Federal Reserve Chairman Bernanke testified on July 17 before the Senate Banking Committee that (i) the "U.S. economy has continued to recover, but economic activity appears to have decelerated," (ii) for which he blamed a number of factors including conditions in Europe, "fiscal policy and fiscal uncertainty." In his printed testimony, he footnoted to a report that warned of the negative effects on the economy of an increase in tax rates and a sequestration of federal money. See Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013. View testimony in full here

The margin requirements for Credit Default Swaps are summarized in The Guide to Broker-Dealer Regulation, Margin Chapter. This proposal would extend the current regime under FINRA Rule 4240 (although that is of limited significance as firms do not ordinarily book CDS into registered broker-dealers and this will all eventually be redone when the SEC's rules implementing Dodd-Frank come into effect. View release in full here (links externally to FINRA website).

An SEC investigation found brothers Jeffery A. Wolfson and Robert A. Wolfson made illegal naked short sales from July 2006 to July 2007. SEC rules require short sellers to locate shares to borrow before selling them short, and they must purchase securities to close out their failures to deliver by a specified date, both of which the brothers failed to do. The brothers have settled, without admitting or denying the findings, agreeing to pay $14.5 million, which includes the $9.5 million in profits from the naked short sales and additional fines and penalties. For a discussion of short selling

SIFMA released a legal memo addressing the legal problems of using eminent domain to acquire mortgage loans. The proposal to use eminent domain for this purpose is under consideration by the County of San Bernardino in California. View release in full here(links externally to SIFMA website).

Several high ranking officials from the OCC testified before a U.S. Senate subcommittee about compliance of the Bank Secrecy Act (BSA) and anti-money laundering (AML) specifically in regards to HSBC North America Holding Inc. The OCC representatives agreed with the subcommittee findings that the OCC should tighten its supervision and agreed to incorporate three recommendation of the subcommittee. The OCC members testified that from 2004-2009 the OCC send HSBC several letters expressing concerns as to HSBC's compliance with BSA/AML, which HSBC did not address. In 2010, OCC expanded its