Securities and Exchange Commission

Andrew Hill SEC’s ruling won’t make many Facebook friends

April 3, 2013 11:42 am by Andrew Hill

The digerati are having fun with the Securities and Exchange Commission’s ruling that US companies can use social media to distribute market-sensitive information such as earnings reports. “Facebook Flap Forces SEC Into 21st Century,” says Forbes.

Not so fast. The US regulator’s decision to drop its inquiry into Reed Hastings, Netflix’s chief executive, who boasted about new viewing figures on his personal Facebook page, is only an incremental advance into the new millennium. It makes sense for the SEC to acknowledge the growing use of social media (I’m guessing more people saw Mr Hastings’ Facebook post than have viewed any regulatory announcement in corporate history), but I don’t think the decision will prompt fearful CEOs to tweet their earnings much more than they do already – and, even if it does, it won’t make much difference to investors. Read more

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Posted in Media, Regulation, Technology |

Andrew Hill Why hedgies are lobbying for lower walls

January 16, 2012 5:31 pm by Andrew Hill

“Secretive hedge fund manager” is one of those adjectival pairings to rank with “flamboyant impresario” and “introverted computer programmer” as a journalistic cliché. So when I read the headline “Hedge funds lobby SEC over secrecy rule” in Monday’s FT, I naturally assumed the hedgies wanted the US regulator to erect even higher walls around them. Not so.

Colleague Sam Jones points out that at least part of the myth of secretive hedge funds is constructed on the regulatory legacy of rule 502(c) of Regulation D. This “arcane piece of Depression-era legislation… defines how the modern hedge fund industry operates”, outlawing general advertising and solicitation by funds but also making them paranoid about talking to any “unqualified outsiders”. The Managed Funds Association, the funds’ US lobby group, has written to the Securities and Exchange Commission seeking its elimination. Read more

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Posted in Advertising, Finance, Regulation, US |

Andrew Hill Rakoff is right not to settle for less than the truth

November 29, 2011 2:42 pm by Andrew Hill

I have a soft spot for US judge Jed Rakoff, who has just thrown a large legal wrench into the decades-old mechanism of redress between Wall Street banks, investors and the Securities and Exchange Commission.

I first came across him nearly 10 years ago when he presided over the extraordinarily complex litigation between JP Morgan and a bunch of insurers about offshore financing the bank had arranged for Enron. Witty, sharp, quoteworthy and unmistakeable – with his white beard, he looks like one of those wise judges who administer 23rd century justice in sci-fi movies – he is a journalist’s dream. Read more

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Posted in Banks, Regulation |

John Gapper Goldman does not want to not admit to fraud

May 28, 2010 3:01 pm by John Gapper

Goldman Sachs‘ attempt to settle with the Securities and Exchange Commission in the Abacus case on a lesser charge than fraud, which I and Francesco Guerrera wrote about today, is a reminder of the peculiar way in which US civil securities cases are often resolved.

The standard settlement involves a defendant being fined by the SEC, and disciplined in individual cases, but “neither admitting nor denying” the allegations. The SEC thus gets a scalp and avoids a court case, while the defendant avoids a conviction. Read more

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Posted in Finance |