The Supreme Court is about to eviscerate the SEC’s power to efficiently pursue fraudsters.
Or so we are told.
In SEC v. Jarkesy, the Court may hold that whenever the SEC seeks to impose monetary penalties on enforcement targets for securities fraud, it must proceed in federal court and not in its own administrative forum.
Law School Blogs
Davis Polk Discusses Rulings on Fed’s Denial of Master Accounts to Custodia and PayServices
Two federal district courts recently upheld decisions by the Federal Reserve Bank of Kansas City (FRBKC) and the Federal Reserve Bank of San Francisco (FRBSF) to deny master account applications from Custodia Bank (Custodia) and PayServices Bank (PayServices). Custodia has a Special Purpose Depository Institution (SPDI) charter from the State of Wyoming that allows it…
John C. Coffee, Jr. — “Shadow Trading” and the Common Law of White Collar Crime
A fascinating legal soap opera is now underway following a trial just completed in California. The issues are new, novel, and important in one sense, but old, familiar, and important in another. The case – SEC v. Panuwat[1] — is an SEC civil case that represented the first time the SEC has tested its…
Europe Needs a Business Law. What Would It Look Like?
Globalization, whatever its problems, has created international flows of goods and other items that in value far exceed the GDP of the largest states (or combinations of them like the EU). and so it may lay claim to its own transnational commercial and financial legal order. Whatever that business law may look like, in particular…
Sullivan & Cromwell Discusses Delaware Supreme Court Ruling on MFW’s Application to Controller Transactions
In the important 2014 case of Kahn v. M & F Worldwide Corp., the Delaware Supreme Court held that freeze-out mergers, in which a controlling stockholder takes a company private, are subject to Delaware’s heightened “entire fairness” standard of review unless subject, at the outset, to approval by both (i) an independent special committee, and…
How a New Regulatory Framework Could Contain Bank Runs and Promote Recovery
The rapid escalation in uninsured deposit runs in March 2023 led to chaotic intervention with potentially severe fiscal implications. The runs spotlighted once again the limit on prudential norms. Since the collapse of SVB, Credit Suisse, and other smaller banks that year, many reform proposals have focused on stronger ex-ante prudential measures, such as higher…
Davis Polk Discusses RECOUP Act’s Clawbacks of Failed-Bank Executives’ Compensation
In a recent opinion piece in the Washington Post, former FDIC Chair Sheila Bair and leading British bank historian Charles Goodhart argued in favor of the executive compensation clawback provision in the proposed RECOUP Act, which we analyzed here. The provision would grant the FDIC authority to recoup up to two years of compensation…
Q&A with Sonja Ebron, Member of IAALS’ Board of Advisors
Last year, IAALS welcomed six new members to our board of advisors. One of those new members is Sonja Ebron, who brings to IAALS an unparalleled dedication to access to justice with a unique perspective as a Ph.D. electrical engineer. As one of the driving forces behind Courtroom5, she has woven together her…
How to Regulate FinTech, Crypto Assets, DeFi, and Other Financial Innovations
In a new article, I attempt to build a systematic framework for regulating FinTech-driven innovations. In doing so, I clarify and simplify the confusing terminology that makes FinTech appear more complicated than it is.
“FinTech” refers to the use of technology to facilitate financial innovations. FinTech’s innovations can provide valuable and, some argue, revolutionary new…
Cleary Gottlieb Discusses Refusal of Delaware Bankruptcy Judge to Order Arbitration
In a memorandum opinion and order issued on March 27, 2024, in In re Yellow Corporation, et. al., Judge Craig T. Goldblatt denied motions filed by multiemployer pension funds to arbitrate debtors’ objections to pension withdrawal liability claims in the United States Bankruptcy Court for the District of Delaware. Judge Goldblatt’s decision notably departs from…