by The Compliance Exchange on June 22, 2012
Liquidnet Says SEC Investigating Dark-Pool Disclosures [BusinessWeek] The U.S. Securities and Exchange Commission is investigating Liquidnet Holdings Inc. for shortcomings in how the dark-pool owner guarded information about firms using its platform. SEC staff requested information about Liquidnet’s equity capital markets business, the operator of two stock venues said yesterday in an e-mail to clients obtained by Bloomberg News.
Wash Trading by High-Frequency Firms Said to Face Scrutiny [SFGate] High-frequency trading firms are drawing scrutiny from U.S. regulators seeking evidence that they may be distorting market prices by conducting transactions with themselves, said two people with knowledge of the matter. So-called wash trades, in which a party buys a contract from itself, could be executed inadvertently by firms with multiple algorithms active in the same stock or derivative, said the people, who requested anonymity because the review isn’t public.
China’s Top Regulator Woos Investors [BusinessWeek] Carrie Pan is about as intrepid as they come. Since she began investing in Chinese stocks six years ago, the 29-year-old Shanghai accountant has seen almost half the value of her portfolio evaporate, including a 40 percent loss last year alone. Undeterred, Pan recently bought 1,000 shares of Yang Quan Coal Industry Group.
Goldman Sachs Fails To Get Investors’ CDO Suit Dismissed [Bloomberg] Goldman Sachs Group Inc. (GS) failed to win the dismissal of a lawsuit brought by shareholders claiming they were harmed by conflicts of interest related to collateralized debt obligation transactions. The U.S. Securities and Exchange Commission sued Goldman Sachs in April 2010, alleging fraud tied to CDOs that contributed to the worst financial crisis since the Great Depression. Goldman Sachs’s shares dropped about 13 percent after the lawsuit was filed.
Bank Investors Dismiss Moody’s Cuts As Years Too Late [Bloomberg] Moody’s Investors Service suffered a downgrade of its own as markets responded to the company’s rating cuts yesterday of 15 of the world’s largest banks by bidding up the value of their stocks and bonds. Shares of all the firms affected by yesterday’s action rose as of 10:18 a.m. in New York, and the cost to protect Morgan Stanley (MS) debt against losses dropped to the lowest in more than seven weeks
Italians Dodge Property Tax In Test For Monti’s Austerity [Bloomberg] Luciano Di Pardo, a lawyer in Milan, is dodging Italian Prime Minister Mario Monti’s new real estate tax. “I didn’t pay it,” Di Pardo, 75, said of the levy that was the centerpiece of Monti’s austerity budget. “I get that we are on the edge of failure and disaster, but you can’t keep taking from ordinary people.”
Ernst & Young Cleared By U.K. Regulator Over Lehman Work [Bloomberg] Ernst & Young LLP won’t face legal action in Britain over the way it dealt with Lehman Brothers Holdings Inc.’s off-balance sheet transactions in 2007, the country’s accounting regulator said. The probe that started in June 2010 found no wrongdoing by the firm in its accounting for Lehman’s so-called Repo 105 and Repo 108 transactions, which helped the bank raise short-term funds before its collapse, the Financial Reporting Council said today on its website.
CFTC guidance on HFT delayed, says Chilton [Risk] Interpretive guidance on high-frequency trading (HFT) due to be released by the Commodity Futures Trading Commission (CFTC) this week has been put off until a later date, commissioner Bart Chilton has told Operational Risk & Regulation. At the OpRisk Europe conference in London last week, Chilton told the conference to expect the guidance this week, but it has now been delayed.