Occupy the SEC is a group of concerned citizens, activists, and financial professionals with decades of collective experience working at many of the largest financial firms in the industry. This is our roundup of juicy press about Wall Street and financial regulation, for this week.
In spite of his earlier statements of concern over the novelty of using the Financial Institutions Reform Recovery Enforcement Act (FIRREA) to pursue claims of fraud against banks for securitization, Judge Rakoff gave prosecutors the green light on Wednesday to use the tactic in a fraud suit against Bank of America. Max Stendahl at Law360 (sub req’d), May 9, 2013.
California AG Kamala Harris has filed suit against JPMorgan for a comprehensive list of shady credit practices, doing the work that federal regulators should be doing but aren’t. Yves Smith at Naked Capitalism, May 10, 2013.
And the revolving door keeps spinning – this week, the SEC announced that Bruce Karpati, the head of the enforcement division’s asset management unit, is moving to Prudential. He is far from alone – both Goldman Sachs and Morgan Stanley have recently hired well-connected DC staffers to run corporate communications. Ben White at Politico, May 8, 2013.
The SEC has reportedly circulated its proposed rules for money market funds internally, and while there are no confirmed details, reports to date have confirmed last week’s rumors that the rules will fall far short of what we think is necessary. Sarah Lynch at Reuters, May 7, 2013. For a sense of what’s at stake, check out this article by Rex Nutting at MarketWatch, March 29, 2013.
The House Financial Services Committee put forward the nine “agricultural” bills designed to neuter key provisions of Title VII of Dodd-Frank, bringing them a necessary step closer to a vote. Despite a widely publicized letter from Treasury Secretary Lew calling on Democrats to push back against the bills, most Dems on the committee voted with Republicans. Silla Brush at Bloomberg, May 7, 2013.
The horror show of the foreclosure settlement continues, with outsourced vendor Rust Consulting not only bouncing checks to recipients (who by definition are already coping with error-prone foreclosure) but now sending checks in the wrong amount, to the wrong address, etc. And apparently with no accountability. Ben Protess and Jessica Silver-Greenberg at Dealbook, May 8, 2013, and Yves Smith at Naked Capitalism, May 9, 2013.