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We can’t be sure that Credit Suisse’s absolute inability to get out of its own way was the final straw. Maybe it was Deutsche Bank’s routine refusal to live up to its promises to stop breaking rules/laws/etc. Whatever it was, the Justice Department has had quite enough.

Deputy Attorney General Lisa Monaco on Thursday said prosecutors would consider all prior wrongdoing by corporations when deciding how to resolve a new investigation. Previously, prosecutors were allowed to only review cases whose facts were similar to the claims in the latest probe.

Corporations also won’t qualify for leniency programs unless they provide information on all employees or executives believed to have participated in crimes such as fraud or bribery, Ms. Monaco said…. Ms. Monaco, the department’s second-in-command, said prosecutors would also consider the outcome of civil regulatory investigations…. Prosecutors are also reviewing whether companies are living up to the terms of their probationary or nonprosecution deals, Ms. Monaco said.

Indeed, it seems, global regulators are generally weighing their charges in the balance and finding them wanting. Especially if they deal in cryptocurrencies.

The [U.K. Financial Reporting Council] asked 15 companies—up from 14 the previous year—to make a change to a significant aspect of their reporting, potentially due to errors or omissions of relevant information…. The regulator also found other areas of financial statements for some companies lacking detail. Companies should make disclosures about critical accounting estimates that are specific to their business and not just repeat accounting rules, the FRC said.

The [Financial Action Task Force] called on governments to broaden regulatory oversight of crypto firms and force more of them to take measures such as checking the identities of their customers and reporting suspicious transactions to regulators…. The guidelines take aim at DeFi projects such as decentralized exchanges, in which crypto traders can swap assets with each other, typically on an anonymous basis. The task force said the people or companies that own or operate such decentralized platforms could be considered virtual asset service providers, or VASPs, a designation that would force them to check users’ identities and take other measures against money laundering.

Rostin Behnam, the CFTC’s acting chairman, noted that the agency has settled two enforcement actions against cryptocurrency companies totaling $140 million. “But this is the tip of the iceberg,” he said in a confirmation hearing before the Senate Agriculture Committee.

The SEC indicated it wants to limit new bitcoin-related products to those that provide unleveraged exposure to bitcoin futures contracts…. Valkyrie Investments on Tuesday proposed to launch a fund that sought to amplify the daily returns of a portfolio of bitcoin derivatives, including futures contracts and options, by using 1.25 times leverage, or borrowed money. Valkyrie was asked to pull its proposal….

Anyway, in the interests of balance, here’s a counterpoint from a guy with no power who’ll be retiring before he gets any back.

[Sen. Pat] Toomey’s bill would prevent the SEC from instituting an outright ban on payment for order flow, an idea [SEC Chairman Gary] Gensler has said he’s considering as part of his broader efforts to reform the practice…. The odds Toomey’s bill becomes law anytime soon appear slim in a Congress controlled by Democrats. Gensler, nominated to lead the SEC by President Joe Biden, has been encouraged by progressive lawmakers to step up regulatory oversight.

Justice Department Vows Tougher Action Against White-Collar Crime [WSJ]
U.K. Audit Regulator Says Companies Need to Improve Disclosure on Revenue, Cash Flows [WSJ]
Global Regulators Back Tougher Rules to Prevent Criminals From Using Crypto [WSJ]
CFTC Chief Says Recent Crypto Cases Are ‘Tip of the Iceberg’ [WSJ]
SEC Won’t Approve Leveraged Bitcoin Fund [WSJ]
GOP Senator Toomey debuts bill to protect broker revenues, payment for order flow [CNBC]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.


merrick garland

Merrick Garland Gets Busy

The Justice Department has a new squad of crypto-cops, a new taste for white-collar criminal enforcement, a new demand for cyber-ransom notifications. And if you happen to know where all of Tether’s money is, it would appreciate a call on that, as well.

merrick garland

Merrick Garland Ready To Finish Off Short Sellers

What r/wallstreetbets started, the Justice Department aims to finish.

By US government [Public domain], via Wikimedia Commons

‘Wait, Senator, Don’t You Want To Hear About This Mug Who Said He Had An AI Supercomputer In His Mom’s Basement?’

Selections from the cutting-room floor of Gary Gensler’s Senate Banking Committee testimony.

By Mike Cauldwell ( [Public domain], via Wikimedia Commons

Tomorrow Is The Most Important Day Of The Year

For on that day, which shall go down in history, you shall gain the ability to trade bitcoins without trading bitcoins or even having bitcoins traded on your behalf.


SEC Would Not Bold As To Just Outright Kill Payment For Order Flow

It’s just going to smother it with regulations.