An insider trading trial could dramatically expand the powers of America's securities regulator to monitor the derivatives blamed for exacerbating the financial crisis.
The Securities and Exchange Commission will bring its first prosecution tomorrow for insider trading which involved credit default swaps (CDS). Attorneys described the prosecution as an attempt by the commission to assert its authority over CDSs at a time when Congress is discussing how to regulate the huge derivatives market.
Stanley Keller, a partner at the law firm Edwards Angell Palmer & Dodge, said: “It’s a very interesting and important case because it really covers the whole issue of the scope of the SEC’s enforcement authority.”
The commission has accused Jon-Paul Rorech, a bond and credit default swap salesman at Deutsche Bank, of giving Renato Negrin, a former portfolio manager at the hedge fund manager Millennium Partners, inside information on an upcoming bond issue by VNU, the Dutch media company. They allege that the information handed Mr Negrin’s fund a €950,000 profit...
Christine Seib writes in The Times.
H/T: Credit Risk Chronicles.
Finance Focus
Credit Risk Chronicles
With over 9,000 entries, the Dictionary of Accounting and Finance covers a huge
range of terms and acronyms specifically relating to finance and accounting,
as well as more general business and commercial terms.