The most significant issue in this case was whether the interests purchased by the investors were in fact "securities" such that the case was within the SEC's jurisdiction at all. To make the case that the interests were in fact securities, the complaint stated repeatedly, "Neither Defendants nor the other investors were involved in managing or operating any of the wells or other oilfield facilities." (For law students, this is the rationale behind the famed Howey case, where it was…

While improving the transparency of the FSOC process would be a significant improvement on FSOC's operations to date, it would be better still to rethink (and to some extent junk) the discretionary designation process. The government should not have broad discretion to pick and choose on a subjective basis the firms that are to be subject to regulation. It should be easy enough to draft legislation that provided specifically for the regulation of large financial market utilities. Likewise,…

Mr. Cordray's resignation presents an opportunity to restructure the CFPB in a manner that is consistent (i) with the bipartisan structure of other agencies, and (ii) that gives Congress and the President authority over the agency, including budgetary authority.

The existing regulatory structure now gives President Trump the ability to appoint a new head of the CFPB to serve a five year term. Without a change in structure, the new appointee will serve regardless of whether the…

According to FDIC Chair Gruenberg, "[t]he fact that the credit rating agencies have lowered the credit ratings of the eight U.S. globally systemic banking organizations (G-SIBs) because of a reduced expectation of taxpayer support in the event of failure is a sign of progress." Suppose, instead, that the rating agencies had raised the credit rating of large U.S. banks. What conclusion should be drawn? The reality is that it is impossible to demonstrate with mathematical certainty either the…