ComplianceX News Of The Day 5/1/12

Steven Davis, ex-chairman of Dewey.Dewey & LeBoeuf Said to Encourage Partners to Leave [NYTimes] Dewey & LeBoeuf, the New York law firm crippled by financial mismanagement, an exodus of partners and a criminal investigation of its former chairman, encouraged its partners on Monday evening to look for another job, according to an internal memo. The firm’s leadership has been scrambling in recent days to stave off failure by merging with another law firm and persuading its lenders not to push it into liquidation. “All partners,” said the memo, which was reviewed by The New York Times, “are encouraged to seek out alternative opportunities.”

JPMorgan Chase & Co. Barry Zubrow JPMorgan’s Zubrow Says Fed Risk Rule May Hurt Markets [BloombergJPMorgan Chase & Co. (JPM) said a Federal Reserve proposal to cut risk by capping a bank’s dealings with any one lender, corporation or foreign government fails to strike the “correct balance” and may harm financial markets. The plan “could destabilize markets,” Barry Zubrow, executive vice president of corporate and regulatory affairs for JPMorgan, said yesterday in a comment letter to the central bank. The Fed is reaching “well beyond” the Dodd-Frank reform legislation with “disruptive” standards that duplicate or conflict with other rules and directives, he wrote.

The exterior of the U.S. Department of Justice headquarters building in Washington, July 14, 2009. REUTERS/Jonathan ErnstU.S. Adds Muscle To Financial Fraud Investigations [Reuters] An Obama administration task force probing misconduct that fueled the financial crisis is increasing its ranks, adding five financial analysts and 10 new federal prosecutors spread across the country, according to a senior Justice Department official. The increased staffing reflects a new push by the administration to aggressively pursue cases against firms and individuals who contributed to the 2007-2009 financial crisis, especially ahead of the November election. The U.S. Justice Department has so far brought few cases against high-profile targets since the crash.

Bank Reforms Are Half-Way Done, FSB’s Carney Says [Reuters] Efforts to reform the world financial system to prevent a crash like the one that helped trigger the 2008 recession are half complete, and the challenge now is not to lose the momentum, Bank of Canada Governor Mark Carney said on Sunday. In an interview with Canada’s Global TV, Carney, who also heads the international Financial Stability Board set up to fix financial systems, said it would take European countries months or years to rebuild their economies and financial systems.

Financial Regulator Hires Diversity Monitor [NYTimes] The nation’s consumer financial watchdog has set out to address another Wall Street problem: a lack of diversity. The Consumer Financial Protection Bureau, the new federal agency policing the financial industry, announced on Monday that it had hired a director for its Office of Minority and Women Inclusion. The unit will focus on promoting diversity at the bureau, its private contractors and the financial firms it oversees. Stuart J. Ishimaru, the former leader of the Equal Employment Opportunity Commission, was selected to lead the office.

Regulatory Focus on Hedge Funds Continues [Forbes] The regulatory focus on hedge funds continued during the first quarter of 2012, as new initiatives continued to roll out, and milestones in the implementation of rules put on the books last year were hit. For “large” hedge funds, we see the summer deadline for filing the Form PF looming large. Required by the Dodd-Frank Act, the Form PF asks for a vast amount of information on hedge fund positions, exposure and risk. While the information will only be available to the government for “risk oversight” purposes, large filers are not only preparing the form itself right now, they are analyzing how to respond to the inevitable requests from investors for the information they provided on the form.  While smaller hedge funds have a first filing date in early 2013, they will face similar questions from investors (but a smaller form requiring less information).

SEC Names New Enforcement Division Deputy Director [Main Justice] The Securities and Exchange Commission named George S. Canellos as its new Deputy Director of the Enforcement Division Monday. Canellos, 47, has served as director of the commission’s New York regional office since July 2009. He is also a former Assistant U.S. Attorney for the Southern District of New York, where he was chief of the Major Crimes Unit and also worked on securities and commodities fraud. He will begin his new post June 4.

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