2009 saw the regulators on both sides of the Atlantic continuing to push the boundaries of enforcement activity, with insider trading cases succeeding in relation to bonds and credit default swaps. This push can be expected to continue in 2010. The UK Financial Services Authority ("FSA") has issued sanctions even in face of clear evidence that the behaviour complained about was widely considered to be acceptable practice. This stance creates great uncertainty for those trading outside the equity markets, where regulatory guidance and precedent is less well developed. Significant questions have been raised about the extent to which credit default swaps are within the scope of the insider trading restrictions in the US and the UK.
In the equity markets, the Galleon hedge fund investigation in the US and recent FSA "clarification" about treatment of market rumour have reinvigorated the debate about the status of market "colour" and market "rumour" and when they can result in a restriction on trading. A resurgence of shareholder activism is also throwing up new questions about acceptable dialogue between shareholders seeking to promote good corporate governance.
The Wall Street Reform and Consumer Protection Act of 2009 - an Overview of the Banking Provisions
Teleconference recording - 01/21/10
Mayer Brown's Global Financial Markets Initiative helps clients deal with the legal and business challenges resulting from the ongoing turbulence in worldwide financial markets. By mobilizing the firm's global resources from multiple practices and offices, the Initiative provides clients with knowledgeable and timely counsel on a broad spectrum of their legal needs.Visit Mayer Brown's Financial Market Distress - Resources site for a compilation of links to the latest documents issued by regulatory and other governmental agencies worldwide, and additional commentary by Mayer Brown. Please bookmark it and check back often to stay informed on this rapidly evolving situation.