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Matt Levine

SEC Waivers and Suspicious Laughter

Also speculative models for activist defense and traders whispering to their mistresses.


As you may have heard, this week UBS, Barclays, Citigroup, JPMorgan and Royal Bank of Scotland entered guilty pleas for crimes relating to foreign-exchange manipulation. As you may also have heard, the banks previously spent some time going around to regulators to make sure that the supposedly automatic regulatory consequences of a criminal conviction would not apply to them. One of those regulators was the Securities and Exchange Commission, which granted an assortment of waivers, including letting some or all of the banks remain "well-known seasoned issuers," retain a safe harbor for forward-looking statements, and avoid disqualification under Rule 506 for doing private placements. Commissioner Kara Stein is a regular dissenter from these waivers, and here is her dissent yesterday. She points out: