Preferred and common shareholders of Freddie Mac and Fannie Mae have not recently received earnings distributions or dividends, and the prospects for the short-term future would seem to depend on a pending shareholder lawsuit. After bailing out the two entities with a $180 billion loan, the Federal government is, under a total net worth sweep, claiming all profits as its own. Chuck Cooper led a litigation update on this important case.
Trust and reputation are central to the operation of capital markets. But in our generation, reputational mechanisms are failing; and when they fail, markets and societies are also at risk of failure. The usual response has been to call for more aggressive regulation, yet this only worsens the problem, as Jonathan Macey shows in his new book. There, he demonstrates how and why poorly considered regulation has undermined traditional trust mechanisms throughout financial institutions, credit rating agencies, and accounting and law firms.
The Cato Institute
Is the antitrust enforcement authority of the Federal Trade Commission, proceeding under the FTC Act, broader than that of other litigants – whether private plaintiffs or the Department of Justice – proceeding under the Sherman Act? Section 5 of the FTC Act prohibits “unfair methods of competition in or affecting commerce” – language which some have interpreted as equivalent in scope with parallel provisions of the Sherman Act. As recent Supreme Court decisions have appeared to narrow the scope of the Sherman Act, however, the FTC has moved in the opposite direction. In addition to the Valassis and U-Haul “invitation to collude” cases (a cause of action not recognized under the Sherman Act), the FTC has pursued so-called “Sherman Act plus” antitrust actions against N-Data and Intel. Is this seeming divergence between FTC Act and Sherman Act enforcement authority legally defensible? What are its broader policy implications?
The Corporations, Securities & Antitrust Practice Group hosted this panel on "'New' Antitrust Enforcement Authority under the FTC Act" on Thursday, November 14, during the 2013 National Lawyers Convention.
Corporations: 'New' Antitrust Enforcement Authority under the FTC Act: Defensible Statutory Interpretation or Plumbing the Penumbras?
12:00 p.m. – 2:00 p.m.
Are some large firms, financial or otherwise, getting a free pass from prosecution because of their size and scope of operations? How about their responsible officers? Recent congressional hearings have raised concerns that this may indeed be the case. Is it ever appropriate for agencies and prosecutors to consider the size of a business when contemplating enforcement actions? Some would say that the prosecution of the accounting firm Arthur Andersen in 2002 (subsequently overturned by the Supreme Court) put the firm out of business, putting thousands of employees on the unemployment lines and further concentrating the accounting industry. Others contend that the problem with prosecuting large firms alone justifies limiting the size of firms. Is it enough for justice and deterrence sake to be able to take enforcement actions against culpable individuals without prosecuting the whole company?
On this previously held conference call, these and other questions are discussed by two people with direct experience with these issues. As a member of the Securities and Exchange Commission from July 2002 through August 2008, Paul Atkins had to face these questions from the enforcement side. Former Deputy White House Counsel Timothy Flanigan served as Senior Vice President and Deputy General Counsel for Tyco International after the leadership of the firm was subject to prosecution for alleged significant misdeeds. Flanigan is credited with a leading role in the efforts to restore the credibility of the firm, allowing it to continue as an ongoing enterprise.