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Article
Publication date: 1 October 2005

Michael R. Rosella

To explain reporting requirements under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) that must be followed by advisers and brokers who exercise…

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108

Abstract

Purpose

To explain reporting requirements under Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) that must be followed by advisers and brokers who exercise investment discretion over accounts that hold exchange‐traded equity securities, and to describe reporting requirements under Section 16 of the Exchange Act on certain persons considered “insiders” of a company that has a class of equity securities registered under Section 12 of the Exchange Act.

Design/methodology/approach

Describes the required reporting of significant acquisition and ownership positions on Schedules 13G and 13D, including the obligations of exempt investors, passive investors, and firms and their control persons; describes the required reporting of equity positions in managed portfolios of more than $100 million on Form 13F; and describes the reporting obligations of “insiders” (directors, officers, and principal stockholders) under Section 16 of the Exchange Act, including the content of Form 3 – Initial Statement of Beneficial Ownership of Securities, Form 4 – Statement of Changes of Beneficial Ownership of Securities, and Form 5 – Annual Statement of Beneficial Ownership of Securities.

Findings

Firms and their control persons managing discretionary accounts that hold more than 5 percent of an SEC‐reporting company's equity securities or manage discretionary accounts with market values of $100 million or more; institutional investment managers who exercise investment discretion over accounts with a fair market value of at least $100 million, and corporate insiders have significant reporting obligations under the Exchange Act.

Originality/value

Provides a clear, detailed reference concerning Section 13 and Section 16 Reporting Requirements.

Details

Journal of Investment Compliance, vol. 6 no. 4
Type: Research Article
ISSN: 1528-5812

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Article
Publication date: 8 October 2019

Arthur L. Zwickel, Keith D. Pisani and Alicia M. Harrison

The purpose of this paper is to provide investment advisers, broker dealers, individual investors and other securities firms with a current and detailed summary of the…

Abstract

Purpose

The purpose of this paper is to provide investment advisers, broker dealers, individual investors and other securities firms with a current and detailed summary of the reporting regime under Sections 13 and 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) and guidance on how to comply with the disclosure requirements of the U.S. Securities and Exchange Commission (the “SEC”) on Schedule 13D, Schedule 13G, Form 13F, Form 13H and Forms 3, 4 and 5.

Design/methodology/approach

The approach of this paper discusses the transactions or beneficial ownership interests in securities that trigger a reporting requirement under Section 13 and/or Section 16 of the Exchange Act, identifies the person or persons that have the obligation to file reports with the SEC, details the information required to be disclosed in the publicly available reports, and explains certain trading restrictions imposed on reporting persons as well as the potential adverse consequences of filing late or failing to make the requisite disclosures to the SEC.

Findings

The SEC continues to provide updated guidance on the disclosure requirements under Sections 13 and 16 of the Exchange Act, which individual investors and securities firms – largely insiders – must take into account when filing any new or amended reports on Schedule 13D, Schedule 13G, Form 13F, Form 13H and Forms 3, 4 and 5.

Originality/value

This article provides expert analysis and guidance from experienced securities lawyers.

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Article
Publication date: 30 March 2020

Paul Michael Gilmour

This paper aims to critically explore the challenges facing the UK in implementing registers of beneficial owners, a measure mandated by the EU’s anti-money laundering…

Abstract

Purpose

This paper aims to critically explore the challenges facing the UK in implementing registers of beneficial owners, a measure mandated by the EU’s anti-money laundering (AML) directive to enhance beneficial ownership transparency.

Design/methodology/approach

This study systematically reviews the literature surrounding beneficial ownership transparency to critically analyse the extent to which challenges facing the UK, impact upon its ability to successfully implement registers of beneficial owners.

Findings

This study demonstrates that a lack of beneficial ownership transparency facilitates money laundering by concealing corrupt wealth and frustrating authorities’ efforts to trace illicit finance. It demonstrates that implementing registers of beneficial owners may be a superficial approach to tackling the multifaceted problem of money laundering. Better intergovernmental cooperation is required to improve beneficial ownership transparency and to ensure measures to curb offshore money laundering are successful.

Research limitations/implications

This research focuses on one aspect of AML control from the UK’s perspective. Further work is needed to investigate the concerns from the perspective of offshore jurisdictions and how global AML rule affects developing economies.

Practical implications

The study informs policymakers and other professionals implementing the UK’s registers of beneficial owners to enhance future strategies and better combat offshore money laundering.

Originality/value

This is the only study to explore the challenges facing the UK in implementing registers of beneficial owners, thus providing novel insight into the moral, legal and practical dilemmas to imposing AML control.

Details

Journal of Money Laundering Control, vol. 23 no. 4
Type: Research Article
ISSN: 1368-5201

Keywords

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Article
Publication date: 9 July 2021

Marc-Alain Galeazzi, Barbara Mendelson and Malka Levitin

The purpose of this article is to inform stakeholders about the Anti-Money Laundering Act of 2020 (AMLA), explain its impact on the U.S. anti-money laundering (AML…

Abstract

Purpose

The purpose of this article is to inform stakeholders about the Anti-Money Laundering Act of 2020 (AMLA), explain its impact on the U.S. anti-money laundering (AML) regime, and highlight critical updates for financial institutions.

Design/methodology/approach

The article provides an overview of the AMLA, and specifically addresses three key components: (1) the development of uniform beneficial ownership requirements and the creation of a beneficial ownership registry at the Financial Crimes Enforcement Network (FinCEN); (2) the expansion of FinCEN’s powers and the Bank Secrecy Act/AML program requirements; and (3) new subpoena powers with potential extraterritorial effect granted to the U.S. Secretary of the Treasury and the U.S. Attorney General for documents located at foreign banks that have a correspondent banking account in the U.S. The article also notes the purpose and goals of the AMLA.

Findings

The AMLA is the first major overhaul of the U.S. AML regime since the 2001 USA PATRIOT Act, and is designed to strengthen national security, protect the financial system, and simplify compliance obligations. The beneficial ownership reporting requirements represent an effort to combat illicit financial activity conducted by shell companies formed and registered in the U.S.

Originality/value

The article provides financial institutions with a brief overview of a lengthy new law that will impact their AML compliance obligations. Financial institutions should be on alert for forthcoming regulations.

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Article
Publication date: 12 September 2008

William McGuiness, Peter L. Simmons, Robert C. Schwenkel and John E. Sorkin

The purpose of this paper is to explain the implications of a June 11, 2008 decision by the US District Court for the Southern District of New York in CSX Corp. v. The…

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116

Abstract

Purpose

The purpose of this paper is to explain the implications of a June 11, 2008 decision by the US District Court for the Southern District of New York in CSX Corp. v. The Children's Investment Fund Management (UK) LLP concerning beneficial ownership and reporting obligations under Section 13(d) of the Securities Exchange Act of 1934 for long parties to cash‐settled total return equity swaps.

Design/methodology/approach

The paper summarizes the decision, discusses the court's analysis as written by Judge Lewis A. Kaplan, notes the court's limitation of its ruling to the facts of the case, explains why two funds that “compare notes” may be considered a group, discusses the permanent injunction against the defendants enjoining them from future violations of Section 13(d), and analyzes the implications of the judge's decision.

Findings

A new decision by the federal district court in New York creates uncertainty regarding whether the long party to a cash‐settled total return equity swap will be deemed to beneficially own the publicly traded reference security for purposes of Section 13(d) of the Securities Exchange Act of 1934. Holders of cash‐settled total return swaps have historically relied on the absence of the legal right to vote or dispose of the reference security as a basis not to file a 13D with respect to the shares referenced in those swap contracts. The new decision casts doubt on that reasoning, and finds that an investor that consciously structured its swap contracts to try to end‐run its otherwise applicable reporting obligations was deemed to beneficially own the shares subject to the swaps, and accordingly had violated Section 13(d) by failing to file a Schedule 13D in the required time.

Practical implications

The ruling is important for financial institutions and investors who deal in derivatives such as equity swaps and who must determine whether and when reporting under Section 13(d) is required.

Originality/value

The paper is an analysis and provides guidance by experienced securities lawyers.

Details

Journal of Investment Compliance, vol. 9 no. 3
Type: Research Article
ISSN: 1528-5812

Keywords

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Article
Publication date: 1 April 2002

Andrew Edwards

In all its many manifestations, economic crime remains a threat to civilisation.

Abstract

In all its many manifestations, economic crime remains a threat to civilisation.

Details

Journal of Money Laundering Control, vol. 5 no. 4
Type: Research Article
ISSN: 1368-5201

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Article
Publication date: 1 June 2002

Richard J. Hay

This paper considers supranational initiatives ‐ particularly those emanating from the Organisation for Economic Co‐operation and Development, the Financial Action Task…

Abstract

This paper considers supranational initiatives ‐ particularly those emanating from the Organisation for Economic Co‐operation and Development, the Financial Action Task Force and the Financial Stability Forum ‐ proposing changes in the regulation of offshore financial centres. The implications of the withdrawal of US support for elements of the initiative are reviewed. The underlying rationales for change are considered, as are the probable and appropriate response for the stakeholders in the offshore centres, including governments, financial institutions and clients.

Details

Journal of Financial Regulation and Compliance, vol. 10 no. 2
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 5 June 2019

Mahdi Salehi and Vahid Molla Imeny

Money laundering has become a global concern in recent years, and many countries attempt to employ some preventive measures to cope with this phenomenon. Anti-money…

Abstract

Purpose

Money laundering has become a global concern in recent years, and many countries attempt to employ some preventive measures to cope with this phenomenon. Anti-money laundering (AML) controls vary in different countries, and consequently many studies, to date, have taken account of these differences along with the AML efforts. In this regard, financial institutions play an important role to tackle money laundering by involving in all three stages of money laundering (placement, layering and integration). The purpose of this paper is to investigate the AML situation of the Iranian banks and also study some related variables.

Design/methodology/approach

Using the Wolfsberg questionnaire, a survey consisting of 24 Iranian authorized banks in 2017 was conducted.

Findings

We conclude that Iranian banks have proper AML controls in place. Furthermore, it is concluded that banks with more staffs and more experienced employees are more likely to establish strong AML controls; conversely, banks with more branches are less likely to set up strong AML controls.

Originality/value

The present study is the first study conducted in Iran, and the outcomes of the study may be helpful to the Iranian and also International Banking System to establish stronger AML controls.

Details

Qualitative Research in Financial Markets, vol. 11 no. 4
Type: Research Article
ISSN: 1755-4179

Keywords

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Article
Publication date: 15 June 2020

Souha Siala Bouaziz, Ines Ben Amar Fakhfakh and Anis Jarboui

The purpose of this study is to investigate the impact of the relationship between shareholder activism and earnings management on the market performance of French companies.

Abstract

Purpose

The purpose of this study is to investigate the impact of the relationship between shareholder activism and earnings management on the market performance of French companies.

Design/methodology/approach

This study used 385 firm-year observations drawn from a sample of French companies belonging to the SBF 120 index from 2008 to 2012. Data was collected from annual reports of sample companies. To measure earnings management, this study used the model of Raman and Shahrur (2008). The relationship between shareholder activism, earnings management and market performance using the panel data regression model was empirically examined.

Findings

The results prove that shareholder activism, as indicated by shareholder proposals, has no impact on market performance. However, the existence of shareholder activism affects the market performance positively. In fact, a minimum of proposals proves that shareholder activism plays an appropriate and effective role in creating value. Thus, several activists would resort to “a private activism” which could be the best and the least expensive form. This form of activism is called “behind the scenes.” Findings also show that earnings management has a negative impact on market performance. As a matter of fact, these findings allow to conclude that the firm performance decreases whenever managers undertake to earnings management. Also, earnings management behavior is mainly opportunistic. Finally, the relationship between shareholder activism and earnings management has no impact on market performance. This result reveals that shareholder activism proves to be an ineffective mechanism that does not alter the accounting choices, particularly in relation to earnings management. This result shows the inability of active shareholders to define and implement strategies across their proposals, namely, “the lack of monitoring competence.”

Research limitations/implications

It is important in future research to evaluate the impact of behind the scenes interventions on corporate governance. Also, this paper gives a larger dimension to the effect of shareholder activism on the market performance in the specific context of earnings management, thus justifying the need to expand this study using other methodologies to deepen and better understand this relationship in this context.

Practical implications

The paper's evidence contributes to an understanding of corporate governance. The finding of this study will help in monitoring and controlling fraudulent earnings management practices that effect on market performance. Further, this study is important to investors, academics and policymakers, as it demonstrates that governance reforms that encourage firms to adopt better governance practices that reduce the likelihood of earnings management.

Originality/value

To the best of the author’s knowledge, this paper pioneers in focusing on the impact of the shareholder activism and earnings management on the market performance because previous studies put more emphasis on pair-wise relations (Shareholder activism-earnings management, earnings management-market performance and shareholder activism-market performance). This study provides empirical evidence on the effectiveness of the relationship between shareholder activism and earnings management on market performance.

Details

International Journal of Law and Management, vol. 62 no. 5
Type: Research Article
ISSN: 1754-243X

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Article
Publication date: 11 May 2015

Ewan Sutherland

– This paper aims to examine how telecommunications in Kenya was affected by the absence of good governance and the presence of rent-seeking by ministers.

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1075

Abstract

Purpose

This paper aims to examine how telecommunications in Kenya was affected by the absence of good governance and the presence of rent-seeking by ministers.

Design/methodology/approach

A single-country case study combining approaches of anti-corruption and telecommunications methodologies using secondary and legal sources.

Findings

Corruption has been a significant factor, but has also led to distortions in the market which may have been more significant.

Research limitations/implications

Given the sensitivity of corrupt dealing, it is impracticable to interview the principals, some of whose identities are concealed behind front companies.

Practical implications

It is necessary to modify telecommunications practice to eliminate the use of front companies and those registered in opaque registries to identify conflicts of interests.

Originality/value

This is one of only four countries examined in terms of bribery and corruption in telecommunications.

Details

info, vol. 17 no. 3
Type: Research Article
ISSN: 1463-6697

Keywords

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