Compliance Bricks and Mortar for November 3

These are some of the compliance-related stories that recent caught my attention.


Yes! Compliance Goes Hollywood! by Matt Kelly in Radical Compliance

Compliance officers, rejoice! The fame and recognition so long denied to you may finally be at hand! The FX network has commissioned the pilot for a new TV series STARRING A COMPLIANCE OFFICER!!! It will be a comedy, of course. Is there any other way to look at this profession? [More…]


U.S. SEC wrongly collected $14.9 billion from defendants: lawsuit by Nate Raymond

The U.S. Securities and Exchange Commission has been hit with a class action lawsuit seeking to recover $14.9 billion that lawyers for an investment firm’s liquidating trustee say should not have been collected given a recent U.S. Supreme Court ruling. The lawsuit was filed in federal court in Boston on Thursday by the liquidating trustee for F-Squared Investment Management LLC, who contends the firm paid the securities regulator $30 million that the SEC was not actually authorized to collect.[More…]


Admitting Wrongdoing to the SEC: An Empirical Study of Admissions in SEC Settlements by Verity Winship and Jennifer K. Robbennolt

What is the connection between what the SEC actually does and what it says it will do? In 2013, the SEC unveiled a new policy requiring some enforcement targets to admit wrongdoing when they settled with the agency. In An Empirical Study of Admissions in SEC Settlements, we analyze settlements from before and after the introduction of this policy to determine how the SEC’s practice lines up with its new approach to admissions. We find an uptick of admissions following the policy announcement, with the highest number in FY2016.  Using an inclusive definition of admissions, we identify fewer than one hundred settlements containing admissions that were announced during the seven years of our study (FY2011-FY2017). [More…]


The Promise and Perils of Crowdfunding by John Armour and Luca Enriques

In our article, The Promise and Perils of Crowdfunding: Between Corporate Finance and Consumer Contracts, we sketch a road map for the regulation of crowdfunding for start-ups. We begin by considering the use of crowdfunding and the characteristics of typical crowdfunding contracts. One such contract—the “reward” model, which rewards funders with units of product—offers firms and funders the promise of reducing uncertainty by generating new information about consumer demand. By using the reward model, founders capture synergies between their product and capital markets. Rather than raise capital and aggregate information about likely success as a by-product (through the price mechanism), they tap the product market, thus directly testing demand, and raise capital as a by-product. [More…]

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