On Friday, March 10, 2023, Signature Bank lost 20% of its deposits. (Vivian Giang & Mike Dang, The New York Times; Max Reyes, Bloomberg). Two days later, on Sunday, March 12, 2023, Signature Bank failed and went into receivership. (Vivian Giang & Mike Dang, The New York Times). Signature Bank’s failure was unexpected, so much so that it’s only the second time in over a decade that the Federal Deposit Insurance Corporation (“FDIC”) created a bridge bank in response to a bank failure. (Federal Deposit Insurance Corporation). How and why did Signature Bank fail so quickly? Are more U.S. Banks next? These answers and more, but first, it’s helpful to understand what happens immediately after a bank fails.
Read MoreA public company’s earnings per share (“EPS”) is one of the most used metrics for determining its profitability. (Jason Fernando, Investopedia). EPS is a formula that calculates a company’s profit by dividing its net income by its outstanding shares of stock. Id. A company’s goal is to meet or exceed its consensus EPS estimate, as this demonstrates a successful quarter and shows investors a reliable stock…
Read MoreCongress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) as a direct response to the 2008 Financial Crisis when millions of Americans lost homes due to foreclosure. (SEC). Among myriad findings, a final report on the 2008 Financial Crisis stated that investment transactions with conflicts of interest contributed to the crisis. (Financial Crisis Inquiry Commission). For example, the commission found that financial firms marketed an investment and profited off that investment product’s decline…
Read MoreAfter spending seven years as a proposal in limbo, the Securities and Exchange Commission ("SEC") adopted a "Pay Versus Performance" rule in August of 2022, finally meeting the statutory mandate set forth in the Dodd-Frank Act. (Candance Quinn, et. al., Bloomberg Law). As the rule’s name implies, SEC registrants must now disclose the interplay between their executive compensation actually paid and the company's financial performance. (PricewaterhouseCoopers). An additional requirement under the new rule has drawn scrutiny as it opens the door for Environmental Social Governance ("ESG") disclosures to be made…
Read MoreIn February 2016, Congress passed the bipartisan SEC Small Business Advocate Act of 2016 (the “Act”). The Act amended the Securities Exchange Act of 1934 to establish an independent Office of the Advocate for Small Business Capital Formation (the “Office”) within the Securities and Exchange Commission (“SEC”). (H.R. 3784). Officially established in 2019, the Office aims to assist and advance the interests of small businesses and their investors in securing access to capital and complying with SEC regulations…
Read MoreOn January 17th, the U.S. Department of Justice (“DOJ”) announced significant revisions to its Corporate Enforcement Policy, adding more incentives to companies that self-report corporate criminal misconduct. (Theodore Chung, JDSupra). The change marks the third major update to the policy since October 2021 as the Biden Administration tries to find the right balance between the hardline approach to white collar crime taken under the Obama Administration and the lax approach taken by the Trump Administration…
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