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The SEC's Wells Process Turns 40
In September 1972, the U.S. Securities and Exchange Commission formally adopted its “Wells process” as a result of recommendations arising out of a report authored by three distinguished private practitioners. The committee chair, John A. Wells, submitted the report to then-SEC Chairman...
ArticlesWhistle-Blower Bounties May Encourage Residential Mortgage-Backed Securities Fraud Reporting
The False Claims Act, 31 U.S.C. § 3729, which has been around since the Civil War, permits whistle-blowers with information about fraud perpetrated upon the U.S. government to bring civil fraud suits on behalf of the United States and share in the recovery. While much attention is paid to the...
ArticlesThe Risk of Vicarious Liability for Broker Misconduct
One offshoot of the mortgage crisis that began in 2008 has been the rise in lawsuits by borrowers challenging both mortgage brokers and mortgage lenders for alleged misconduct in the origination or refinancing of home loans. In many cases, these lawsuits are based on distinct theories of liability...
ArticlesCrowdfunding Offers Attractive Financing Alternative, But SEC Must Give More Clarity
Due to the financial crisis and prolonged economic downturn, the credit market has contracted considerably. In this cautious investment climate, a start-up company’s ability to secure seed financing from venture-capital firms and angel investors that have scaled back lending to many yet-unproven,...
ArticlesWhy Fair and Responsible Banking Risk Assessments are Important for Non-Mortgage Business Lines
Fair and responsible banking risk assessments – by which financial institutions identify, measure, control, and monitor their lending and, more recently, servicing activities to prevent discriminatory, unfair, deceptive, abusive, and predatory acts and practices – have long been part of the...
ArticlesUnderstanding FIRREA's Reach: When Does Fraud "Affect" a Financial Institution?
Recently, the Justice Department has made increasing - and increasingly aggressive - use of FIRREA, a civil penalty statute that it had all but ignored for more than two decades. Enacted in response to the S&L crisis, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)...
ArticlesWhite Paper: Disparate Impact Under FHA and ECOA: A Theory Without a Statutory Basis
ABA in a letter yesterday urged federal government agencies to stop using a “disparate impact” approach to fair lending supervision and enforcement. The letter included an ABA-commissioned legal analysis by the Buckley Sandler law firm that concluded such an approach -- which holds lenders liable...
ArticlesSeven Steps Companies Can Take to Incentivize Internal Reporting of FCPA Violations
At present, the SEC's Whistleblower Office is receiving about eight whistleblower tips per day, and that number is likely to increase after the first whistleblower is paid. That award is expected shortly. If companies take steps now to enhance their internal reporting policies and procedures, they...
ArticlesMinimizing Missteps When Interfacing with SEC Staff
There is no doubt that all defense counsel strive to provide zealous and competent representation for their clients particularly when faced with a U.S. Securities and Exchange Commission enforcement proceeding. They know the consequences of such matters can be detrimental. What counsel might not...
ArticlesThe Paper Chase: Effects of FDIC Document Retention Policies on D&O Suits
As the Federal Deposit Insurance Corporation continues to pursue professional liability suits against directors and officers of failed banks, the agency's recent regulatory guidance addressing the removal or copying of internal bank documents for both failed and troubled banks has further tilted...
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