SEC studies disclosure in securitizing; but regulatory changes unlikely to broaden fiduciary obligations of investment banks

Article Abstract:

The SEC is considering changing disclosure requirements for securitization transactions. Although nontraditional, these are still a debt security. An investment banker owes the securitization issuer the same fundamental duties as to issuers of traditional securities. Thus, despite differences between the securitization and traditional capital markets, the duties owed by an investment bank in a securitization deal are likely to be limited to the contractual and it seems unlikely that courts would find that fiduciary duties are also part of the picture.

Investment banks, Disclosure (Securities law), Fiduciary duties

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New derivatives agreement differs from 'bankers trust.'(In Focus: Securities)

Article Abstract:

A potential conflict is brewing between the recent settlements Banker's Trust reached with several regulatory agencies and the voluntary disclosure standards six major brokerage firms issued on Mar 9. The settlements hold that BT should have disclosed information that brokerages generally consider either proprietary or non-firm-specific and publicly available. Regulators say their settlement with BT applies only to that firm. At issue are the methodologies and formulas the firms use to value their derivative holdings.

Interpretation and construction, Cases, Derivatives (Financial instruments), Valuation, Securities law, Bankers Trust Co. (Chicago, Illinois)

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Unexpected SEC issues are arising online; particular features of the Internet can affect insider trading, stock manipulation and other areas subject to SEC regulation

Article Abstract:

The SEC has recognized that Internet-based communication has negative results such as an increase in the chance of insider trading along with the positive ones such as faster dissemination of information to investors in a more cost-effective, equitable way. "Misappropriation" of material, nonpublic corporate information may occur, and this is so far not covered by insider trading law. Stock manipulation, unregistered sales of securities and liability for analysts' reports are other issues.

Investigations, Securities fraud, Insider trading in securities, Insider trading (Securities)

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