Orrick's Financial Industry Week In Review - May 7, 2012


Financial Industry Developments


CFTC Vote on Dodd-Frank Indemnification and Confidentiality Provisions

On May 1, the CFTC voted to issue a proposed interpretative statement to clarify that, in certain instances, foreign regulators are exempt from requirements under the Dodd-Frank Act to enter into confidentiality and indemnification agreements with Swap Data Repositories in connection with its access to swap data.  Comments may be submitted for 30 days from publication in the Federal Register.  CFTC Release.  

Rating Agency Developments


On May 2, Fitch updated its criteria for rating local and regional governments above the sovereign.  Fitch Report.

On May 2, Moody’s released its methodology for U.S. public housing authority capital fund bonds.  Moody’s Report.

On May 2, Moody’s released its methodology for rating securities of U.S. closed-end funds.  Moody’s Report.

On May 2, S&P released its methodology for analyzing mortgage collateral in Danish covered bondsS&P Release.

On April 30, Fitch published a report on CMBS special servicing resolution strategies.  Fitch Report.

Note: Free registration is required for rating agency releases and reports.

Asset Management


SEC Reopens Comment Period for Proposed Amendments to Broker-Dealer Rules

On May 3, the SEC re-opened the comment period for proposed amendments to net capital, customer protection, books and records, and notification rules for broker-dealers.  The SEC issued the proposed amendments on March 9, 2007.  Comments may be submitted for 30 days from publication in the Federal Register.  SEC Release.

Recent Orrick Alerts


Derivatives Month in Review

The Derivatives Month in Review highlights the month's important legal, regulatory and other newsworthy developments in the area of derivatives. Click here to view May's edition.

The Battle Over Life Settlement Policies

This article, published by The Daily Journal, was written by Orrick’s commercial litigation partners William Molinski and Khai LeQuang.   Please click here to view the article.

Short Selling: An Increasing Need For A Global Harmonisation

This article, published by PLC Multi-Jurisdictional Guide 2012-2013 – Capital Markets, was written by Orrick’s Rome corporate partner Giovanni Carotenuto.  Please click here to view the article.

RMBS Litigation


Second Circuit Affirms Denial of Class Certification in Actions by Pension Funds

On April 30, 2012, the United States Court of Appeals for the Second Circuit affirmed a lower court’s denial of class certification in two putative class action lawsuits brought by New Jersey Carpenters Health Fund and Boilermaker Blacksmith National Pension Trust against Goldman Sachs and the Royal Bank of Scotland, respectively.  The pension funds asserted claims under Sections 11, 12, and 15 of the Securities Act of 1933 for purported misrepresentations and omissions in various MBS offerings.  In a non-precedential summary order, the Second Circuit held that the court below had used the correct standard in finding that the suits will require individualized inquiries into plaintiffs’ knowledge of the alleged misstatements or omissions and therefore declined to certify the proposed classes as defined.  Decision.

Asset Management Fund Sues Morgan Stanley In Connection With Sale Of $122 Million in RMBS

On May 2, 2012, mutual fund Asset Management Fund and related affiliates filed a summons with notice to commence an action against Morgan Stanley in the Supreme Court of the State of New York seeking $122 million in compensatory and $122 million in punitive damages arising from alleged fraudulent misstatements and omissions made in connection with RMBS.  The fund makes claims for fraud, negligent misrepresentation, aiding and abetting fraud, declaratory judgment, breach of contract, and rescission.  Summons.

New York Court Dismisses RMBS Claims Brought By CIFG against Goldman and M&T Bank

On May 1, 2012, Justice O. Peter Sherwood of the New York State Supreme Court dismissed the majority of claims brought by CIFG Assurance North America, an insurer of RMBS, against M&T Bank and Goldman Sachs, the originator and underwriter respectively of those securities.  CIFG asserted causes of action for fraud, breach of contract and accounting and seeks $275 million in damages based on alleged misrepresentations and omissions in RMBS offerings.  The court dismissed all claims against M&T for lack of standing, and dismissed the fraud and accounting claims against Goldman Sachs, allowing only the breach of contract claims against Goldman Sachs to remain.  Decision.



Breakfast Briefing: Shipping Finance and Workouts: Current Issues and Trends in Distressed Markets

On May 16, Orrick will host a panel discussion in the New York Office to address the legal and business considerations of the shipping industry, including shipping workouts.  This briefing will discuss the complexities related to the industry with regard to jurisdictions, insurance, diligence, and other topics that arise when dealing with vessels.  Panelists will include Orrick partners Raniero D'AversaWilliam Haft and Laura Metzger, as well as Robert DiMarsico, Managing Director at Poseidon Capital Corp., and Senior Shipping Advisor at FTI Consulting.  For additional information and to RSVP, please click here.

iiBIG's 2012 Education Loan & Financing Executive Summit

May 9-10, 2012 – Orrick is sponsoring the two-day conference in Washington, D.C., which will bring together Student Loan Issuers & Investors, Student Loan Servicers, Student Loan Lenders - both private and public - and other key valued industry participants in the student loan industry to discuss the latest issues facing the industry – and to lay the groundwork for the road ahead in 2012 and beyond. Orrick Managing Associate Tonio DeSorrento will moderate the panel “Private Education Finance 2.0: Better For Borrowers, Better For Schools.”  Click here for more information.


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