Yesterday, Senators Charles Grassley (R-IA) and Carl Levin (D-MI) introduced the Hedge Fund Transparency Act ("HFTA"), which would require hedge funds, private equity and other private funds with $50 million or more in assets, or assets under management, to register with the Securities and Exchange Commission ("SEC"), notwithstanding the availability of exemptions from registration for privately offered funds under Sections 3(c)(1) and 3(c)(7) of the Investment Company Act of 1940 ("1940 Act"), as renumbered.
Client Alert | January 30, 2009
Responding to market conditions in September 2008, the U.S. Securities and Exchange Commission (the "SEC" or "Commission") and other regulatory and governmental authorities around the globe took dramatic steps to address the market turmoil resulting from potentially manipulative short selling. The measures released in September 2008 have been updated, particularly in the U.K.
Client Alert | January 19, 2009
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | January 15, 2009
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | January 13, 2009
On December 30, 2008, the Securities and Exchange Commission delivered to Congress a report, mandated by the Emergency Economic Stabilization Act, on mark-to-market accounting standards and their application to financial institutions. The report concludes that fair value accounting standards should not be suspended, but makes eight recommendations to improve their application, including additional guidance for determining fair value in inactive markets. The report finds that investors generally believe fair value accounting increases transparency and facilitates investment decision-making. The report also observes that fair value accounting did not appear to play a meaningful role in the bank failures of 2008, but rather that those failures appeared to be the result of gr
Client Alert | January 9, 2009
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.We are providing updates on key regulatory and legislative issues, as well as information on legal issues that we believe could prove useful as firms and other entities navigate these challenging times.This update focuses on the Federal Reserve Board's announcement that it expects to begin purchasing mortgage-backed securities (MBS) in early January 2009.On November 25, 2008, the Federal Reserve announced three major new initiatives as follows: The Term Asset-Backed Securities Loan Facility (TALF) -- under which the Federal Reserve Bank of New York, with Treasury credit protection in
Client Alert | January 5, 2009
On December 9, 2008, as anticipated, the Department of the Treasury's Financial Crimes Enforcement Network ("FinCEN") issued the Bank Secrecy Act/Anti-Money Laundering Examination Manual for Money Services Businesses (the "Examination Manual" or "the Manual"). This 153-page document sets forth a road map for examinations by the Internal Revenue Service ("IRS"), to which FinCEN has delegated examination authority for Money Services Businesses ("MSBs") and other businesses that do not have a federal regulator but that have been designated as financial institutions under the Bank Secrecy Act and its implementing regulations (collectively, the "BSA"). The Manual is available from the FinCEN website, www.fincen.gov
Client Alert | December 23, 2008
In connection with regulatory reform legislation anticipated to be introduced in the 111th Congress, consideration will be given to enacting proposals to further legislate the swaps market and, in particular, credit default swaps ("CDS") and the over-the-counter ("OTC") derivatives market.
Client Alert | December 23, 2008
I. E-Proxy Update In 2007, the Securities and Exchange Commission (the "SEC") adopted rules providing for proxy materials (including the proxy statement, a proxy card, the "glossy" annual report and any other soliciting materials) to be made available to shareholders via a publicly accessible Internet website other than the SEC's EDGAR website (the "E-Proxy Rules").
Client Alert | December 19, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | December 16, 2008
On November 5, 2008, the Department of the Treasury, Office of Foreign Assets Control ("OFAC") issued guidance, Opening Securities and Futures Accounts from an OFAC Perspective, to make it clear that guidance or actions by its sister Treasury bureau, the Financial Crimes Enforcement Network ("FinCEN"), under the Bank Secrecy Act ("BSA") do not affect the responsibilities of the securities and futures industry to comply with the economic and trade sanctions administered and enforced by OFAC. This OFAC issuance follows the announcement by FinCEN on October 30, 2008, that FinCEN was withdrawing proposed rulemakings issued in 2002 and 2003 which would have required anti-money laundering ("AML") programs for unregistered investment companies, invest
Client Alert | December 9, 2008
Position on Waiver of Attorney-Client Privilege Follows Trend of DOJ, SEC The Financial Industry Regulatory Authority ("FINRA") has recently provided guidance on the extent to which "extraordinary cooperation" by a firm or individual in an investigation can influence FINRA's enforcement decisions. In particular, with respect to waiver of the attorney-client privilege, the guidance states that waiver or non-waiver of the privilege will not be considered in whether to grant credit for cooperation, but rather it is the assistance in "uncovering the facts in an investigation" that will yield credit for cooperation. In this respect, FINRA follows the trend recently set by the Securities and Exchange Commission and the Department of Justice. Despit
Client Alert | December 5, 2008
Over the past year, turmoil in the financial markets has led to increased litigation, and the high-profile failures of several major financial institutions have focused attention on the protections that are available for directors and officers of public companies. Fortunately, it is still rare for directors and officers to contribute personally to the settlement of a lawsuit. However, more than ever before, strong indemnification protections and comprehensive insurance for directors and officers ("D&O insurance") are vital to a company's ability to attract and retain qualified directors and officers. This client alert discusses several recent developments in the areas of director and officer indemnification and D&O insurance and then concludes by offerin
Client Alert | December 3, 2008
On November 25, 2008, RiskMetrics Group ISS Governance Services (ISS), a leading proxy advisory firm, released its U.S. and international corporate governance policy updates for the 2009 proxy season. The ISS U.S.
Client Alert | December 1, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | November 25, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.We are providing updates on key regulatory and legislative issues, as well as information on legal issues that we believe could prove useful as firms and other entities navigate these challenging times.This update focuses on the final rule issued today by the Federal Deposit Insurance Corporation (the "FDIC") governing its Temporary Liquidity Guarantee Program (the "TLGP").On October 13, 2008, the FDIC adopted the TLGP, which guarantees newly issued senior unsecured debt of banks, thrifts, and most holding companies of federally insured depository institutions (the &quo
Client Alert | November 21, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.We are providing updates on key regulatory and legislative issues, as well as information on legal issues that we believe could prove useful as firms and other entities navigate these challenging times.This update focuses on a series of hearings which are being conducted by Congressman Henry Waxman, chair of the House Committee on Oversight and Government Reform, and, in particular, the recent hearing on hedge funds' role in the financial crisis.BackgroundOn Thursday, October 2, 2008, Representative Waxman announced that the House Committee on Oversight and Government Reform would hold a seri
Client Alert | November 19, 2008
Earlier this week a federal court in New York dismissed a test case by a prominent corporate law scholar who is seeking to use SEC rules to establish new procedures for shareholders to use the company proxy to put forward shareholder proposals, including alternate director candidates.
Client Alert | November 14, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | November 13, 2008
On November 7, 2008, the Securities and Exchange Commission's Division of Corporation Finance (the "Division") issued Staff Legal Bulletin No. 14D (the "Bulletin"), which briefly addresses four technical points regarding the shareholder proposal process under Rule 14a-8 of the Securities Exchange Act of 1934, as amended ("Rule 14a-8").
Client Alert | November 10, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | November 7, 2008
The SEC’s Securities Offering Reform of December 2005 set the clock ticking for shelf registration statements on Form S-3; as a result, many shelf registration statements that were in effect on December 1, 2005 will expire on December 1, 2008.
Client Alert | November 5, 2008
Washington, D.C. of counsel Susan Grafton and associate S. Joy Dowdle are the authors of "Adapting to the Regulatory Clamp Down on Short Selling: The Investment Manager's Perspective" [PDF] published in the November 2008 issue of IAA"s Compliance Corner.
Client Alert | November 3, 2008
Many companies originally granted stock options to provide an incentive to employees to remain with the company and to enable them to share in the stockholder value that they help create. The recent prolonged and widespread stock market downturn has increased pressure on these companies to develop an effective strategy to provide stock compensation to employees and other service providers who feel as if all they have are worthless options and to use limited stock plan share reserves more effectively. The last broad market downturn in 2001 ushered in the first large-scale response to underwater options. The legal environment and the degree of oversight of large institutional investors and their advisory services have both changed greatly since that time. Gibson Dunn�
Client Alert | October 27, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 23, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 23, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 21, 2008
Many of our clients have been facing unprecedented new challenges as a result of the dramatic economic events that have occurred over the last month. The financial markets continue to evolve in Washington on a real-time basis and the daily volatile gyrations in the stock markets around the world have led to uncertainty, anxiety and issues of first impression for many of our clients. We believe that the events that occur in the coming months will shape not only the financial futures of many of our clients and their competitors, but also the world economy.
Client Alert | October 20, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 20, 2008
On October 14, 2008, RiskMetrics Group – ISS Governance Services ("ISS"), a leading proxy advisory firm, announced the opening of the comment period for its proposed 2009 proxy voting policies. ISS is accepting comments on the proposed policy updates through October 31, 2008. It expects to release the final U.S.
Client Alert | October 17, 2008
As the most recent fiscal quarter has come to a close, public companies are preparing their periodic reports in the midst of turmoil in the general economy and upheaval in credit markets. These developments create special challenges for the disclosures required in periodic reports filed with the securities and exchange commission and warrant a discussion of current issues and approaches.
Client Alert | October 15, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 14, 2008
The SEC and FASB staffs have recently issued additional guidance on the application of FASB No. 157 ("Fair Value Measurements") when determining the fair value of illiquid financial instruments. First, the SEC and FASB staffs issued a joint press release on September 30, 2008, which included a series of Q&As on this topic.
Client Alert | October 13, 2008
The SEC's Division of Enforcement issued its first-ever manual this week. Intended as a reference for Enforcement Division staff, the Manual provides important insight into SEC decision-making and processes on such key matters as evaluating possible investigations, opening and closing matters, issuing Wells letters, communicating with senior SEC officials, responding to document subpoenas, "witness assurance" letters, contacting current and former employees, and respecting the attorney-client privilege during an investigation. It will be an essential guide for anyone with a matter before the Division of Enforcement.
Client Alert | October 10, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 9, 2008
Los Angeles partner Michael Farhang is the author of "Option Backdating and Independent Directors: An Analysis of Litigation Trends" [PDF] published in the October 6, 2008 issue of BNA Inc.'s Corporate Governance Report.
Client Alert | October 6, 2008
With the Emergency Economic Stabilization Act (EESA) now law, Treasury is moving quickly to choose advisers, issue regulations, and hire companies to serve as asset managers for the Troubled Asset Relief Program (TARP).Today, Secretary Paulson announced that he has selected Neel Kashkari to be the interim head of the new Office of Financial Stability, which will implement the Troubled Asset Relief Program. Kashkari is currently Assistant Secretary for International Economics and Development and has been a key adviser to Secretary Paulson. It is our understanding that Secretary Paulson intends to hire a small staff with expertise in asset management, accounting, and legal issues to commence the Troubled Asset Relief Program.
Client Alert | October 6, 2008
As a result of President Bush's signing of the Emergency Economic Stabilization Act of 2008 (H.R. 1424), the Securities and Exchange Commission's Division of Trading and Markets announced today that the prohibition on short sales in the securities of financial institutions will expire at 11:59 p.m.
Client Alert | October 3, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 3, 2008
We are pleased to provide our clients and friends with a section-by-section analysis of the Emergency Economic Stabilization Act of 2008 (hereinafter, the "Act") as passed by the Senate, by a vote of 74-25, on October 2, 2008.
Client Alert | October 2, 2008
Companies law in England and Wales is undergoing reform and modernisation by way of the phased implementation of the Companies Act 2006 (the "2006 Act").
Client Alert | October 1, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | September 30, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.What follows is our latest in a series of updates on key regulatory and legislative issues.Bipartisan RejectionLawmakers labored over the weekend to craft a financial package that would be palatable to both Democrats and Republicans, as well as to constituents back home. Draft legislation was circulated and tinkered with all weekend until the House Rules Committee, at 12:01 a.m.
Client Alert | September 29, 2008
On September 24, 2008, the Financial Accounting Standards Board approved a staff recommendation to reconsider the Exposure Draft issued June 5, 2008 titled, Disclosure of Certain Loss Contingencies.
Client Alert | September 26, 2008
* Updated to reflect additional regulatory guidance and action. Responding to current market conditions, the U.S. Securities and Exchange Commission (the "SEC" or "Commission") and other regulatory and governmental authorities around the globe have taken dramatic steps to address the current market turmoil resulting from potentially manipulative short selling.
Client Alert | September 26, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.What follows is our latest in a series of updates on key regulatory and legislative issues.Debate on the HillIn contrast to yesterday's public display of political and policy wrangling, today's activity was largely behind the scenes as designated negotiators worked to hash out the details of a rescue plan. Though congressional leaders reported yesterday that they had reached a compromise agreement, Republicans announced that they had developed a competing proposal late Thursday night. House Minority Leader John Boehner wrote Speaker Pelosi today to express concern that the Democra
Client Alert | September 26, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking government responses to the turmoil that has reshaped our capital and credit markets. The following is an update on key regulatory and legislative issues that are of particular interest to and are likely to affect hedge funds and private equity funds.Federal Reserve Board Enhances Passive Investment Framework for Minority Investors in Bank Holding Companies and BanksIn connection with its various efforts to increase the capital and liquidity available to the banking industry, on September 22, 2008 the Federal Reserve Board (the "Fed") issued a new policy statement providing additional guidance on making equity investments in a bank or bank holding company ("BHC"). Importantly, the iss
Client Alert | September 26, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | September 25, 2008
On Friday, September 19, 2008, the Securities and Exchange Commission announced a "sweeping expansion" of its ongoing investigation of possible manipulation of the price of equity securities of financial institutions, to determine whether certain market participants engaged in illegal activity to enhance the value of short positions. SEC Chairman Christopher Cox stated that the investigation will look into the activity of investors with significant short positions in equity markets and positions in credit default swaps. This expansion, according to Chairman Cox, supplements ongoing SEC investigations concerning the origination and securitization of sub prime mortgage loans, the involvement of credit rating agencies and insurers in the securitization proce
Client Alert | September 24, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.What follows is our latest in a series of updates on key regulatory and legislative issues.Congressional HearingsToday, Treasury Secretary Henry Paulson and Federal Reserve Board Chairman Ben Bernanke testified before the House Financial Services Committee. Both Secretary Paulson and Chairman Bernanke reiterated the message they conveyed to the Senate Banking Committee yesterday, urging Congress to pass legislation quickly and warning of dire economic consequences if the federal government does not intervene soon. Tomorrow, the House Financial Services Committee will hear testimon
Client Alert | September 24, 2008