April 23, 2009

Yes, There Were Regulatory Failures: Now What?

With so much going on, it's hard to keep up. Here is another worthy development that hasn't been addressed yet in this blog - this GAO report from March about the role of regulators in the current financial crisis, particulary regarding risk assessment by the banking and securities regulators. GAO's report provided little in way of surprise, but it is another document that folks will consider when deciding how our regulatory structure will look like after the coming reform.

The battle for this reform is being waged now and it's probably the most important one since the major reforms instituted during the Great Depression. Last month, SEC Chair Schapiro urged the Senate to not sacrifice investor protector (nor the SEC's role) as Congress considers creating one entity to oversee all risk in the financial system (see the related Reuters article). There clearly are high stakes involved in this debate.

By the way, I found it interesting that Jon Stewart had Elizabeth Warren, head of the TARP oversight board, on The Daily Show last week (here is the archived video). Overall, I wasn't too keen on her commentary - but I did like her closing remarks, when she highlighted how important it was to not continue watering down our regulatory framework. She explained how this country went through 150 years of "boom and bust" cycles and how those disappeared for 50 years after FDR instituted strong regulations during the Great Depression. Then those cycles reappeared in the form of the late '80s S&L crisis, the late '90s Long Term Capital scare, the Enron and related frauds in '02 and now this serious credit meltdown. She believes the last 20 years of boom and bust can be attributed to weaker regulations. Food for thought...

I can relate to Elizabeth's senior moment when she forgot what PPIP stood for! She can take a refresher during next Thursday's webcast - "Tripping the PPIP - and TALF - Fantastic" - featuring Alan Beller of Cleary Gottlieb, Tony Nolan of K&L Gates and Meg Tahyar of Davis Polk.

Today's Webcast: "XBRL: What Lawyers Need to Know"

Please print off these "Course Materials" prior to catching today's webcast: "XBRL: What Lawyers Need to Know." John Huber and Dave Lynn will go over what types of issues lawyers need to know - then, Louis Matherne of Clarity Systems will give a short demo tailored to lawyers so you can see how XBRL will change the document production workflow for creating disclosure documents.

As I mentioned in this blog on Monday, companies will need to change their 10-Q and 10-K cover pages, even if they aren't impacted by the XBRL rule changes yet - there continues to be a lot of follow-up questions in our "Q&A Forum" on this topic. And on Tuesday, XBRL US published its 2009 version of the US GAAP XBRL taxonomies.

Special Meetings Called By Shareholders: GE Lowers Its Threshold

Been meaning to blog about this WSJ article entitled:“GE Gives Shareholders More Power.” The article notes that the company has reduced the threshold allowing shareholders to call a special meeting from 40% to 25%. And even though a 25% threshold for a company the size of General Electric is huge, it's still a notable development. Here’s GE's Form 8-K regarding the change.

As noted in this article, it looks like GE's annual meeting held yesterday had a bit of drama when one of Fox News' employees used the microphone reserved for shareholders to ask questions - without identifying himself as a reporter. When it comes to concerns about old-style journalists being replaced by bloggers, I also get worried about them - but then I think about incidents like this to remind me that there are so many folks pretending to be journalists in the mainstream press these days that the glory days of that medium clearly are long gone.

I know it's late, but I've been meaning to gloat about my March Madness picks. Not only did I pick three of the Final Four (only missed Duke), I did pick North Carolina to win. Check out this bracket that captures the expected average salaries of graduates from schools that were in the tourney field.

- Broc Romanek