CompliancEX

Robert W. Cook Named Director of SEC Division of Trading and Markets

By U.S. Securities and Exchange Commission, November 10, 2009 

Securities and Exchange Commission Chairman Mary L. Schapiro announced today that Robert W. Cook has been named Director of the agency's Division of Trading and Markets.

Mr. Cook, 44, comes to the SEC from the law firm of Cleary Gottlieb Steen & Hamilton LLP, where he has been a partner in the firm's Washington D.C. office since 2001. At Cleary Gottlieb, which he joined in 1992, Mr. Cook has established himself as one of the nation's leading practitioners on broker-dealer and market regulation.

"Investors will benefit greatly from the knowledge, leadership and insight that Robert will bring to the agency," said Chairman Schapiro. "Robert has an incredible grasp of the issues confronting the Division and a deep understanding of securities markets."

Mr. Cook said, "I am honored that Chairman Schapiro has given me the opportunity to join the staff of the Commission at this important time for our country's financial markets and financial regulatory system. I look forward to the privilege of working with the Chairman, the Commissioners, and the talented and dedicated staff in the Division of Trading and Markets and throughout the agency to promote the interests of investors and facilitate fair, orderly and efficient markets."

The SEC's Division of Trading and Markets establishes and maintains standards for fair, orderly, and efficient markets. The Division regulates the major securities market participants, including broker-dealers, credit rating agencies, transfer agents, and self-regulatory organizations such as stock exchanges, the Financial Industry Regulatory Authority (FINRA) and clearing agencies.

While in private practice, Mr. Cook advised clients on a wide range of matters arising under the federal securities laws, SEC regulations, and self-regulatory organization rules. His extensive experience includes working on OTC derivatives transactions, new financial products and structures, and securities trading and compliance matters. His clients have included U.S. and foreign broker-dealers, banks, exchanges, electronic trading platforms, issuers, investment funds, investment advisers, and institutional investors. He also represented various financial industry trade associations and ad hoc coalitions on regulatory initiatives affecting the securities industry generally and on developing standardized documentation and procedures for common industry transactions. Mr. Cook also has been actively involved in financial market issues involving not only the Commission, but other federal regulatory agencies as well.

Mr. Cook graduated magna cum laude with an A.B. in Social Studies in 1988 from Harvard College, where he was elected to Phi Beta Kappa. He received his Master of Science with distinction in Industrial Relations and Personnel Management from the London School of Economics in 1989. Mr. Cook received his J.D. cum laude from Harvard Law School in 1992.

 

FDIC's Bair: Must Pre - Fund Financial Firm Unwinding

By Karey Wutkowski in Washington and Clare Baldwin in New York (Reuters) for The New York Times, November 10, 2009

A reserve fund must be established ahead of time to give the government the working capital it needs to dismantle large, troubled financial companies, a top U.S. bank regulator said on Tuesday.

Sheila Bair, chairman of the Federal Deposit Insurance Corp, said she opposes the proposal by the Obama administration and a leading senator to collect fees from financial companies after another firm is seized and dismantled.

"This would not be a bail-out fund. This would not be an insurance fund," Bair said in prepared remarks to the Institute of International Bankers. "It would provide short-term liquidity to maintain essential operations of the institution as it is broken up and sold off."

Senate Banking Committee Chairman Christopher Dodd earlier on Tuesday released draft legislation that calls for any government expenses to be recouped after a financial company fails and is liquidated. The FDIC would be in charge of dismantling the company.

Treasury Secretary Timothy Geithner has been adamant that creating a standing fund would enhance moral hazard and be viewed by the financial industry as an insurance fund that would insulate it from risky bets.

Bair, however, has been successful in convincing Representative Barney Frank to reverse his opinion on the topic. He recently said he now supports pre-funding the so-called resolution authority.

The resolution authority is just one piece of sweeping legislation moving through Congress to overhaul financial regulation. Other pieces include creating a new consumer agency to police financial products, consolidating bank regulators and creating a new council to oversee risks to the financial system.

The House has made considerably more progress through public bill-writing sessions and hopes to have a full House vote by early December.

The Senate Banking Committee will start drafting formal language and consider amendments in early December, Dodd said on Tuesday. He did not estimate when the full Senate might vote.

Bair said during her remarks on Tuesday that Frank, chairman of the House Financial Services Committee, is going to take other measures to strengthen his version of financial reform.

She said he will eliminate the government's ability to assist open but troubled financial companies, will ban the government from investing capital in those institutions, and will create a higher standard for the FDIC and Federal Reserve to provide support to healthy companies in the event of a systemic meltdown.

"We've had too many years of unfettered risk-taking, and too many years of government-subsidized risk," Bair said. "It's time we closed the book on the doctrine of too big to fail."

Bair also said regulators can restrain risk in the system by ensuring that large financial companies hold high amounts of capital. She said recent improvements in market conditions cannot deter the effort to follow through on tough new capital standards.

"There is little doubt that there will be eye-popping reductions in required capital when the good times return to banking," she said.

 

Dutch regulator fines GMAC unit over lending rules

By Ben Berkowitz for Reuters, November 11, 2009

Dutch market regulator AFM has fined GMAC Nederland NV, the local unit of bailed-out U.S. auto and home lender GMAC Financial Services, for not meeting rules on tighter standards for consumer credit and lending.

The AFM said in a statement on Wednesday that GMAC Nederland, in the period from July 1, 2008, to Feb. 26 this year, did not sufficiently focus on preventing excessive indebtedness when reviewing applications for credit.

Such "overkreditering", as it is known in Dutch, has led to fines against other local financial institutions since this summer. Like the GMAC fine of 24,000 euros, they were also relatively small.

New, tighter rules came into effect last year and the AFM said GMAC Nederland did not align its lending criteria with the new rules in time.

The fine can be appealed against. A spokeswoman for GMAC Nederland was not immediately available to comment.

Money-losing GMAC has already received $12.5 billion in bailouts from the U.S. government and is in line for more. [ID:n05147890]

GMAC's owners include auto maker General Motors [GM.UL] and private equity firm Cerberus Capital. [CBS.UL]