In a blog post titled "The Fifth Year of the Frankendodd Life Sentence," University of Houston finance professor Craig Pirrong discussed certain limitations of the Dodd-Frank Act. Mr. Pirrong stated that "the systemic risk effects of the mandate are at best a push," and that, at their worst, the effects are negative. He also pointed out that the source of systemic risk derives from the huge liquidity strain that clearing creates when the market is stressed. Mr. Pirrong asserted that while the Dodd-Frank Act was intended to reduce concentration and interconnectedness in the financial system

The House Financial Services Subcommittee on Monetary Policy and Trade reviewed legislative proposals that were intended to bring "greater accountability and transparency to the Federal Reserve." Witnesses asserted that: (i) history shows that when the Federal Reserve System (the "Fed") follows a rules-based approach to monetary policy, the economy performs better; (ii) requiring the Fed to explain the differences between a reference rule and its chosen monetary policy instead of constraining the Fed's policy choices would increase transparency; (iii) the Federal Reserve has continued to

The Senate Banking Subcommittee on Securities, Insurance and Investment held a hearing to discuss oversight of the FSOC process for designating firms as systemically significant. According to the Delta Strategy summary linked below, FSOC Deputy Assistant Secretary Patrick Pinschmidt said that (i) FSOC is still considering entity and activity-based designations for asset management firms and (ii) insurance company designations are based on a firm's size and interconnectedness, and on operations that are not considered "plain vanilla" insurance activities. Lofchie Comment: FSOC continues to

SEC Commissioner Daniel Gallagher criticized the Department of Labor's proposed definition of "fiduciary" (the "Fiduciary Proposal") as well as conflict of interest requirements for retirement investment advice and related proposed exemptions and amendments. The Commissioner asserted that the Fiduciary Proposal "is grounded in the misguided notion that charging fees based on the amount of assets under management is superior in every respect and for every investor to charging commission-based fees". He predicted that "the rule, when finalized, will harm investors and U.S. capital markets." He

The CFTC entered an Order against a Florida attorney for violating the Commodity Exchange Act ("CEA") in connection with aiding and abetting multiple clients in an operation of illegal and fraudulent precious metal schemes. The Order requires Florida defendant to pay a $150,000 civil monetary penalty and restitution of $733,000. The defendant is also not to appear or practice as an attorney before the CFTC until he has been reinstated by the Order. See: CFTC Press Release.