Loans secured by stock are an important and popular product offered by many lenders to individuals and other borrowers, according to a post on the website of Loeb & Loeb LLP.

“The ability of a lender to sell the stock held as collateral is very much dependent on the documentation governing the loan. When and to what extent a lender may realize upon (or liquidate) the stock to repay the indebtedness under the loan should be carefully and clearly set forth in the loan documents,” write Bryan G. Petkanics and Anthony Pirraglia. “A recent federal court case analyzed the ability of a lender to act upon stock pledged to secure a loan, and provides insight into valuable language to be included in the loan documentation.”

They discuss Kinzel v. Merrill Lynch, in which the Sixth Circuit affirmed the judgment of the district court in favor of Merrill Lynch, finding that the financial services company breached neither the contract nor its duty of good faith under the terms of the loan management account agreement.

Read the article.

Practical Law and Norton Rose will present a webinar titled “Liability of Compliance Officers at Financial Institutions” on Wednesday, May 3, 2017, beginning at 1 p.m. EDT.

CLE credit is available in multiple states.

In recent years, U.S. securities regulators have increasingly focused on the regulated entities’ compliance personnel, holding many individually liable for the deficiencies in their firm’s handling of its compliance obligations, the company says on its website. The regulators deem compliance officers the gate keepers whose efforts should detect and prevent securities laws violations at the firm.

The free 75-minute webinar that will discuss recent trends and issues in this field. The webinar presenters will discuss several topics, including:

• Different approaches US securities regulators use in assessing individual liability of compliance personnel.
• Recent cases against individual compliance officers by various regulators.
• Best practices for minimizing the risk of a regulatory action or sanctions against compliance professionals at a broker-dealer or investment advisor.

A short Q&A session will follow.

Presenters:

Kevin James Harnisch, Partner, Norton Rose Fulbright US LLP

Ilana Beth Sinkin, Associate, Norton Rose Fulbright US LLP

Vlad Pavlovic, Senior Legal Editor, Practical Law Litigation (Moderator)

Register for the webinar.

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Reuters is reporting that a U.S. Justice Department probe into a phony accounts scandal at Wells Fargo & Co. is asking whether executives hid details from the company board and regulators as the problem grew over years, sources familiar with the review said.

Patrick Rucker reports that the move could result in criminal charges against bank employees involved.

“Officials are seeking to find out if executives shared everything they knew about the phony accounts to the Wells Fargo board of directors and the Office of the Comptroller of the Currency, the lead regulator for national banks,” Rucker reports. “Even if executives are not charged with criminal misconduct, they could face civil penalties including fines or a ban from the banking industry. Wells has already fired some executives and clawed back portions of their pay.”

Read the Reuters article.

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U.S. President Donald Trump was set on Friday to fire the opening salvo in his campaign to scale back major regulations that resulted from the financial crisis, directing a review of the Dodd-Frank Act and putting the brakes on a retirement advice rule, Reuters is reporting.

“The executive order Trump will sign on the 2010 Dodd-Frank law on Wall Street reform will be a first step towards rolling back the regulations that Trump sees as hurting the economy, but without rewriting the legislation, which can be done only through Congress,” write Ayesha Rascoe and Sarah N. Lynch. One prominent measure is the ‘Volcker rule’ that greatly restricts how banks can make bets with their own money.”

At a recent meeting with business owners, Trump described the law as “a disaster,” the reporters write.

Read the Reuters article.

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