“There is still ‘great risk of going back even on the commitments that have been made final,’ said Marcus Stanley, policy director at Americans for Financial Reform… ‘In no way is he just a caretaker for a job that’s just been completed by somebody else,” Stanley, referring to Massad, said in an interview. ‘To make derivatives reform a reality means taking on some powerful interests and pushing forward against significant opposition and we hope he’s up to it.’”
“The Office of the Comptroller of the Currency, criticized for missing some high-profile problems such as JPMorgan Chase & Co.’s London Whale losses, will institute a five-year rotation schedule for in-bank examiners, the agency said today in response to a review of its practices by non-U.S. regulators. The regulator also said transfers to the risk-analysis group would reduce the number of on-site examiners.”
“One scam is to fire employees of the private equity firm and rehire them immediately as ‘consultants.’ The investors are responsible for consultants’ salaries, where private equity employees are paid out of their own pockets. Another is taking what most private equity investors believe to be part of management fees, things like legal and compliance costs, and billing their investors for them without the investors properly knowing it. A third is private equity firms lying about the valuation methods they use to tell investors about the returns they make each year. All of these are ways for private equity firms to take money from their investors for themselves.”
“It’s absurd to suggest that DOL should step aside to wait and see” if the SEC acts, said Barbara Roper of the CFA. Lisa Donner, executive director of Americans for Financial Reform, added that Congress’ repeated requests for collaboration between the two regulators on their rules “feels like it’s a tactic, and is not grounded in either regulatory or statutory sense.”
“One investment adviser is sick and tired of the financial industry’s threat that mom-and-pop investors will suffer if investment-advice standards are raised,” writes Mark Schoeff of Investment News. At a media briefing in Washington hosted by the Consumer Federation of America, AARP, the AFL-CIO and Americans for Financial Reform, “Sheryl Garrett, founder of the Garrett Planning Network Inc., said that investors with low net worth can be served in a market where all financial advisers must act in their best interests.”
“’You could potentially use this to unravel big chunks of Dodd-Frank,’ said Marcus Stanley, policy director for Americans for Financial Reform, a coalition that includes the AFL-CIO labor union. The CFTC should institute a default presumption that affiliates are guaranteed by their parent company unless a bank can prove otherwise, he said.”
