Editor column

Citation

Davis, H.A. (2012), "Editor column", Journal of Investment Compliance, Vol. 13 No. 1. https://doi.org/10.1108/joic.2012.31313aaa.001

Editor column

Article Type: Editor column From: Journal of Investment Compliance, Volume 13, Issue 1

We begin this issue with an article by Roger Lorence that describes the most effective method for defrauded investors to recoup a portion of their loss through tax refunds and tax losses. He laments that the unfortunate investor who has already been defrauded in a financial scandal goes on to face rough treatment at the hands of the Internal Revenue Service when claiming a safe harbor for reporting theft losses. Next Gabriella Opromolla observes that investors are saying they are ready for an Islamic bank and Islamic financing capabilities in Italy and that Italy shares ethical and religious principles with the Islamic world, but nonetheless a number of EU and Italian regulatory hurdles will have to be surmounted before Italy enacts banking laws and regulations to permit and regulate Islamic finance. Betty Santangelo, Donald Mosher, William Friedman, and Matthew Truax explain principal revisions in a new money services business (MSB) rule, including an amended definition of an MSB, when the rules of the Bank Secrecy Act apply, and how the rule applies to foreign-located MSBs, money transmitters, foreign exchange dealers, check cashiers, and issuers of traveler’s checks.

Wide daily swings in the stock markets and the growth of program trading in recent years have raised questions among regulators about the activities of “large traders.” Russell Sacks and Michael Blankenship explain the Securities and Exchange Commission’s (SEC’s) large trader reporting rule, which enhances the commission’s ability to identify large market participants, collect information on their trading, and analyze their trading activity. Then Cynthia Krus summarizes the SEC’s recent guidance to corporations on their obligations to disclose the cybersecurity risks and cyber incidents they have faced, noting various places in a company’s financial statements those risks and incidents might be discussed and recommending steps companies should take to review their cybersecurity and cyber disclosure practices. Peter Romeo, Richard Parrino, Kevin Greenslade, and Alex Bahn discuss the SEC’s updated guidance on shareholder proposals, including how to verify a proponent’s eligibility to submit a proposal, how to address submissions of revised proposals, and how to withdraw no-action requests for proposals with multiple proponents.

Two related articles on SEC whistleblower incentives and protections follow. First, Thomas White, Douglas Davison, Gail Bernstein, Michael Dube and Arian June compare the SEC’s and the Commodity Futures Trading Commission’s (CFTC’s) whistleblower rules, including incentives for whistleblowers to report violations of securities and commodity trading laws either internally or directly to regulators, and recommend that companies subject to either the SEC or the CFTC whistleblower program enhance their cultures of compliance, bolster their internal reporting processes and encourage employees to utilize internal reporting mechanisms. Then William McLucas, Laura Wertheimer, Andrea Robinson, Mary Jo Johnson, Thomas White, Jonathan Rosenfeld, Michael Dube, and Arian June recommend ten proactive measures for companies to consider in response to the new whistleblower bounty programs.

James Earle and Allison Wilkerson note that the Dodd-Frank Wall Street Reform and Consumer Protection Act includes a host of requirements aimed at reforming executive compensation prices of publicly traded companies. Many of those reforms still await implementation through specific regulations. The authors believe the adoption and implementation of clawback policies in compliance with Section 954 will become a key executive compensation issue during 2012 and focus on that section’s proposed policies regarding the recovery of previously earned and paid compensation.

Finally, Patrick Dolan and Robert Alleman discuss the implications of two recent Supreme Court of Delaware rulings on life settlements, which are life insurance policies sold to third-party investors. The rulings affirmed the legality of selling life policies to third-party investors and provided guidance to investors on how to ensure that the policies are legally valid when originated or purchased in a settlement transaction.

Henry A. DavisEditor