The developments and issues related to the structure and operation of the U.S. Capital Market in the context of an evolving global securities market, (1960-2015); The causes and effects of the “Financial Meltdown” (2007-2009); Assessing the legislative and regulatory reforms in the U.S. and abroad, including government “bailouts” and the implementation of Dodd-Frank by financial regulators and EU and other efforts to deal with endangered financial institutions.
Significant securities and financial services regulatory and enforcement policies and actions (2010-2015); [e.g., Insider Trading: from Cady Roberts in 1961 to current Information Trading Networks; Extraterritorial reach of US securities laws—Morrison v NAB and beyond; Duties of brokers, underwriters, investment advisers, and officers and directors of public companies,]; Hedge funds and private equity; Trading platforms (public and private).
I. The U.S., UK and EU have all taken actions to establish new and far reaching changes in their regulatory regimes, hoping to prevent a recurrence of the financial meltdown of 2007-08 that resulted from major regulatory and business failures and the often irresponsible structuring and sale of complex, highly leveraged and risk-laden securities. The US stock market indices are again at near record highs (e.g. the DJIA at 18,000+). Is a new bubble building?
Do the broadened regulatory powers being entrusted, primarily to the central banks, go too far? Are the central banks the right regulators to oversee these areas? For example, will the U.S. FSOC’s efforts in defining and containing “systemic risk” and implementing “orderly liquidations” of troubled financial firms, be effective? What is a SIFI?
II. This course focuses on such basic questions as: What is “The Market” and how does it really work? How is the market for securities trading structured in the United States? How did we get into the financial mess of 2007-9? How did Lehman, Bear Stearns, AIG, Merrill Lynch and Citi happen? Are government bailouts inevitable? What is the effect of “globalization” on these markets? Are we now headed for another financial crisis? Have the lessons of 2006-09 been learned or forgotten?
What are the key issues of structure and regulatory policy occasioned by the financial crisis barring the technological advances in the development of trading platforms, speed of executions (“Flash Trading”), and virtually instantaneous transmission of market sensitive information?
III. We will review important court decisions, involving both private and SEC actions involving insider trading, manipulation, and other securities law violations. What have been the effects of the criminalization of Sec. 10(b)? How do the SEC and DOJ settlement processes work? What of the recent criticism of the SEC’s use of administrative hearings instead of federal court actions in cases involving charges against brokers, investment advisers, and their firms? Also, the extent of the extra-territorial reach of U.S. securities laws after Morrison, as well as the application of the “breach of fiduciary duty” standard to brokers.
We shall also review the operations of investment companies, hedge funds, e.g., the application of standards of “best execution” and the regulatory efforts to deal with “soft dollar” “revenue sharing” and “dark pool” trading.
An understanding of these issues in the context of a global market and financial crises (past and potential) is essential to any lawyer or financial services executive interested in the functioning of capital markets and the development of effective regulatory standards.
Selected financial service executives, law firm partners and government officials will discuss their views of the regulatory policies that affect their organizations.