These are some compliance-related stories that recently caught my eye: How Well Do Financial Markets Separate News from Noise? Evidence from an Internet Blooper by Carlos Carvalho, Nicholas Klagge, and Emanuel Moench in Liberty Street Economics How efficiently do financial markets process news of unexpected events? This question becomes particularly salient now, as multiple events … Read more »
Reckless Endangerment
So what caused the 2008 financial crisis? We know that the direct cause was the meltdown in the US housing market. I think we are still trying to put together the pieces and point the finger of blame. It was a big bubble and the explosive reaction when the bubble burst. It took many different … Read more »
Lifting the Ban on General Solicitation
From a securities compliance perspective, when you see an advertisement or an email seeking capital for an investment opportunity there is most likely a problem. Now there is a bill in Congress that would change that view. When selling a security, you need to register the security or find an appropriate exemption from registration. Most … Read more »
Crowdfunding
It’s hard to raise capital. The regulatory restrictions imposed by securities laws make it harder to do so. As any bright-eyed entrepreneur with a dream project will tell you, the lawyers and the securities laws make it very expensive and time consuming to raise capital for a small project. The central goal of the Securities … Read more »
Stealing Private Equity Investment Opportunities
Private equity transactions are not outside the scope of enforcement by the Securities and Exchange Commission. The SEC filed a case against a former principal of an investment adviser that manages private equity funds. The charge is that he “usurped …[a] lucrative investment opportunity in a private company.” At this point, the SEC has only … Read more »
Compliance Bits and Pieces for September 30
These are some compliance-related stories that recently caught my eye: “Is there anything connected with this accelerator that involves the security of the country?” by Chris Yeh in Adventures in Capitalism “It has only to do with the respect with which we regard one another, the dignity of man, our love of culture. It has … Read more »
Happy New Year
There is little similarity between Rosh Hashanah, one of the holiest days on the Jewish calendar, and the American midnight drinking bash and daytime football game. Read more »
Ethisphere and the New York Stock Exchange
This morning, the Ethisphere Institute is ringing The Opening Bell at the New York Stock Exchange with some of the NYSE-listed 2011 World’s Most Ethical Companies. I guess the NASDAQ companies are not invited.) The purpose is to recognize the connection between ethical business practice and increased business performance. NYSE-listed 2011 World’s Most Ethical Companies … Read more »
The Echoes of Madoff at the SEC
The Madoff scandal is one of the low points in the history of the Securities and Exchange Commission. Every Congressional hearing or SEC-basher inevitably uses the failure to catch Madoff as evidence of the ineffectiveness of the SEC. In a continuing journey down the rabbit hole, the SEC’s Inspector General David Kotz released his 123-page … Read more »
But the Computer Did It!
The Securities and Exchange Commission brought charges of securities fraud for concealing a significant error in the computer code of the quantitative investment model. I found this case to be interesting because it was not flawed human decisions, but flawed computer decisions. However, we still live in the age where computers do what we tell … Read more »