The SOPA/PIPA uprising appears to have doomed those bills, but the United States Congress is not the only entity considering new restrictions on the web. Trade agreements are emerging as the new legal device for combatting unlicensed use of intellectual property online – avoiding the legislative process, and potentially impacting the openness of the Internet in ways that are inciting outrage in the online community. Two such agreements are positioned to have considerable effects on the global enforcement of intellectual property rights – the Anti-Counterfeiting Trade Agreement (ACTA) and the Trans-Pacific Partnership Agreement (TPP). This post looks at the first of these agreements, ACTA; check back shortly for our discussion of TPP.
Archive for February, 2012
In August 2011, the University of Southern California joined Yale University and the Massachusetts Institute of Technology (‘MIT’) in selling $300 million of 100-year bonds, also known as ‘century bonds’. In October 2011, Ohio State University (‘Ohio State’), the most recent investment-grade borrower, issued $500 million of taxable AA-rated century bonds. These institutions of higher education are heating up the century bond market, once considered a rather rare bond.
News reports on the Eurozone in the last few weeks have been characterized by a dichotomy between those touting credit downgrades by rating agencies on the one hand, and attempts by Europe to reassure the markets on the other. Now that the major credit rating agencies are continuing their ‘mass downgrade’ despite the additional guarantees made by the EU leaders, the European Central Bank (ECB) is striking back by questioning the role of rating agencies in the marketplace.
The Network Lecture Series: Professor Nicholas C. Howson’s Insider Trading and China’s Administrative Law Crisis
Information is relevant to many exchanges. Those familiar with capital markets will appreciate the important role that information plays in capital trading. Securities regulators across the globe attempt to regulate the flow of information in markets to ensure efficiency and protect the interests of reasonable investors.
Prof. Nicholas Howson made a very interesting presentation regarding the nuances of Securities Law of the People’s Republic of China, 2006 (‘2006 Statute’) last Wednesday as a part of BCLBE’s lunch lecture series. His presentation addressed three broad subjects: 1) Section IV of the 2006 Statute concerning insider trading; 2) enforcement issues presented by the internal guidance issued under Article 74; and 3) general comments on the creation and reception of law in China.
Since November 28,2011 Judge S. Rakoff of the Federal District Court in Manhattan has been the man of the hour. His refusal to approve a $285 million settlement of the Securities and Exchange Commission (SEC) with Citigroup Global Markets has attracted the attention of all parties involved in alike cases pursued by the SEC. It is not the disapproval itself but rather the reasoning that causes the SEC and future defendants to fear the effectiveness of settlements.
Out, Out Brief Candle: European Union Competition Commission Blocks NYSE Euronext-Deutsche Boerse Merger
As reported by the Network last month, the proposed merger between NYSE Euronext and Deutsche Boerse (DB) was in jeopardy as Juan Alumnia, head of the European Union’s Competition Commission, publicly stated that he would recommend prohibiting the deal from going forward. On February 1, the commission officially blocked the proposed merger that would have created the world’s largest exchange operator. As a result of the decision, NYSE Euronext announced that “both companies have agreed to a mutual termination of the business combination agreement originally signed by the companies on February 15, 2011.”
The SEC will soon put the finishing touches on a rule stemming from one of the most infamous cases of fraud from the 2007-08 financial crisis. The new rule prohibits certain material conflicts of interest between those who create or distribute asset-backed securities (ABS), including synthetic ABS, and the investors in the ABS. This proposal takes direct aim at a transaction that, within the securities industry, has become a symbol of greed and profiteering: Goldman Sachs’s Abacus transaction.
Abacus 2007-AC1 (“Abacus 2007” or “Abacus”) was an investment vehicle designed to fail. It was created in February 2007 at the request of John Paulson, the hedge fund manager who made billions of dollars during the recession by shorting subprime mortgage-backed securities (MBS). Paulson selected the pieces of toxic subprime MBS that he wanted to short which were then packaged together and sold by Goldman to its clients, including German bank IKB and Dutch bank ABN Amro. The buyers were not aware that Paulson selected Abacus’s underlying portfolio; in fact, these banks were led to believe that an independent third party selected the mortgages. The Abacus 2007 transaction resulted in massive losses for IKB and ABN Amro, while Paulsen profited from the investment vehicle’s demise to the tune of over $1 billion.
The broad supervisory standards and guidelines issued by the Basel Committee on Banking Supervision (‘the Committee’) have greatly influenced the manner in which Banks are organized in various jurisdictions. The Committee claims that the main culprit behind the current financial crisis is excessive leverage assumed by banks both on and off the balance sheet. The latest in the series of proposed changes propounded by the Committee is Basel III, which seeks to restructure banks like shock absorbers rather than transmitters of financial risk.
The Federal Reserve Bank (‘Federal Reserve’) has responded to Basel III by asking bank holding companies (‘BHCs’) to submit comprehensive capital plans over the next 24 months. It is noteworthy that BHCs are required to notify the Federal Reserve of any change in their capital structure under Section 224.5(b) of Regulation Y issued under section 5(b) of the Bank Holding Company Act of 1956. Basel III, which has been designed conservatively, creates a framework whereby banking companies are to maintain higher common equity ratios, institute tougher stress tests for liquidity, and enhance market discipline and disclosure, among other things. Furthermore, trading positions will be subject to more stringent review, as the Federal Reserve believes that such changes are in the spirit of financial reform initiated by the Dodd-Frank Act.