 Will Be Another Busy Year in Regulation and Compliance

January 03, 2012

Amid holiday cheers and winter chills, legal experts say 2012 will be yet another busy year in regulation. Inside, we take a look at what's next for the SEC's Office of the Whistleblower, rulemaking under the Dodd-Frank Act, insider trading enforcement, and more.
 

Business Litigation: A Look Into 2012

January 03, 2012

A volatile market, a tough regulatory environment, and enforcement actions against big banks will dominate business litigation in 2012, with many lawsuits targeting the financial services industry. As long as banks keep dropping "bombshells," they will continue to be "piñatas for shareholder lawsuits," says Michael Stocker, partner at law firm Labaton Sucharow. More inside.
 

More Dodd-Frank Compensation Rules Coming in 2012

December 06, 2011

The SEC says it is gearing up to work on new compensation rules early in 2012, including several new disclosure requirements that are part of the Dodd-Frank Act. The new rules include disclosure of the ratio of CEO pay to employees and the relationship between executive compensation and performance, new clawback provisions, and rules on hedging against executive and director company stockholdings. Details inside.
 

SEC Outlines Ambitious Agenda for 2012 on Dodd-Frank and Beyond

December 06, 2011

Despite criticism that it has fallen far behind schedule, the SEC says it will complete the majority of the remaining rules required by the Dodd-Frank Act next year in addition to several other projects. "With the budget that they have, the SEC has to look at its priorities," says Christopher Robertson, a partner at law firm Seyfarth Shaw.
 

Winter of Dodd-Frank Delays

November 29, 2011

It's been nearly 18 months since Congress passed the Dodd-Frank Act, and many of the rules remain to be finalized or even proposed due to delays and other roadblocks. Here's an update on what lies ahead for Dodd-Frank rulemaking, including rules on disclosure of CEO pay ratios, hedging, conflict minerals, and much more.
 

Whistleblower Complaints Speak Volumes

November 29, 2011

The SEC has published its first analysis of whistleblower complaints it has received, and compliance officers have plenty to digest. "Companies should be concerned. If you look in broad view, [the program] is still in its infancy, no award has been given out yet, and they are showing this number," says Steven Pearlman of law firm Seyfarth Shaw. A breakdown of all the data is inside.
 

OSHA Makes It Easier to File a Whistleblower Claim

November 22, 2011

Psst—looking for a roadmap to how OSHA investigates whistleblower complaints? The Occupational Safety and Health Administration has updated its Whistleblower Investigations Manual with new guidance paving the way for employees to file whistleblower claims. OSHA investigators also have new procedures to follow when investigating claims, and companies face more penalties for violations. Full coverage inside.
 

SEC Pursues Small Company Over Lax Internal Controls

November 22, 2011

The SEC is sending a message to small companies that it will pursue cases where internal controls are so poor that they don't reasonably assure accurate financial reporting. Case in point: Koss Corp., where CEO Michael Koss agreed to pay back $450,000 in compensation because he failed to recognize a fraud by another senior executive. "It's a shot across the bow," says Cynthia Krus, a partner at law firm Sutherland Asbill & Brennan.
 

Spending on Compliance Increasing

November 15, 2011

In a recent survey, 41 percent of the compliance officers polled said they expect their department's budget to increase in 2012, and nearly half expect it to at least stay the same. Companies expect to spend more on technology and training, partly due to new regulations such as the Dodd-Frank Act. "The regulatory environment for most companies is becoming more complicated," says Ed Petry, vice president of the Ethical Leadership Group. More results inside.
 

The Reasonable Person: Internal Audit's Role in Internal Investigations

November 08, 2011

Yes, sometimes the best response to an allegation of misconduct is to commission an external investigation—but in many cases, an internal investigation will do just as well. How can you assure objectivity and independence in those cases? Inside, Compliance Week Columnist José Tabuena explores internal audit's role in serving as the "reasonable person" whose expectations are what counts in court.
 

Volcker Rule Includes New Compliance Requirements for Banks

October 18, 2011

Federal regulators have finally unveiled their proposal for the Volcker Rule, a linchpin of the Dodd-Frank Act that would restrict proprietary trading and require expansive new compliance programs for banks to monitor and report on trading activity. "It shows the seriousness of the agencies to ... come up with a workable solution to put the concepts in practice," says Kevin Petrasic, partner at law firm Paul Hastings. More inside.
 

Ruling Increases Protections for Whistleblowers

October 11, 2011

A ruling by the Department of Labor's Administrative Review Board increases protections for whistleblowers, meaning companies will have to be even more vigilant about how they treat those who allege misconduct. The ruling faulted Halliburton for disclosing the identity of a whistleblower. It sets "a new standard for what constitutes an adverse employment action," says Steve Pearlman, a partner with law firm Seyfarth Shaw.
 

Large Banks Forced to Contemplate Their Mortality

September 07, 2011

Banking regulators are wrapping up new rules mandated by the Dodd-Frank Act that require large banks to explain how they should be dissolved in the event of bankruptcy. The plans, dubbed "living wills for banks," are drawn up long before the threat of bankruptcy appears. Banks are contesting how detailed the plans should be and to whom the rules should apply. More inside.
 

More Legal Challenges to Dodd-Frank Could Be in the Works

August 30, 2011

The U.S. Chamber of Commerce is mulling what rules of the Dodd-Frank Act to challenge next, now that it has defeated a rule to allow shareholder proxy access. Likely targets include proposed rules for conflict minerals, pay-ratio disclosures, and clawbacks. "We will focus specifically on rules and provisions that impact the ability of companies to raise capital and remain competitive globally," Chamber spokesman Tom Quaadman says.
 

SEC Faces More Scrutiny After Court Spiked Rule

August 23, 2011

When a federal appeals court last month overturned a rule to allow shareholder proxy access, it didn't just rebuke the SEC; it gave a roadmap to SEC critics eager to thwart the agency's many other forthcoming rules. Now those critics seem to be proceeding just so, firing at SEC proposals for executive pay, the mining industry, and more. Details inside.
 

D&O Insurer Offers Clawback Protection

August 23, 2011

The Federal Deposit Insurance Corp. recently adopted a rule allowing it to claw back compensation of officers and directors who contribute to the failure of a financial firm. Now insurance companies are unveiling policies that sidestep the rule by offering reimbursement of compensation recouped by the FDIC. Will such products stand up in court? More inside.
 

Companies Prepare for Executive Pay, Performance Disclosure

August 02, 2011

Per order of the Dodd-Frank Act, the SEC should soon propose rules that require companies to disclose the relationship between executive compensation and company performance. Although many companies already provide that information, some open questions remain, such as how companies should compare their performance metrics with peers. More details inside.
 

Building an Effective Training Program

July 26, 2011

With so many new regulations and accounting rules, many companies struggle to perfect training programs that keep employees ready to implement new requirements and avoid compliance risks. What makes an effective training program? Interactive components, continuous learning, and elements that keep employees engaged, for starters. More inside.
 

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Deloitte is conducting their annual Look Before You Leap: Managing Risks in Global Investments survey to better understand the approaches companies are taking to address compliance and integrity-related risks in emerging markets. 

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