Global Financial Market Watch : Global Financial Lawyer & Attorney : K&L Gates Law Firm : Government Enforcement, Investment Management

By: Sean P. Mahoney

As 2010 begins, the FDIC has indicated that private equity investors will face increased challenges in making investments in failed institutions, as certain approaches to making such investments without becoming subject to onerous FDIC requirements will not be approved.

In August 2009, the FDIC issued its “Statement of Policy on Qualifications for Failed Bank Acquisitions” (the “Policy Statement,” issued August 26, 2009 and available here), which generally subjects private investors in failed institutions to, among other things, increased capital requirements at the bank level, limits on transactions with their affiliates, prohibitions on silo ownership structures, and mandatory holding periods. The Policy Statement contained exceptions to its applicability, and many investors have been structuring their transactions to take advantage of these exceptions.
 

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By Sean P. Mahoney and  Anthony R. G. Nolan

A possible rule change being considered by the Federal Deposit Insurance Corporation (“FDIC”) may make it difficult for banks and other securitization market participants to manage risks associated with FDIC conservatorship or receivership of sponsoring banks.  This troubling development warrants attention not only from banks, but also from other participants in bank securitization transactions including servicers, rating agencies, law firms and auditors.   

To view the complete alert online, click here.

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By: Anna Paglia and Paul de Cordova
 

Effective Sunday, January 3, 2010, foreign financial institutions are authorized to establish representative offices in Dubai (see our client alert dated December 17, 2009, available here).

In response to several requests for information that the Dubai Financial Services Authority (“DFSA”) received in connection with the new regime, on December 24, 2009, the DFSA published a Q&A document addressing several operational issues affecting representative offices. 
 

To view the complete alert online, click here.

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By: Phillip J. Kardis II,  Vincent J. Pisano, Douglas J. Ellis

On December 16, 2009, the Securities and Exchange Commission (the “SEC”) adopted amendments (the “Amendments”) to its executive compensation and corporate governance disclosure requirements. The Amendments are effective on February 28, 2010. Accordingly, many public companies face significant new disclosure requirements for the 2010 proxy season.

To view the complete alert online, click here.

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By: Jonathan Lawrence, Philip J. Morgan, and Neil Nick Robson

The recent announcements from Dubai have turned the spotlight onto Islamic investments. The attached client alert assesses the structure, enforceability, risks and valuation issues specifically associated with the Dubai Nakheel sukuk bond and the increased uncertainty regarding the legal structures and insolvency regimes underpinning Islamic investment structures in the region. Even though the Government of Abu Dhabi and the UAE Central Bank have recently bailed out the real estate development company Nakheel and its parent company, Dubai World, there is no guarantee that they will do so again in the future. As a result of these factors, investment managers should consider examining all their Islamic investments, particularly those connected to Dubai, and working with valuation firms to determine how to approach the valuation of such investments.

To view the complete alert online, click here.

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 By: Richard A. Kirby and R. James Mitchell

On December 9, 2009, almost one year to the day that Bernard L. Madoff was revealed to have perpetrated the largest Ponzi scheme in history, the SEC revealed its position with respect to the approach that it believes the Securities Investor Protection Corporation (“SIPC”) should take in defining the net equity of Madoff claimants.

The SIPC Trustee has previously taken the position that net equity for Madoff’s victims should be measured on a cash-in/cash-out basis, rather than using the stated values on account statements fabricated by Madoff. This measure of net equity rejects all claims filed by victims whose net withdrawals equaled or exceeded their principal investments.

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By: Daniel F. C. Crowley, Bruce J. Heiman, Karishma Shah Page, Collins R. Clark, Justin D. Holman

On December 11, the House of Representatives passed H.R. 4173, the “Wall Street Reform and Consumer Protection Act of 2009,” by a vote of 223 to 203. 27 Democrats voted against the bill and no Republicans voted in favor of the bill.

To view the complete alert online, click here.

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By: David L. Beam  

One of the most controversial subjects in banking law over the past decade has been federal preemption of state laws for federally-chartered banks (i.e., national banks and federal thrifts) and their operating subsidiaries. Under current law, regulations issued by the Office of the Comptroller of the Currency (“OCC”) and the Office of Thrift Supervision (“OTS”) preempt almost all state consumer protection laws for national banks and federal thrifts, respectively. When a federal law “preempts” a state law for an institution, it effectively exempts that institution from having to comply with the state law. This preemption has also been extended to operating subsidiaries of national banks and federal thrifts as well as (in certain situations) agents and other third parties acting on behalf of those institutions.

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By: Neal R. Brendel, Roberta D. Anderson

The recent announcement by the government of Dubai that it would be seeking a stand-still on debt repayments by Dubai World, and its subsidiary, Nakheel PJSC, has shaken the global financial markets and investment community. In the immediate wake of Dubai's announcement, creditors have begun to review their rights under UAE federal insolvency law and the law of other potentially applicable jurisdictions, as well as examining other available options for minimizing the financial impact of Dubai's credit crisis. This Alert is designed to assist companies by providing a general overview of the applicable insurance coverages that may cover such losses and discussing considerations for developing a plan to pursue potential insurance recovery.

To read the complete alert online, click here.

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