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my transparency paper in american university business law review February 29, 2012

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Is here.

eesc opinion on how to involve civil society in financial regulation February 27, 2012

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The EESC announces that it is going to get more involved in discussions about financial regulation:

One of the difficulties in adopting rules in this field has been, and still is, how to ensure that differing and contradictory positions are given a balanced hearing within a pluralistic and democratic opinion-forming process. There is currently no effective counterweight from civil society organisations to the legitimate representation of the financial sector’s interests, and this asymmetry should be rectified in the new financial legislation.

And it urges the EU institutions and the Member States to act “to achieve wider involvement of civil society in the regulation of financial markets”.

tclp conference on the eu’s sovereign debt crisis February 23, 2012

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Tomorrow I will be in Iowa speaking at the TCLP conference on The European Sovereign Debt Crisis: A Critical Assessment of the Euro and EMU.

council agrees short selling regulation February 21, 2012

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The text is here.

seminar on the state of the eu – university of miami 24 february 2012 February 16, 2012

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The Miami-Florida European Union Center of Excellence, a consortium of Florida International University and the University of Miami and the UM Jean Monnet Chair, will co-host a seminar discussing the state of the European Union on Friday, February 24th at the UM School of Business, AGB 431 from 9 a.m. to 6 p.m. The event is co-sponsored by the Miller Center for Contemporary Judaic Studies, Center for Latin American Studies, American Jewish Committee, and Center of International Business Education & Research.

Political analysts and scholars will present the projected future of the European Union considering the Eurozone Crisis and the latest decisions of the EU Council that have opened the door to an unknown chapter of European history. With the EU presenting today a different face than decades ago and offering somewhat different challenges to be met, the seminar will focus on questions concerning: the state of the Union(s), the direction the EU is going to take, how the rest of the world understands regional integration, and the consequences and impact of the current EU crisis on international business.

The event is open to the public and to the press.

esma short selling consultation February 15, 2012

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The responses are in and you can see them here. A number of the responses comment on the very short time for consultation. Today there’s a new consultation on technical advice relating to the same regulation which closes on March 9. The Consultation document says:

Who should read this paper
This paper may be specifically of interest to investors that take short positions, hedge funds, investment
firms whose clients hold short positions or engage in CDS activity, securities lending firms, hedge funds,
prime brokers, custodians, settlement systems, national debt management agencies and issuers.

But they still only get just over 3 weeks to respond.

There will be an open hearing on 29 February 2012.

Meanwhile I have been working on a paper on transparency and financial regulation in the EU.

football (soccer) and the financial markets February 13, 2012

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A new ECB working paper by Michael Ehrmann and David-Jan Jansen with the title “The Pitch Rather Than The Pit: Investor Inattention During FIFA World Cup Matches”. Here’s the abstract:

At the 2010 FIFA World Cup in South Africa, many soccer matches were played during stock market trading hours, providing us with a natural experiment to analyze fluctuations in investor attention. Using minute‐by‐minute trading data for fifteen international stock exchanges, we present three key findings. First, when the national team was playing, the number of trades dropped by 45%, while volumes were 55% lower. Second, market activity was influenced by match events. For instance, a goal caused an additional drop in trading activity by 5%. The magnitude of this reduction resembles what is observed during lunchtime, and as such might not be indicative for shifts in attention. However, our third finding is that the comovement between national and global stock market returns decreased by over 20% during World Cup matches, whereas no comparable decoupling can be found during lunchtime. We conclude that stock markets were following developments on the soccer pitch rather than in the trading pit, leading to a changed price formation process.

english councils have no implied power to include prayers in formal meetings February 11, 2012

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Under s 111 of the Local Government Act 1972 local authorities have implied powers “to do any thing which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions.” Mr Justice Ouseley held that Bideford Town Council did not have the power to have prayers as a formal part of council meetings under this provision. The Council didn’t do itself any favours here by arguing at the same time that the prayers were important and that Councillors who did not wish to participate would not be required to do so:

There is a contradiction at the heart of the Council’s position. It has made the prayers part of the formal business of the Council, yet it says that Councillors, summoned to its meetings, are not obliged to be present for this incident to the transaction of business nor to participate in it. I do not think that what falls within the scope of s111, as an incident to the transaction of the business of the meeting, can then be regarded as such that attendance for it is unnecessary or optional, in distinction from all other business. In effect it is treated as being outside the scope of the meeting. I do not see that it can be calculated to facilitate the transaction of business or any other functions if, for it to take place at all, it is necessary to give Councillors the choice not to attend. Nor can it be conducive to the transaction of business or to the exercise of any functions, if it does not matter if Councillors attend or not. If the Council does not regard it as business for which attendance is summoned, then it should not be on the agenda. If it regards it as business to which the summons applies, it cannot make attendance for it optional on the grounds that participation could be objectionable to some Councillors. No such arrangement would be necessary for a few minutes silent reflection.

The judge said that if the council had had the power to hold prayers during council meetings the way in which it had been managing the practice did not infringe the complaining Councillor’s human rights or unlawfully discriminate indirectly against him on the grounds of his lack of religious belief.

The Guardian says:

Lord Carey, former archbishop of Canterbury, said the judgment could have “incredibly far-reaching consequences”. “Will the next step be scrapping the prayers which mark the start of each day in parliament?” he asked.

This seems to me to be both wrong and unnecessarily inflamatory. It ignores the narrow basis on which the decision rests. This interpretation of the Local Government Act has nothing to do with the powers of Parliament, which is a sovereign authority in a way that local authorities are not. So here, the fact that the judge thought the Council’s practice did not violate human rights or constitute unlawful discrimination seems to be what is significant.

greek doctors are “foreign government officials” February 6, 2012

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According to the SEC which charged Smith & Nephew PLC with violations of the FCPA (Smith and Nephew settled):

The SEC’s complaint against Smith & Nephew PLC alleges that its subsidiaries used a distributor to create a slush fund to make illicit payments to public doctors employed by government hospitals or agencies in Greece. On paper, it appeared as though Smith & Nephew’s subsidiaries were paying for marketing services, but no services were actually performed. The scheme basically created off-shore funds that were not subject to Greek taxes to pay bribes to public doctors to purchase Smith & Nephew products.

Last year the Central District of California held that:

a state-owned corporation having the attributes of CFE may be an instrumentality”of a foreign government within the meaning of the FCPA, and officers of such a state-owned corporation, as Messrs. Nestor Moreno and Arturo Hernandez are alleged to be, may therefore be “foreign officials”within the meaning of the FCPA

But even if this is a correct interpretation of the FCPA, isn’t there a real difference between officers of a government owned corporation and doctors in a hospital? Are the doctors “officials” in any real sense?