Here are some interesting compliance stories from the past week: Chief Compliance Officers, SEC-style by Matt Kelly in Compliance Week‘s The Big Picture Griffin is the SEC’s first-ever chief compliance officer, and her arrival is long overdue. It stems from news that broke last May of an insider-trading scandal within the SEC, which is pretty … Read more »
Taxonomy and Compliance
Compliance often has to deal with a great big piles of data. When tackling a big pile of data, it helps to organize the data into a taxonomy. The taxonomy helps with analysis. Of course, just by choosing the nodes in the taxonomy you are influencing the view of the data. I was struck by … Read more »
The Similarites Between WaMu and GM
Never stop the production line! Yesterday, evidence came out that Washington Mutual knew about fraud in its residential mortgage originations. No surprise. There was lots of fraud in the heyday of the residential mortgage boom. What was surprising was that WaMu allowed these loans to be sold to investors and packaged into residential mortgage backed … Read more »
Revisions to U.S. Sentencing Guidelines for Compliance Programs
At their April meeting, the U.S. Sentencing Commission voted to adopt changes to Chapter 8 of the Sentencing Guidelines Manual. That chapter defines an effective compliance and ethics program and has been one of the sacred texts of the compliance profession. Here is my summary of the changes: Changes to §8B2.1 In defining an Effective … Read more »
April 15 is Tax Day, Except for Flooding
With the recent flooding in Eastern Massachusetts, several counties were declared federal disaster areas. The bonus is that you have an automatic extension for filing your taxes. If you live in Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk or Worcester County in Massachusetts, you have until May 11 to file your income taxes. that applies for … Read more »
Nobody Saw It Coming? Magnetar Saw it Coming
After reading Michael Lewis’ The Big Short this weekend, it’s clear that some people saw the collapse of the residential mortgage market coming. This American Life had a story this weekend about another investor who also saw it coming: Magnetar Capital. (A magnetar is a neutron star with a magnetic field 100-1000 times stronger than … Read more »
SOX Whistleblower Protections at Mutual Fund Companies
We know that Sarbanes-Oxley offers protections to employees at public companies, but does it also protect employees at mutual fund companies? Yes. At least according to Judge Woodcock of the Massachusetts U.S. District Court. The Employees The decision is for two cases that were combined because of the common defendant. According to the decision, Jackie … Read more »
Weekend Book Review: The Big Short
Michael Lewis has put together a great book on subprime loans, home mortgage bonds and how their crash led to the Great Panic. The Big Short starts with this quote: The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest … Read more »
Compliance Bits and Pieces for April 9
Here are some recent compliance related stories that I found interesting: Bribe Fighter: The strange but true tale of a phony currency, shame, and a grass-roots movement that could go global By Jeremy Kahn in the Boston Globe What good is a currency that is not even worth the paper it’s printed on? That’s the … Read more »
FINRA and Placement Agents
Will FINRA step in to prevent a ban on placement agents working with government investors? You may remember that last August, the SEC published a proposed rule that would create a prohibition on paying a third party, such as a placement agent, to solicit a government client on behalf of the investment adviser: IA-2910. The … Read more »