This case communicates that the SEC will award an "outsider," for providing original information (here, presumably for analyzing market data) that leads to a successful enforcement action, rather than awarding only a corporate insider. It's an award about which we may feel better than (in the worst case) one that was given to a company insider who did not attempt to correct the problem internally but went directly to the government in the hopes of collecting reward money.

The Bylaw 1101 regime that requires every NFA member to police every other firm is wasteful, particularly since it must be repeated every year. The burden to comply with the law should be on each firm. The government should police that compliance. At a minimum, an NFA member should be considered to have satisfied its Bylaw 1101 compliance when it takes on a new customer. It should not have to conduct an annual update as well.

Essentially, the ICI's response to the SEC may be summarized as follows: like the concept; hate the implementation (as in really, really, really hate it!). Notwithstanding its "strong endorsement" of the concept, the ICI characterizes the actual requirements as "encumbered," "a setback," "misguided," proposing a classification scheme that is "not a recognized or sound . . . practice," providing a "misleading picture," imposing "enormous operational burdens," introducing "new risks…

It would be helpful if the OFR explained how it picks the categories of financial risk that it elects to investigate. While it might be true that the selected securities activities pose a material risk to the economy, they certainly are not the activities that pose the greatest risk. Here are a few examples that might pose greater risk to the economy: the near insolvency of Puerto Rico, as well as the insolvency of a number of cities like Detroit, indicates that municipal bankruptcy is…