29 November 2012
The NYT Dealbook’s overview of the SAC / Martoma insider dealing case explains controlled-liability theory:
“…the S.E.C.’s warning is the boldest regulatory shot yet across SAC’s bow. The commission filed a parallel civil suit last week alongside the Justice Department’s criminal charges that named Mr. Martoma and CR Intrinsic, the SAC unit that employed Mr. Martoma, as defendants.
A person briefed on the investigation said that an additional action against SAC, or even Mr. Cohen, could involve accusations of fraud based on the so-called controlled-liability theory, meaning that it was in “control” of Mr. Martoma when he engaged in insider trading.”
See also: Expert network firms
Posted in Equity capital markets, Financial services and market conduct, Regulators, United States |
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29 November 2012
The Business Secretary yesterday announced the new Green Investment Bank “open for business”, with the making of GIB’s first two investments. From the BIS press release – the notes to which contain useful information about the GIB, its status, role, funding and state aid provision:
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Posted in Regulators |
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29 November 2012
David Currie, the chair designate of the to-be-created Competition and Markets Authority, set out his “vision” for the new authority in a speech on 28 November 2012. The CMA will bring together the Office of Fair Trading and the Competition Commission and is expected to assume its new powers in April 2014; the legal framework for the CMA is being created by the Enterprise and Regulatory Reform Bill, currently going through the House of Lords.
From the BIS press release:
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Posted in UK government |
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29 November 2012
HM Crown Prosecution Service Inspectorate published its report on the SFO on 20 November 2012. The report can be read here; the accompanying press release is here. From the press release:
“The inspection found significant process failures and other weaknesses, which the agency needs to address to improve performance. The Inspectorate also identifies strengths, for example in analysis and presentation of evidence.
The report makes eight recommendations, all of which the new SFO Director, David Green QC, has accepted. Changes instigated in the past few months have begun to address the issues of concern.”
These posts capture some of the reasons why the SFO was inspected.
Posted in Risk management, UK government |
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28 November 2012
The Government published its response on 13 November 2012 to the European Commission’s proposed Regulation for a Common European Sales Law. From the response:
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Posted in Europe, UK government |
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28 November 2012
The European Private Equity and Venture Capital Association launched its “Handbook of Professional Standards” on 15 November 2012. A press release is here and the Handbook can be accessed here.
read more »
Posted in Corporate governance, Europe, Lobby groups, Private equity, Reporting and accounts |
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28 November 2012
The Code Committee of the Takeover Panel published on 26 November 2012 its review of the 2011 amendments to the Takeover Code. (We covered those amendments in this post.) The review concludes that:
“The Code Committee believes that, to date, the 2011 Amendments have operated satisfactorily…the Code Committee has asked the Executive to continue to monitor certain areas of practice and to keep a number of the provisions of the Code under review. However, the Code Committee does not intend to propose any immediate changes to the Code as a result of its review of the 2011 Amendments and any future proposals will be brought forward in accordance with the Code Committee’s usual procedures for amending the Code.”
See also: Takeover Code: impact of the reforms, one year on – Clifford Chance analysis
Posted in Takeovers |
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28 November 2012
The Government published on 22 November 2012 its response to the The Kay Rcview of UK Equity Markets and Long-term Decision Making. The Kay Review – which we discussed in this post – made 17 specific recommendations aimed at, in the Government’s words, “reversing the culture of short-termism and restoring relationships of trust and confidence in the investment chain”; the Government response sets out its (overwhelmingly supportive in principle, if not in detail) stance on each of those recommendations
The BIS press release is here and the Government response document is here. From the press release:
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Directors, Equity capital markets, Regulators, UK government |
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26 November 2012
UBS sound pretty clueless by this account from the FSA (our emphasis added):
“The Financial Services Authority (FSA) has fined UBS AG (UBS) £29.7 million (discounted from £42.4 million for early settlement) for systems and controls failings that allowed an employee to cause substantial losses totalling US$2.3 billion as a result of unauthorised trading. The trader, Kweku Adoboli, has been convicted of two counts of fraud by abuse of position and sentenced to seven years’ imprisonment. The systems and controls failings revealed serious weaknesses in the firm’s procedures, management systems and internal controls.
On 14 September 2011 UBS became aware that unauthorised trading had been carried out between 1 June 2011 and 14 September 2011 (the Relevant Period) on the Exchange Traded Funds Desk (the Desk) in the Global Synthetic Equities (GSE) trading division conducted from the London Branch of UBS.
The losses were incurred primarily on exchange traded index future positions. The underlying positions were disguised by the use of late bookings of real trades, booking fictitious trades to internal accounts and the use of fictitious deferred settlement trades.
During the Relevant Period, there was insufficient focus on the key risks associated with unauthorised trading within the GSE business conducted from the London Branch. The significant control breakdowns allowed the trading to remain undetected for an extended period of time.
read more »
Posted in Financial services and market conduct, Regulators |
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26 November 2012
The Foresight Horizon Scanning Centre “helps Government to think systematically about the future by considering longer term issues across the entire public policy spectrum”. On 23 November 2012 the Centre published a refreshed Technology and Innovation Futures report, “identifying over 50 new and developing technologies which could generate billions for the economy in the future”. The report is here (also contains link to original 2012 report).
From the BIS press release:
“Government Chief Science Adviser Sir John Beddington, who led the research, said:
“It is more important than ever to invest in long-term opportunities for growth and this report provides insight into where that investment could have most impact. The Government’s core role, facilitating collaboration between industry and researchers, will be crucial to seizing opportunities for the future of the UK’s economic prosperity.”
Technologies and trends identified in the report include:
read more »
Posted in UK government |
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23 November 2012
A fascinating interview with Elon Mush in TechCrunch:
“What about the education system – can you teach people to be creative?
read more »
Posted in Scrapbook |
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23 November 2012
Chris Dixon, Shoehorning startups into the VC model
“A startup should raise venture capital (or “venture-style” angel/seed funding) only if: 1) the goal is to build a billion-dollar (valuation) company, and 2) raising millions of dollars is absolutely necessary or will significantly accelerate growth.
There are lots of tech companies that are very successful but don’t fit the VC model. If they don’t raise VC, the founders can make money, create jobs, and work on something they love. If they raise VC, a wide range of outcomes that would otherwise be good become bad.”
The comments are also worth reading.
Posted in Private equity |
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23 November 2012
The College of Law has been granted full University status and will now call itself “The University of Law”. Announcement here.
The College is a for-profit body owned by Montagu Private Equity.
See also: College of Law bought by owner of waste management firm
What are law schools for?
“The country had exceptional law schools that were taught by practitioners, rather than pure academics”
Posted in Lawyers, Private equity |
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16 November 2012
Website here. Excerpt:
“The Seed Enterprise Investment Scheme, also known as SEIS, aims to encourage investment in small and early stage companies by reducing the risk to investors of investing in these types of companies. The Government introduced the SEIS as a way to promote new enterprise and boost economic growth in the UK.
The objective of this site is to provide investors and entrepreneurs with information about the SEIS and other forms of investment. You can learn about how the SEIS works, who qualifies to make SEIS investments and which companies can access SEIS money.”
More on the SEIS here.
Posted in Lobby groups, Private equity, Tax |
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15 November 2012
Jessica Mang and Christina Weckwerth were, unknown to each other, the girlfriends of Thomas Ammann. Today they were found not guilty of insider dealing. Mr Ammann was found guilty of two counts of insider dealing and two counts of encouraging insider dealing. The tone of the FSA’s press release suggests disappointment at the acquittal of the girfriends:
read more »
Posted in Financial services and market conduct, Regulators |
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15 November 2012
Paragraphs 9 to 13 of this Judgment on Costs (via FT Alphaville) pull no punches as to the High Court’s view of the conduct of the former director of the Serious Fraud Office in the Tchenguiz case.
For more on the SFO’s humiliation, see here.
Posted in Risk management, UK government |
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14 November 2012
Anthony Hilton in the Evening Standard on why allowing companies to offset debt interest against tax should be stopped.
Posted in Private equity, Tax |
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14 November 2012
The European Commission has today published a draft directive on “improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures”. The headline proposal is the setting of an objective for a 40% presence of women among non-executive directors of companies listed on EU regulated markets, to be met by 2020.
This is a target, not a mandatory quota. The directive does encourage an element of positive discrimination in favour of appointing women if all other criteria for the position are met equally by candidates; see the extract from the directive below.
The Commission’s press release is here. The Justice Commission’s press release is here. A set of Q&As on the proposed directive is here. The draft directive is here.
From the draft directive:
read more »
Posted in Corporate governance, Directors, Equity capital markets, Europe |
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14 November 2012
The Financial Services Authority has today published the first of two consultation papers on transposing the requirements of the Alternative Investment Fund Managers Directive into UK law. The FSA’s press release is here and the CP is here.
From the press release:
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Posted in Europe, Financial services and market conduct, Private equity, Regulators |
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13 November 2012
A great panorama of London – zoom in and out using the buttons at the base of the page.
Posted in Scrapbook |
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13 November 2012
A fascinating New Yorker article on Stanford University, from its foundation in the 1890s at the end of the gold rush, through its rise as a technological and engineering powerhouse, through to its present position as the “intellectual nexus” of the Valley and its ambiguous position as an academic institution many of whose staff and students ask of an endeavour, “what’s in it for me”:
read more »
Posted in Scrapbook, United States |
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13 November 2012
“Into the Silence” reviewed by Geoff Dyer:
“Three British expeditions set out for Everest between 1921 and 1924, involving a total of 23 climbers, all but six of whom had seen action in the war, either as combatants or medics. Charles Bruce, for example, survived Gallipoli in spite of being “cut down with machine-gun fire that nearly severed both of his legs”. Advised by the medical board “to retire to a quiet life and to be especially careful never to walk strenuously uphill”, he went on to lead the second and third Everest expeditions.”
See also: Geoff Dyer on work
Posted in Scrapbook |
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12 November 2012
A press release here from NYSE Euronext dated 30 October 2012 on its plans for a new SME market, offering both EU regulated and exchange-regulated markets, and a discussion of the plans in the Financial Times here.
See also: NYSE Euronext launches website dedicated to Europe’s “regulatory revolution in financial services”
Posted in Equity capital markets, Europe |
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9 November 2012
Reuters Breakingviews reckons that there isn’t much point to M&A lawyers:
“U.S. deal lawyers are not as valuable as they may think. Financial markets are largely indifferent to the legal terms of agreed public company mergers, new research shows. That may be because most transactions close regardless of the fine print. M&A attorneys have their uses, but agonizing over detailed wording isn’t the best way to serve clients.”
Although this poorly-argued piece does drag itself to concluding that “lawyers, of course, play useful roles in structuring deals, clearing regulatory hurdles and guiding clients through transactional risks”.
Posted in Lawyers, M+A, United States |
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7 November 2012
In July 2012 the Code Committee started three consultations on possible changes to the Takeover Code, as we reported here.
The Takeovers Joint Working Party of the City of London Law Society Company Law Sub-Committee and the Law Society of England and Wales’ Standing Committee on Company Law have published their responses to these consultations:
1. Profit forecasts, quantified financial benefits statements, material changes in information and other changes to the Code, PCP2012/1 – response here.
2. Pension scheme trustee issues, PCP 2012/2 – response here.
3. Companies subject to the Takeover Code, PCP 2012/3 – response here.
Posted in Lawyers, Takeovers |
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6 November 2012
The House of Commons Library has published a note giving an overview of the European Commission’s proposals for a European banking union, which can be downloaded here.
Posted in Europe |
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6 November 2012
The Financial Reporting Council has published a collection of essays by various worthies to make the 2oth anniversary of the UK Corporate Governance Code – which made its first appearance as the “Cadbury Code” in 1992. The essays can be read here.
Posted in Corporate governance |
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6 November 2012
The EU short selling regime came into force on 1 November 2012, as we discussed in this post.
The Financial Services Authority has now published the first list of short positions disclosed to it under the new regime. The list can be downloaded here (box at bottom right of page).
The largest short position is Greenlight Capital’s 4.37% short in Daily Mail & General Trust plc.
For the FSA’s factsheet on the Short Selling Regulation, see here.
See also: David Einhorn and Greenlight Capital fined £7.2m for market abuse; adamant they did nothing wrong
Posted in Financial services and market conduct, Regulators |
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2 November 2012
The review by Lord Heseltine, “No stone left unturned in pursuit of growth”, contains amongst its 89 recommendations the suggestion that the UK Government should make use of its powers under the Enterprise Act 2002 to intervene in mergers raising “public interest considerations”. The Heseltine Review is here (pdf) and the accompanying BIS press release is here. From the Review:
read more »
Posted in M+A, Takeovers, UK government |
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2 November 2012
On 1 November 2012 the Financial Services Authority issued a Policy Statement ”summarising the responses to our consultation on the proposed changes to the Handbook we need to make to comply with the EU Short Selling Regulation (SSR) from 1 November 2012, as well as our policies regarding the exercise of the discretions the SSR gives us”, and also published the changes to the FSA Handbook necessary to give effect to the SSR.
The Policy Statement and Handbook changes can be read here. A useful full note on the SSR by White & Case is here (pdf).
See also: The new short selling regime that will apply from 1 November 2012
ESMA publishes Q&As on the new short selling regime
Posted in Europe, Financial services and market conduct, Regulators |
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2 November 2012
ICAP announced on 31 October 2012 the launch of its ”ICAP Securities & Derivatives Exchange” (ISDX). This new listings venue for small and medium-sized companies is a rebranding of the PLUS Stock Exchange, which ICAP bought for a nominal amount in June 2012 (as we reported here).
ICAP’s press release is here and the new ISDX website is here.
As with the old PLUS Stock Exchange, ISDX will operate two markets:
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Posted in Equity capital markets |
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