The Latest Sneaky Attempt to Increase Corporate Political Power

by JOHN LIGHT – Three riders deep inside the House appropriations bill would bar federal agencies from enforcing campaign finance laws. “If you want to do something evil, put it inside something boring,” John Oliver said in 2014 of the tireless efforts of telecomm monopolists to get rid of net neutrality. It’s a tried and true strategy of the wealthy and their legislative allies, and, while Donald Trump’s destructive antics continue to hold America’s attention with the same unyielding grip he uses on foreign dignitaries’ hands, there are a lot of boring things ambling through Congress with corporate favors crammed deep inside. And so it is with the House’s appropriations bill, which includes riders that would further pare back campaign finance rules that have already been decimated over the last decade, in large part through Supreme Court decisions such as Citizens United and McCutcheon v. FEC. These rulings and a Congress hell-bent on deregulating the campaign...

Read More...


SEC Launches Yahoo Investigation Over Improper Handling of Cyberattacks

by Lauren C. Williams – The agency is looking into whether the tech company waited too long to tell investors of the breaches. After unveiling a newer, smaller corporate identity following the sale of most of its holdings to Verizon, Yahoo is facing a federal probe for how it handled its massive data breaches, the Wall Street Journal reported. The Securities and Exchange Commission (SEC) is investigating Yahoo to determine whether the company kept investors in the dark regarding its two mega-breaches that exposed more than a billion consumers’ data in two major breaches since 2013. Yahoo previously mentioned it was cooperating with international, state, and federal agencies regarding the 2014 breach, including the Federal Trade Commission and SEC, the Journal reported. The investigation will likely focus on the 2014 hack, which wasn’t publicly disclosed for two years. Even in the face of mounting criticism, Yahoo hasn’t given any reason for...

Read More...


SEC Charges Ken Paxton With Securities Fraud

by Patrick Svitek and Morgan Smith, The Texas Tribune – Texas Attorney General Ken Paxton has been charged in federal court with allegedly misleading investors in a technology company. The U.S. Securities and Exchange Commission filed the charges Monday in a Sherman-based court. They are similar to the allegations Paxton faces in a pending indictment handed up by a Collin County grand jury last year. (Read more about Ken Paxton’s legal battles here.) Paxton is named in the SEC’s complaint along with William Mapp, the founder and former CEO of Servergy Inc. Paxton is accused of raising hundreds of thousands of dollars for Servergy without disclosing he was making a commission. The case stems from when Paxton was a member of the Texas House — before he was elected attorney general in 2014. “People recruiting investors have a legal obligation to disclose any compensation they are receiving to promote a stock, and...

Read More...


Finally! SEC Votes to Disclose Exorbitant CEO-Worker Pay Ratio

by Lauren McCauley – “We finally have an official yardstick for measuring CEO greed,” said Institute for Policy Studies analyst Sarah Anderson In a move supporters are cheering as a victory for workers—and filing under the “better late than never” category on the part of the government—the Securities and Exchange Commission on Wednesday voted to adopt new rules requiring a public company to disclose the pay ratio between its CEO and employees. Advocates say the disclosure rule, which is required under Section 953(b) of the 2010 Dodd-Frank Act, is commonsense and hope it will provide some relief to the gross economic inequality in the American workplace. “We finally have an official yardstick for measuring CEO greed,” said Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies (IPS). “This is a huge victory for ordinary Americans who are fed up with a CEO pay system that rewards...

Read More...


Warren Blasts Top Wall Street Cop for ‘Broken Promises’ and Lax Regulation

by Deirdre Fulton – “I am disappointed you have not been the strong leader that many hoped for—and that you promised to be,” Massachusetts senator tells SEC chief In a letter described by news outlets as “scathing” and “unusually blunt,” Sen. Elizabeth Warren (D-Mass.) on Tuesday slammed the country’s top Wall Street regulator for broken promises and lax regulation of the financial industry. In a 13-page letter, Warren described the two-year tenure of Securities and Exchange Commission (SEC) chairwoman Mary Jo White as “extremely disappointing.” From failing to require companies to admit wrongdoing when the agency finds they violate the law to failing to implement Dodd-Frank rules on CEO pay disclosure, White has not been the “tough watchdog” the SEC needs, Warren said. Warren also criticized the ongoing use of “waivers,” which allow such companies to skirt SEC review, among financial firms that break the law, as well as White’s failure...

Read More...


GOP Seeks to Further Weaken Campaign Finance Laws

Experts say latest challenge could further erode contribution limits by Deirdre Fulton – Republican lawmakers hoping to rake in more campaign cash from Wall Street are challenging a U.S. Securities and Exchange Commission rule that limits the amount of money financiers can give to governors and state officials. Last week, the state Republican committees of New York and Tennessee filed a lawsuit aimed at repealing a Securities and Exchange Commission (SEC) rule that limits the campaign contributions that can be made by investment advisers on Wall Street to political candidates. The rule is designed to prevent Wall Street from using campaign donations as a form of bribery against state officials who rely on these financial institutions to manage their investments. Observers predict this could be the Supreme Court’s next big campaign finance case. A lawyer for the plaintiffs said this year’s McCutcheon decision — which struck down the aggregate limit on...

Read More...


Credit Rating Industry Dodges Reforms, Despite Role in Financial Meltdown

Flaws in bond rating system that led to financial collapse remain By Alison Fitzgerald, Center for Public Integrity– The California Public Employee Retirement System requires that bonds it holds be rated by one of the top three credit raters even after it sued those companies for issuing “untrue, inaccurate and unjustifiably high credit ratings.” “These credit ratings were false at the time they were initially assigned, and continued to be false during the existence of the” investments, Calpers, the nation’s biggest pension fund, claims in its 2009 lawsuit against Moody’s Corp., Fitch Inc. and the parent company of Standard and Poor’s. The state pension fund says the bad ratings cost it as much as $1 billion. That Calpers still depends on S&P, Moody’s and Fitch to rate its investments shows how much power these companies continue to wield in the global financial industry even after several investigations concluded their AAA ratings on mortgage bonds and other complex investments helped lead directly to the 2008 financial collapse. Calpers...

Read More...


CEO Performance Pay is Bad for Everyone Except CEOs

Compensation soars while workers and taxpayers feel the squeeze By Richard Kirsch Americans hate the fact that CEOs of big corporations keep raking in millions while the incomes of most American households are sinking. Now a new Roosevelt Institute white paper by University of Massachusetts economist William Lazonick adds to the growing case that soaring CEO pay is not just unfair, but harmful. It’s bad for businesses, workers, and taxpayers, and it’s one of the reasons that the economy remains sluggish. Lazonick details the myriad ways that CEOs pump up their wages, painting a picture of crony capitalism in the board room and at the SEC. CEOs pad their boards of directors with other CEOs, who are all eager to hike each other’s pay. They hire from the same pool of compensation consultants, who then recommend to all of their boards why each of them deserves to be paid more. Almost all executive pay,...

Read More...


Ex CEO and CFO of Arthrocare Corporation Convicted in $400 Million Securities Fraud Scheme

A federal jury this week convicted the former chief executive officer and the former chief financial officer of ArthroCare Corporation, a publicly traded medical device company based in Austin, Texas, for orchestrating a fraud scheme that resulted in shareholder losses of over $400 million. After a four-week trial, a jury in the Western District of Texas found the former CEO, Michael Baker, 55, guilty of conspiracy to commit wire and securities fraud, wire fraud, securities fraud and false statements.   Michael Gluk, 56, the former CFO, was found guilty of conspiracy to commit wire and securities fraud, wire fraud and securities fraud.   Baker and Gluk were charged in a superseding indictment returned on April 1, 2014. Evidence at trial demonstrated that Baker and Gluk, along with their co-conspirators, masterminded and executed a scheme to artificially inflate sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors beginning in 2005...

Read More...