On October 10, Vice Chancellor J. Travis Laster of the Delaware Chancery Court issued an opinion ordering RBC Capital Markets LLC (“the Bank”) to pay USD $75.8 million of a $91.3 million damages award to a class of former Rural/Metro Corp. shareholders. The damages opinion was preceded by the court’s finding in March that the Bank, along with Rural/Metro’s directors, and their other financial advisor Moelis & Co. LLC, were liable for breaches of their respective duties in connection with the sale of the company to Warburg Pincus LLC. The Bank was found to have deliberately undervalued the company, advising the board to accept Warburg’s offer, without disclosing that it was simultaneously seeking to finance Warburg’s takeover. Continue reading
USA: Delaware Chancery Court finds bank’s “unclean hands” bar contribution from co-defendants, orders payment of $76 million damages
On 7 October 2014, the Hong Kong Market Misconduct Tribunal (MMT) made “cold shoulder orders” and “cease and desist orders” against New York-based asset management company, Tiger Asia Management LLC (Tiger Asia) and Bill Hwang Sung Kook (Mr Hwang), pursuant to s.257(1)(b) and (c) of the Securities and Futures Ordinance (SFO). The effect of the orders is that both Tiger Asia and Mr Hwang have been banned from the date of the order from dealing in any securities in Hong Kong for 4 years (5 years being the maximum period that the MMT may order) and are bound not to engage in any form of market misconduct in the future.
The MMT’s report considers, inter alia, the nature and purpose of “wall crossing” which the MMT considers to be an important tool in ensuring the efficient operation of financial markets and one built on trust. Continue reading
As has been widely reported, the European Banking Authority has stated that many role-based allowances should now be treated as variable remuneration, which will result in many banks being in breach of the “bankers’ bonus cap”. Continue reading
Hong Kong regulators issue guidance for the protection of customer data in the financial services industry
The Office of the Privacy Commissioner for Personal Data (the PCPD) and the Hong Kong Monetary Authority (the HKMA) have recently published guidance notes regarding the obligations of financial institutions and, in the case of the HKMA, Authorised Institutions, to protect their customers’ data.
The HKMA has indicated that it expects Authorised Institutions to complete a critical review of the adequacy of their existing controls for protection of customer data by the end of the first quarter of 2015. Continue reading
Herbert Smith Freehills officially launched its new legal guide to “Financial Services Regulation in Asia Pacific” on 9 October 2014 in Hong Kong and in Sydney on 13 October 2014.
The guide, which covers 14 jurisdictions in the Asia Pacific region, has been compiled by our network of Herbert Smith Freehills regulatory specialists and local counsel, led by Will Hallatt and Valerie Tao, and including: Continue reading
Welcome to the October 2014 edition of our corporate crime update – our round-up of developments in relation to corruption, money laundering, fraud, sanctions and related matters. Our update now covers a number of jurisdictions. For the full update on each jurisdiction, please click on the name of the jurisdiction below. Below we provide a brief overview of what is covered in each update. Continue reading
EU: ECON vote in favour of Lord Hill as EU Commissioner for Financial stability, Financial Services and Capital Markets Union
After a second confirmation hearing on Tuesday, Lord Hill’s membership of the College of Commissioners was approved by 45 votes to 13, and by 42 votes to 16 in the vote for the Financial Stability, Financial Services and Capital Markets Union portfolio, in a vote by the Economic and Monetary Affairs Committee (ECON) of the European Parliament (EP). Continue reading
The Bank of England’s Financial Policy Committee (FPC) has recommended that HM Treasury should exercise its statutory power to prescribe two new macro-prudential measures, thereby granting the FPC powers of direction in the residential mortgage market, covering both owner-occupied and buy-to-let lending, to guard against financial stability risks from the housing market, before the end of this Parliament. Continue reading
US Federal Appeals Court limits extraterritorial application of anti-fraud provisions of US Federal commodities laws
The US Court of Appeals for the Second Circuit upheld a lower-court’s decision to dismiss a private civil action brought under the anti-fraud provisions of the U.S. Commodities Exchange Act (“CEA”), 7 U.S.C. § 1, et seq., by an investor against an international financial services organization, based in New York (that managed investment programs focused on commodity futures and real estate), several of its affiliates who were registered participants in the U.S. commodities markets, and two of its principals. Continue reading