Lou Di Cerbo

S&P Global Ratings' Quarterly Banking Update is loaded with insights and snazzy charts. The two parts that really spoke to me were: 🔶 Slides 9-10 show continuing #NIM compression. Banks should be looking to #CRT as a way to grow higher rate lending capacity without having to recognize unrealized losses in their existing book. 🔶 Slide 22 shows the increase in lending to nonbank financials (e.g., fund finance, warehouse, private credit, indirect consumer). Banks that have not converted these asset classes to securitization structures should look into it as an easy way to optimize capital. https://lnkd.in/eMna4r-D

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#TheRightNotToRemainSilent Finished reading my copy of "The Right Not to Remain Silent: The Truth About Mental Health in the Legal Profession", which is co-edited by my friend Carole Dagher, Beth Beattie & Thomas G.W. Telfer. If you are a lawyer, law student, or someone considering a career in the profession, please consider obtaining a copy from LexisNexis (all proceeds to CAMH). While there is an honourable tradition among senior lawyers in assisting students and junior members of the Bar as they learn the practice of law, we have not done nearly enough to discuss the pervasive mental health problems and illnesses impacting so many lawyers and their loved ones, and how aspects of our profession's culture make the situation worse. This book is fundamentally about the power in each of us to change our profession, for the good of our colleagues, friends, families and ourselves. Thank you to the book's authors - now it's up to the rest of us.

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With the FTC effectively outlawing non-compete clauses across the US last month, what effect is this likely to have on corporate America? How will be balance be found between non-solicitation / no poaching clauses (still very much legitimate) and this decision to ban non-competes? I suspect as ever the boundaries will be set by the courts with creeping precedents, but will we ultimately end up where the FTC imagined when creating this final rule, or might it shoot off down an unexpected side road, with all the complications that could create? https://lnkd.in/d6gzSGGG

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The #CFTC just made a historic move by targeting Trafigura’s employment agreements that violated whistleblower protection rules. This $55 million settlement is a game-changer for whistleblower rights and clear communication with regulators. Read the full story here and follow us to stay up to date on the latest #whistleblower news! 👉  

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Broker-dealer friends: Check out our take on FINRA's recently issued cybersecurity case. As we say in the piece, it seems like the gloves are off. #finra #enforcement #brokerdealers

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On May 22, 2024, the Consumer Financial Protection Bureau issued a significant Interpretive Rule and Request for Comment finding that “Buy Now, Pay Later” credit access products are subject to certain requirements of Regulation Z under the Truth in Lending Act. 📖 Read more in this #GTAlert written by Shane Foster, Lisa Lanham, Rinaldo Martinez, and Langley Perry, Jr.: https://buff.ly/4c3kC2W. #CFPB #FinancialServices #BuyNowPayLater #CreditCards

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Insider Trading Practices 101: A 10b5-1 trading plan won't help an executive defend trades if the exec knew material non-public information when setting it up. And it does not help when you decline advice to include a "cooling off period." https://lnkd.in/dDz3t9cz

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CTA Tip of the Day #20 Today FinCEN released an updated FAQ with new items C.12, C.13, C.14 and D.17. New FAQs C.12-14 provide clarity on how to treat reporting companies dissolved in 2024. According to the FAQs, an entity dissolved in 2024 must still file an initial BOI report. This is true whether that entity was formed before January 1, 2024 or after. Even if an entity is formed in 2024 and dissolved within 90 days (meaning before the initial BOI report would be due) there is still an obligation to file an initial BOI report. FAQ C.14 also makes clear there is no requirement to file a BOI report indicating an entity has ceased to exist. That FAQ does not, however, clarify if you need to file a report indicating a change of beneficial owners which occurred as part of the dissolution process. For example, senior officers may resign or someone who owned 25% of the reporting company may cease to do so. With regard to FAQ D.17, it provides some guidance on who should be reported as beneficial owners when an entity is partially or fully owned by an Indian Tribe. A portion of this FAQ has broader application, however, since it speaks to what should be done when a reporting company is partially owned by an exempt entity (like an Indian Tribe). FAQ D.17 says, “A non-exempt entity partially owned by an Indian Tribe should report as beneficial owners all individuals exercising substantial control over it, including individuals who are exercising substantial control on behalf of an Indian Tribe or its governmental authority.” This concept should apply to any exempt entity that partially owns a reporting company, meaning employees of an exempt entity or others may need to be disclosed as beneficial owners because they exercise substantial control over a reporting company that is only partially owned by that exempt entity. For example, assume a publicly traded company forms a joint venture LLC with a partner that is not itself and exempt entity. In that case the publicly traded company would need to identify as beneficial owners of that LLC employees who are exercising substantial control over joint venture LLC. https://lnkd.in/g2d4sepD

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I'm at it again! Another Financial Poise webinar with these fabulous guys. We know our stuff. Today's Inside Counsel Insider:  Corporate & Regulatory Compliance - Internal Investigations-101 This is a fun one. I hope you were able to catch it live. If not, be sure to check out the recording. Jonathan Friedland MaxAsset #investigations #fintech #financialservices Mayer Brown lawesomeGC Jones Day Lewis Brisbois

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Courts have whittled away at the Chevron doctrine for years, and 2024 will likely bring the most severe blow, with a US Supreme Court decision expected to end or limit the practice, according to Matthew Schettenhelm, Litigation & Government Analyst. US business will see Federal regulators' powers confined, creating opportunities for companies in diverse industries from financials to health care which may operate in a transformed regulatory landscape. https://lnkd.in/egiZVRne #USsupremeCourt #Federalregulators #Regulation

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A federal judge granted Madison Square Garden Entertainment Corp.'s (MSGE) motion to dismiss in a case where the plaintiff accused MSG of using biometric data and facial recognition software to identify and remove attorneys in their arenas/facilities who had sued them, in violation of several New York data privacy statutes. Judge Lewis Kaplan of the Southern District of New York wrote that the "profit" plaintiffs allege from using biometric data to ban adverse attorneys from events and discourage them from filing cases was too attenuated from the plain text and reading of the statute, which says it is "unlawful to sell, lease, trade, share in exchange for anything of value or otherwise profit from the transaction of biometric identifier information." In the short opinion (attached), he closes by saying "As objectionable as defendant's use of biometric data may be, it does not--at least on the facts alleged--violate Section 12-1202(b)." So to my attorney friends prepping that lawsuit against MSG, maybe wait until after the playoffs before filing? That or find one of those Mission Impossible masks to wear to the game. #sportslaw #dataprivacy #biometric #facialrecognition

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It’s finally out! What am I talking about? Why, the insufficiently heralded American Bar Association Business Law Section Final Report on the Work of the Task Force on Securities Holding Infrastructure … https://lnkd.in/efU7EVyg ... of course! If my years in this business have taught me anything, it’s that differences in national approaches to securities entitlements remain stubbornly intractable, and poorly understood. Myths and urban legends persist, preventing (in my humble view) much-needed harmonisation. Mistrust certainly was not assuaged by the 2008 financial crisis: one of the less-appreciated consequences of the crisis was the damage done to efforts to improve cross-border legal certainty and predictability – especially in the context of conflict of laws, choice of forum for disputes, intermediary insolvency, tax and shareholder rights and entitlements. Problems that might at first seem abstract and theoretical have had real-world consequences. The impact continues as we consider the future: these issues and differences have – very forcefully – reemerged in the case cross-border investment in #digitalassets, for example. And so: the more that can be done to clarify, correct, explain, the better: I believe national differences are not as significant as many think, and disparate perceptions can be rationalised: indeed, for all practical purposes, they have been rationalised over past decades, because the market has had to find a way. However, more can be done to improve the post-trade ecosystem to facilitate cross-border capital flows and protect investor and issuer interests, especially as new technology offers opportunities to democratise investment across a much wider array of asset classes. It is for this reason that I welcomed the opportunity to contribute what I could in the preparation of the Report. To be clear, the U.S. indirect holding system is not perfect – no national system can make that claim – but perfection can’t be the enemy of the good, as the saying goes. And there clearly is room for reform. The legendary Charles W Mooney Jr and aptly named Sandra Rocks co-chaired the Task Force and the preparation of the Report: Part One is linked – it provides a detailed description of the U.S. intermediated (indirect) holding system for fungible bulks of publicly-held securities in the United States, which features holding through securities accounts with intermediaries (broker-dealers and custodian banks). The Report describes challenges associated with the U.S. system (including shareholder voting and enforcement problems), which derive largely from the lack of privity between beneficial owners of securities and securities issuers. Part Two – which is the next phase to be confronted by the Task Force - will consider plausible means of addressing these challenges. #posttrade #securities #securitiescustody

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The private funds industry (represented by several industry groups including the LOAN SYNDICATIONS AND TRADING ASSOCIATION INC) is going toe to toe with the U.S. Securities and Exchange Commission! These industry groups are challenging the new SEC "Private Funds Rule", finalized in August 2023, which will regulate private fund advisers by requiring them to, among other things, (i) provide investors quarterly statements (including information about fees, expenses and performance), (ii) obtain an annual audit for each fund it manages, and (iii) acquire a fairness opinion in connection with an adviser-led secondary transaction. The industry group brought suit in the Fifth Circuit shortly after the issuance of the rules. On February 5, a three-judge panel heard oral arguments on the suit. The parties requested that the Fifth Circuit issue their opinion by today, May 31st, so that industry participants would have time to comply with the rules and the ruling of the court. While the case has not yet been decided, a ruling should be coming any day now. In case you haven’t been following, this case is a BIG DEAL for the private funds industry and for #fundfinance. Here’s why: - The fate of the #fundfinance industry is bound up with the private funds industry. When funds are being formed, raising capital and making investments, that generates deal flow for banks and other #fundfinance providers. Any regulation that impacts the private funds industry will also impact #fundfinance. - As discussed by Holly Morgan Loftis and Richard Wheelahan in their helpful summary of the final rule (link in comments), the rule takes a light touch with respect to subscription credit facilities and other #fundfinance products. The rule expressly says that it “does not dictate or limit the ability of private funds to engage in excessive leverage or borrowing,” including the use of somewhat controversial NAV facilities. The only direct #fundfinance impact is that the quarterly investor statements must include performance metrics that are computed both with and without the impact of fund level subscription facilities. - While the rule takes a light touch on the use of #fundfinance products, my concern is the precedent that this rule, if approved, would present. If the rule is upheld, this case would acknowledge that the SEC has broad authority to regulate private funds, even though those funds are only available to “qualified purchasers” – i.e., wealthy and sophisticated investors. That outcome is worrisome given recent statements by the SEC expressing concern about the use of #fundfinance products (see link in comments). This rule, if approved, would create an opening in the future for SEC rules that directly regulate #fundfinance products. So if you work in the private funds or #fundfinance ecosystem, this pending ruling is a big deal! Keep an eye out – the decision should be coming any day now!

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