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

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.

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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.

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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.

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By: David H. Jones and Andrew V. Petersen

It was no ordinary day. On 25 November 2009, the Dubai government announced through its Supreme Fiscal Committee (SFC) that its Dubai Financial Support Fund (DFSF) would spearhead the restructuring of Dubai World’s financial obligations. The resulting tsunami sent shockwaves through the world markets, as it raised doubts over the Gulf Emirate's ability to meet its financial obligations. Investors with interests in Dubai and its debt market were exposed. Or were they?

As the dust settled, it became clear that Dubai World was seeking to restructure just $26 billion (€17bn, £16bn) out of a total debt of $60 billion.  As a first step in the restructuring process, Dubai World and its subsidiaries, Nakheel PJSC (“Nakheel”) and Limitless LLC (“Limitless”), the real estate developer and investor famous for projects such as the spectacular Palm Jumeirah, requested their creditors agree to a “standstill” on repayments and an extension of a near-term maturity until at least 30 May 2010. The most urgent problem facing Dubai World is a $3.52 billion sukuk (the world’s biggest), an Islamic financial instrument, issued by Nakheel, and maturing on 14 December 2009 along with its two other outstanding sukuk, with a par value of $1.75 billion. To complicate matters further, the sukuk is guaranteed by Dubai World. With this requested restructuring, the legal system of the United Arab Emirates ("UAE") faced an unprecedented test. This Alert provides an overview of what this development means to those with exposure to Dubai World and Nakheel debt, by examining the applicable Islamic financing concepts and the regional legal uncertainty, the question of what creditors should do as well as outlining possible implications for investors and buyers interested in taking advantage of the opportunities that may arise.

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By: Paul de Cordova, Jeffrey N. Rich, Tony Griffiths, Dr. Sabine Konrad  

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 sent shock waves around the globe and raises questions regarding the rights of creditors in the UAE.  This Alert highlights some key features of UAE federal insolvency law which may be relevant to those who have dealings with debtors in the UAE.

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Matt T. Morley, Richard A. Kirby, and Andrew Edwin Porter

The Obama Administration has recently announced the formation of a task force designed to coordinate federal, state and local efforts to investigate and prosecute fraud and other financial misconduct. The Financial Fraud Enforcement Task Force (FFETF) expands and supplants an earlier task force created to combat corporate fraud in the wake of the Enron scandal.

While the simple reconstitution of a task force is unlikely to dramatically alter the law enforcement landscape, this development may be one part of a more sweeping set of changes that could result in considerable increases in the magnitude, focus and efficiency of efforts to pursue financial wrongdoing. 

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

On December 2, the House Financial Services Committee passed final bills comprising the House version of the financial regulatory reform legislation. House Floor consideration is expected as early as the week of December 7. The Senate Banking Committee is also expected to begin marking up the discussion draft of the “Restoring American Financial Stability Act of 2009” the week of December 7.

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