Sheila Bair Wants To Break Up JPM Chase, MasterCard Loses EU Ruling, Eurozone Needs A Regulator: CompliancEX News 5/25/2012
by The Compliance Exchange on May 25, 2012
Facebook IPO Scrutiny Forcing It To Grow Up In Washington [Bloomberg] Congressional questions about Facebook Inc. (FB)’s initial public offering are forcing its nascent lobbying operation to play defense as it builds the political support companies need before coming under scrutiny. “They have not made the connections and personal relationships they would like to have made,” former Senator Byron Dorgan of North Dakota, a senior policy adviser at law firm Arent Fox LLP, said in an interview. “I’m sure they’re going to be doing double duty trying to introduce themselves and at the same time answering questions about the IPO.”
Hagens Berman Files Securities Class Action against Facebook, Zuckerberg and Underwriters: Continues Insider Trading Investigation Against Selling Shareholders [MarketWatch] Hagens Berman Sobol Shapiro, an investor-rights law firm, today announced that it has filed a securities class-action lawsuit against Facebook, Inc. FB -3.60% , officers, directors and underwriters of the company’s Initial Public Offering (IPO) on behalf of investors relating to allegations of whisper estimates withheld from all but a few select investors. The complaint, filed May 24, 2012, in the United States District Court for the Northern District of California, as Chang et al. v. Facebook, Inc. et al., case number 12-cv-2680, alleges that Facebook, Inc., Mark Zuckerberg, David A. Ebersman, David M.Spillane, Marc L. Andreesen, Erskine Bowles, James W. Breyer, Donald E Graham, Reed Hastings, Peter Thiel, Morgan Stanley & Co. LLC MS +0.45% , J.P. Morgan Securities LLC JPM -0.77% , Goldman, Sachs & Co. GS +0.52% , Merrill Lynch BAC +0.35% , Peirce, Fenner & Smith Incorporated and Barclays Capital Inc. BCS -1.59% violated Section 11, 12 and 15 of the Securities Act of 1933.
George Says Directors Should Meet Fed Standards or Resign [SFGate] Federal Reserve Bank of Kansas City President Esther George said that directors at the Fed’s regional banks who don’t meet the central bank’s standards for impartiality should step down. “Bankers should serve,” George said in a statement released today by the Kansas City Fed. “There are high standards that apply to Reserve Bank directors, and when an individual no longer meets these standards, the director resigns voluntarily to allow someone who does meet the criteria to serve.”
Breaking Up Chase: Good For Shareholders And Taxpayers, says Sheila Bair [Fortune] When I was a child, my sister and I loved watching the goings-on at a chicken farm near my grandmother’s house in rural Kansas. Chickens are interesting social animals, resembling, somewhat, the way we in Washington interact with one another. They were always on the lookout for one vulnerable bird that they would corner in the coop and then peck relentlessly on its head.
MasterCard Loses Challenge Against EU Fees Ruling [Reuters] Europe’s second-highest court on Thursday threw out MasterCard’s (MA.N) challenge against an EU ban on its cross-border credit card fees. The European Commission said in its December 2007 decision that MasterCard’s cross-border multilateral interchange fee (MIF) levied on retailers’ credit and debit card transactions breached EU antitrust rules and had to be changed.
BOE’s Clark Says Bank Rules Front-Loaded More Than Intended [Bloomberg] Bank of England interim Financial Policy Committee member Alastair Clark said policy makers may have ended up “front-loading” new rules more than planned in an environment that remains threatening. “In our international regulatory initiatives, we may inadvertently have ended up front-loading the regulatory response more than was intended,” Clark said in a speech in London today. “Even though, for example, extended timetables were set for the implementation of Basel III, once the end point was announced market pressures have tended to foreshorten the effective period of adjustment.”
Facebook IPO reignites JOBS Act debate – What’s the latest from FINRA? – Net neutrality resolutions stay alive – FCC to launch drone inquiry – Personnel bytes [POLITICO] FACEBOOK IPO REIGNITES JOBS ACT DEBATE — Critics of the recently passed JOBS Act are seizing on Facebook’s IPO troubles, arguing that the technical and financial issues surrounding its first day of trading reflect the law’s big flaws. Much of the criticism centers on the ways in which the JOBS Act relaxes the regulatory requirements of companies pulling in less than $1 billion each year. Both Sens. Jack Reed and Sherrod Brown separately blasted that change to securities laws in statements. “During the debate over the misnamed JOBS Act there was a lot of talk about driving more companies toward the so-called IPO on-ramp, but little discussion and no hearings about the efficiency and transparency of the IPO system,” said Reed, who chairs the Senate Banking Committee’s panel on securities.
Eurozone Financial System Needs “Urgent Overhaul,” Including Banking Regulator [WashingtonPost] A top European Central Bank official says the 17 countries that use the euro need an “urgent overhaul” of their banking and financial system to deal with the debt crisis, including a multinational authority with the power to restructure and bail out banks. Peter Praet said in a speech Friday in Milan that the eurozone crisis has been undermining much of the crossborder financial markets’ integration brought about by the euro. In particular, bond and money markets now charge some countries much higher interest premiums because of a perceived increase in risk.
Wells Hands Over Mortgage Records [TWSJ] Wells Fargo has handed over hundreds of emails and other documents related to its mortgage-backed securities business to the Securities and Exchange Commission after being taken to court, according to a person familiar with the matter. The decision by the fourth-biggest U.S. bank to bow to the SEC’s demands for the information resolves a legal spat. “Wells Fargo continues to believe its disclosures in offering documents pertaining to residential mortgage-backed securities containing Wells Fargo mortgages were proper and appropriate,” a spokeswoman for Wells Fargo said.