by The Compliance Exchange on August 17, 2012
After MF Global, a Need to Find New Ways to Protect Customers [DealBook] The MF Global story still lingers as an insolvency matter, but now we hear rumblings that there will be no criminal charges. It may well be that no crimes were committed, but if this is so, it is time to seriously rethink how broker-dealers handle customer property. In theory, customer property at a brokerage firm should be even more secure than money in a bank, because banks use fractional reserves, meaning that by design they have “used” a large part of the deposits, while customer property at a brokerage firm is supposed to be segregated in a special fund at a third-party custodian bank.
‘Broken’ Fund Shifts the Blame [WSJ] Nearly four years after the collapse of Lehman Brothers Holdings Inc. “broke the buck” at his money-market mutual fund, Bruce R. Bent is blaming the U.S. government. The 75-year-old Mr. Bent and his son, Bruce Bent II, are set to go on trial in October on civil charges of misleading investors, ratings firms and trustees of the Reserve Primary fund as it wobbled in September 2008.
Swaps Between Company Affiliates Exempted Under CFTC Proposal [BusinessWeek] The U.S. Commodity Futures Trading Commission proposed exempting trades between units of the same company from Dodd-Frank Act clearinghouse rules designed to limit risk in the $648 trillion swaps market.
Russian Banker’s Money-Laundering Case Risks Worse U.K. Ties [SFGate] Russia and the U.K. risk further souring ties as authorities are set to clash over potential money-laundering and bribery charges against a former Russian official at a London-based international lender.
No ‘Phishing’: Banks Try to Sink Scammers [WSJ] If banks have their way, Internet scammers soon may have a tougher time deceiving people with bogus bank websites. Financial-services companies are snatching up new, exclusive Internet addresses in an effort to crack down on cybercrime, which one analyst said cost the industry an estimated $2.5 billion last year.
Platinum Lawsuit Against CBOE Revived [FINalternatives] A hedge fund’s lawsuit against a major exchange has new life. A state appeals court in Illinois overturned a lower-court ruling that threw out Platinum Partners’ complaint against the Chicago Board Options Exchange.
In Japan, A Client Service Is Leaks [WSJ] A Japanese regulatory crackdown on insider trading suggests that stockbrokers here have leaked confidential information more as a service to good clients than for direct profit.
Lawsky, Standard Chartered, and the case of the missing billions [FinancialNews] If US banking regulation was a seventies cop drama, Benjamin Lawsky would probably drive a black Lincoln Continental. He would also stub out cigarettes on his bare palms and spend his evenings shining desk lamps into the terrified eyes of bank executives.