SEC votes to propose stricter broker standards
The SEC is planning to place tighter restraints on stockbrokers, to ensure they act in the best interest of their clients. Under the proposals, passed on a 4-1 vote, brokers would be required to disclose conflicts of interest to clients such as bonuses they get for selling certain products or fees they earn for steering investors toward certain mutual funds or insurance products. Certain incentives such as sales contests, or prizes brokers get for selling certain investments, would probably be untenable under the rule.
Bloomberg Wall Street Journal
NYU defends retirement plans
New York University has become the first of 18 US colleges to defend its retirement plans at trial. More than 20,000 current and former NYU employees accuse NYU of violating federal benefits law by paying high fees to its retirement plan record keepers. NYU also offered certain actively managed investment funds that carried high fees despite having no realistic expectation of higher returns, the employees add. Jerome Schlichter, attorney for the NYU workers and senior partner with Schlichter Bogard & Denton, said he was looking forward to showing in court how NYU hurt its workers’ ability to save for retirement.
Big Law Business
Hellman & Friedman to acquire Financial Engines
Wachtell Lipton Rosen & Katz and Simpson Thacher & Bartlett LLP are to advise Hellman & Friedman on its acquisition of Financial Engines for about $3.02bn and the private equity group’s plans to merge the financial advisory firm with Edelman Financial Services. Under the terms of the agreement, funds affiliated with Hellman & Friedman LLC will acquire Financial Engines Inc. in an all-cash transaction worth $45 per share.
Law 360 WealthManagement.com
Bennett Jones to merge with boutique firm
Bennett Jones is to acquire 12 lawyers from corporate and securities boutique McCullough O’Connor Irwin. The merger is a part of the Calgary-based firm’s efforts to expand its private equity and establishment funds offerings. McCullough O’Connor Irwin has represented clients across various industries in public and private equity deals, debt financings, corporate restructuring and governance issues and securities regulatory and compliance matters, among others.
The American Lawyer Canadian Lawyer Magazine
PE lawyers join Goodwin Procter
Scott Joachim and David Johanson have both joined Goodwin Procter‘s private equity and technology companies practices. Mr Joachim and Mr Johanson join from Fenwick & West, where Joachim served as the founder and chair of the firm’s private equity practice. Mr Johanson represents a number of private equity sponsors, including buyout funds, growth equity funds, venture capital funds and hedge funds. A.J. Weidhaas, co-chair of Goodwin Procter’s private equity practice, said: “Their practices align perfectly with our highly collaborative private equity and technology practices, which are attracting top talent as we continue to see robust client demand.”
GDPR considerations for US asset managers
Ahead of the introduction of the EU’s General Data Protection Regulation, Katten Muchin Rosenman LLP lists a number of considerations for US asset managers. All US asset managers providing/offering asset management services to EU/EEA-based investors/managed account clients, or who otherwise have EU/EEA-based persons on their mailing lists, need to ensure they are compliant by May 25.
Britons invited to file US whistleblower cases
The Daily Telegraph highlights the first case of a Briton being awarded a payout under US whistleblower laws. Andrew Patrick was awarded 18% of a £651,000 ($908,100) settlement after he exposed how a British luxury mail order company flouted American customs laws. Mary Inman, Mr Patrick's lawyer, says more cases are on the way. She has just opened a London office of US firm Constantine Cannon, and says: "I have been approached by close to 30 whistleblowers here in just 10 months. Of those, we have filed five cases that are going to the US to be filed."
The Daily Telegraph
Google under fire over tactics for EU data regulation
Google’s attempts to shield itself from the potential negative impact of GDPR by classing itself as a “controller” has drawn fire from online publishers, who claim the move breaks the spirit of the new law.
Private equity funds active in market reach all-time high
Private equity is hitting all-time highs, according to the Boston Consulting Group, which says, as of January 2018, 2,296 private equity funds were active in the market.
Regulators failed in Staley test case, critics say
The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) will fine Barclays CEO Jes Staley over his attempts to uncover the identity of a whistleblower who raised concerns about the appointment of a senior employee. The fine, yet to be determined, will be added to the clawback of Staley’s £1.3m bonus for 2016, with the total not expected to exceed £2m. The regulators found Mr Staley's actions represented a breach of individual conduct rules that relates to a "requirement to act with due skill, care and, diligence", the bank said, but cleared him of a higher rule one offence relating to lack of integrity. The regulators have been accused of being too soft by not banning Staley or sanctioning the bank itself, after it moved to tighten up its whistleblowing processes. Mary Inman, a lawyer at Constantine Cannon, described the punishment as “weak” considering Staley had flouted two of the key stop-guard measures contained within the Senior Managers and Certification Regime. Meanwhile, the EU is set to boost legal protection for corporate whistleblowers with plans to shield workers from being fired or demoted for disclosing information in the public interest. Separately, TSB could be hit with multimillion-pound fines on top of an unprecedented number of compensation claims - including from customers of other banks - after pledging “no one will be left out of pocket” as a result of its IT disaster. The Financial Conduct Authority, which can levy unlimited fines, and the Information Commissioner's Office are monitoring the situation.
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SFO faces uncertain future
The Times examines the appointment of former FBI lawyer Lisa Osofsky as the next director of the UK’ s Serious Fraud Office. It notes that Ms Osofsky has backed controversial plans to bring the office under the wing of the national crime agency. She has also appeared to criticise the organisation's policy of targeting big-name prosecutions. She said: “A classic SFO prosecution is about individual scalps and even big brand names such as Rolls and Tesco, but the scale of money laundering is much bigger but largely unknown.” Separately the legal team for convicted Libor rigger Tom Hayes has accused the SFO of a series of disclosure failings they say led to a miscarriage of justice and his wrongful conviction. Mr Hayes's lawyer Karen Todner has written to the Justice Committee urging it to probe the organisation.
The Times City AM
IMF to target financial corruption as part of health check
The IMF is to ask member countries to open up their legal and institutional frameworks for assessment by the fund to see whether they have effective mechanisms to prevent bribery and money laundering. Penny Mordaunt, the international development secretary, commented: "The UK is working with international partners to end impunity for those engaged in corruption, to recover assets stolen from developing countries and to empower citizens to stand up to and report corruption." Meanwhile, reports to Switzerland's money-laundering watchdog hit record levels last year. The Money Laundering Reporting Office Switzerland said it handled nearly 4,700 cases of suspicious activity worth more than 16.4bn francs in all, once again led by suspected bribery.
The Guardian Reuters
Firms to face surprise data raids
The UK’s Information Commissioner is to be given powers to carry out unannounced raids on companies suspected of involvement in illegally harvesting personal information. Ministers have drawn up legislation to allow “no notice” inspections without a warrant, in response to the Facebook data scandal. Organisations will be forced to hand over specific information within 24 hours of a request from the watchdog, with the prospect of criminal convictions for those who fail to comply.
The Daily Telegraph
Cyber resilience for asset management
The Investment Association has partnered with KPMG to produce a report into cyber resilience for asset management. The trade body for asset managers will bring together law enforcement experts and government agencies to launch the joint report, titled "Building Cyber Resilience in Asset Management", which will outline the practical steps organisations can take to build a cyber resilient business. The report calls for increased collaboration across the industry and for investment in developing mechanisms that will allow firms to detect, respond and recover from potential attacks at speed.
City AM London Loves Business
PPI guidance could cost consumers billions
Barristers have claimed that if banks follow Financial Conduct Authority (FCA) guidance on Payment Protection Insurance (PPI) payouts, consumers could find themselves underpaid by billions of pounds. is ignoring legal cases which mean consumers may be owed around £14bn more than under its own guidelines, the barristers have alleged. “Consumers could be forgiven for asking whose side the FCA is on. These figures reveal that the UK public are being misled by the banks, with potential compensation on average four times the amount suggested by the body supposedly looking after consumers," St John's Buildings' Elis Gomer said.
Wealth manager considers legal action against FCA
Alan Miller, founder of SCM Direct, is considering bringing a legal case against the Financial Conduct Authority to force it to take action on fund manager charges to investors. Mr Miller, founder of the wealth manager, has said he is so disappointed with the regulator’s latest remedies to the issue of fund fees and charges that he is looking into bringing a judicial review against the FCA.
Daily Mail FT Adviser
EU plans to cut funding to nations where rule of law is at risk
Brussels will this week propose new powers to cut off funding to countries where it considers judicial independence is under threat.
PE investing in Latin American infrastructure
Financier Worldwide conducts a Q&A with André Luiz Freire at Demarest Advogados and Vera De Brito de Gyarfas at King & Spalding on the outlook for Latin America infrastructure. Ms de Gyarfas explains that the role of private equity funds is becoming more relevant and they are actively investing in infrastructure projects. She notes that PE deals in infrastructure-related sectors accounted for almost half of total regional investment in 2016, with more than $3.7bn invested in energy, telecoms, transportation and logistics infrastructure.
Thailand adopts changes to wealth management practices
Lawyers from Baker McKenzie detail recent legal and regulatory changes in Thailand that have impact from a wealth management perspective. Amongst the changes is an extension to the deadline for the tax-free swap of business assets until 31 December 2018. Another significant change is the relaxation of exchange control requirements for qualified investors’ investment in overseas portfolios and derivatives. Separately, lawyers from Hadiputranto Hadinoto & Partners examine several legal and regulatory changes in Indonesia that have impact on wealth management.
Probe exposes Australian banks’ abuse of customers
The FT reports on Australian regulators' targeting of a culture of rule-breaking at the country's biggest banks, with cases focusing on allegations of facilitating money laundering among other issues.
AMP manager resigns over lying allegations
Craig Meller, head of Australia's largest wealth manager AMP, has resigned after a public inquiry heard that the firm charged clients for services not received and lied 20 times to the Australian Securities and Investments Commission.
The ‘International Finance Centre’ award has been given to the Dubai International Finance Centre at the WealthBriefing European Awards 2018. The Centre has continued to expand and improve its wealth management platform with two new laws enacted in March: the Trust Law, which provides an appropriate environment for the operation of trusts in DIFC, and the Foundations Law, a new regime to provide greater certainty and flexibility for private wealth management and charitable institutions in line with international best practice.
Zawya Exchange News Direct
Norton Rose Fulbright appoint PE specialist
Patrick Colegrave has been named director of Norton Rose Fulbright’s Johannesburg office. Mr Colegrave has experience advising clients in Africa on inbound investments through a variety of investment structures and vehicles ranging from private equity to permanent capital vehicles to more liquid open-ended hedge fund arrangements.
Big Law Business
Dealmaking hits highest level in 18 years
M&A activity with UK involvement rose to $274.9bn (£196.4bn) in the first quarter, its highest since the year 2000, figures from Thomson Reuters reveal. Total activity hit an 18-year high helped by the big-ticket tie-ups between GlaxoSmithKline and Novartis, GKN and Melrose, and UBM and Informa. Alan Bainbridge, a partner at Norton Rose Fulbright, said cheap finance and an abundance of private equity dry powder was driving dealmaking.