New U.S. court rulings may add to costs, risks of finance industry regulatory enforcement

By Stuart Gittleman

NEW YORK, June 26 (Thomson Reuters Accelus) – Two court rulings last week may raise the enforcement burden for the financial services industry and its regulators.

A Brooklyn federal judge suggested that for regulatory targets of the Securities and Exchange Commission, forcing the agency to take them to court could end up costing less than settling before litigation is begun, depending on legal fees and other considerations, because its ability to seek compensation in court is limited.And a Supreme Court ruling may make investigating potential violations more expensive and time-consuming for prosecutors and agency lawyers as well as criminal and regulatory defense counsel and may also cut the number of jury trials.

Dimon in the rough: Keeping regulators off of Wall Street

From: Christian Science Monitor

The main regulator of derivatives (bets on bets), wants to extend Dodd-Frank regulations to the foreign branches and subsidiaries of Wall Street banks. But JPMorgan CEO Jamie Dimon would greatly prefer this not happen.

By Robert Reich

The Commodity Futures Trading Commission, the main regular of derivatives (bets on bets), wants to extend Dodd-Frank regulations to the foreign branches and subsidiaries of Wall Street banks.

Horror of horrors, say the banks.

“If JPMorgan overseas operates under different rules than our foreign competitors,” warned Jamie Dimon, chair and CEO of JP Morgan, Wall Street would lose financial business to the banks of nations with fewer regulations, allowing “Deutsche Bank to make the better deal.”

Fed’s Tarullo: Shadow Banking Pathologies May Rebound

From: Market News International

By Denny Gulino

WASHINGTON (MNI) – Federal Reserve Gov. Daniel Tarullo Tuesday warned that money market funds, triparty repos and securities lending “all share a common underlying pathology,” the illusion that they are almost as risk free as cash, and regulation must address mispricing, run risk and potential moral hazard.

Speaking via satellite to a San Francisco Fed conference, Tarullo acknowledged that there are “ongoing disagreements concerning the roles of various factors contributing to the rapid growth of the shadow banking system, the precise dynamics of the runs in 2007 and 2008, and the relative social utility of some elements of this system.”

Sheila Bair to lead private financial risk council

* Bair left post as FDIC chairman last year

* Will lead Systemic Risk Council, private group

* Group will monitor reforms, work of FSOC

* Paul Volcker, Brooksley Born also part of group

WASHINGTON, June 6 (Reuters) – Sheila Bair, who helped steer the U.S. financial system through the recent credit crisis, is forming a new private-sector group called the Systemic Risk Council to try to accelerate reforms.

A former chairman of the Federal Deposit Insurance Corp, Bair will team up with former U.S. Federal Reserve Chairman Paul Volcker, former Commodity Futures Trading Commission Chairman Brooksley Born and other experts to advise current regulators about risks to financial markets.