Lawmakers Urged to Create Privacy Rules for Social Networking Sites

Activist groups are waging what amounts to an undeclared war against the social-networking site Facebook for the last year in efforts to protect user privacy.

Actions by the groups include no fewer than three letters to federal regulators claiming Facebook’s actions are illegal.

Most, if not all, of the groups on the call have been lobbying for new government rules targeting social-networking sites.

The FTC is considering such rules, with an announcement expected late this year, and related legislation is being drafted in the House of Representatives.

Goldman Sachs seeks reduction in charges

According to a Wall Street Journal report, officials with Goldman Sachs are trying to negotiate a lesser charge from the federal government over the civil lawsuit in leveled against the firm last month.

The lawsuit charges Wall Street’s most influential investment firm with fraud.

But Goldman Sachs officials have reportedly met with the Securities and Exchange Commission at least once since the charges were filed to discuss a lesser penalty.

Goldman Sachs is one of several major firms that is accused of deceiving investors on the value of auction-rate securities, which it over-valued when sold to investors. Goldman Sachs is also accused of having a financial relationship with another firm that was betting on those securities to fail.

FINRA Lists New Antifraud Measures at Annual Conference

The Financial Industry Regulatory Authority listed a host of new measures to fight investor fraud at its annual conference.

The regulatory body is casting a wider net when examining firms, working more closely with states and other watchdogs, and focusing its attention on the riskiest activities.

FINRA will gather more information about a firm’s affiliates and subsidiaries, as well as identify potential conflicts of interest.

FINRA also will examine links between brokers and various feeder funds.

In addition, FINRA will be taking a harder look at companies’ statements and taking steps to verify them.

Companies offering credit required to develop ID theft prevention plan

Starting this summer, any company which extends credit to a customer must develop a plan to spot fraud and ways to prevent it.

As one measure to combat identity theft – the most reported fraud crime in the U.S., and the one being reported more and more each year – the Federal Trade Commission has enacted a new rule that requires any company offering credit or services rendered prior to payment received should develop a plan to prevent ID theft.

The rule applies to any institution large or small, from banks to a doctor that offers a service and expects payment at a later date. Trends have shown that those looking to commit identity theft prey on these companies.

A company like a department store which offers lines of credit to customers should develop a plan that includes “red flags” that a customer could be a thief. These thieves could eventually steal fellow customers’ account numbers or open phony credit accounts.

Companies are expected to develop an identity theft prevention plan by June 1. Regulators have reserved themselves the right to sue and fine any company that doesn’t display a written privacy and ID theft prevention policy.

Goldman Sachs’ Head Has Regrets

Goldman Sachs’ chief executive says he regretted having participated in transactions that brought too much leverage into the world according to a recent interview.

Goldman has been charged with fraud by the SEC over the design and marketing of a subprime mortgage securities product.

CEO Lloyd Blankfein said as a leader he held himself accountable for the positives and negatives.

The U.S. Senate has approved a sweeping Wall Street reform bill, capping months of wrangling over the biggest overhaul of financial regulation since the 1930s.

Senate approves financial regulation overhaul

The U.S. Senate has approved a milestone measure seeking to overhaul the failed financial regulatory system.

Along with empowering the Federal Reserve to watch the public markets for signs of fraud, and to act upon those suspicions, the bill would also create the Bureau of Consumer Financial Protection, which would oversee the consumer credit options.

Massive Wall St. fraud has left millions of investors recalculating their futures, or in the worst cases, digging their way from a massive debt. The fraud has some CEOs in prison and others on their way.

Americans were asked to take federal money to save some of the largest investment firms like American International Group from total collapse, on fears their failures would trigger an even larger economic fallout.

Failures to protect consumers from predatory lenders allowed these companies to find unqualified borrowers and put them into products they couldn’t afford, like new homes and other costly loans.

President Barack Obama is supporting the Senate bill, which now must be combined with a previously-passed House version. The two chambers will then vote on the revised bill and send it to Obama for his signature.

One significant difference between the bills is the creation of that new agency. The House bill makes that an independent regulator while the Senate version branches it under the Federal Reserve.

Specter’s amendment targets “secondary” actors in investment fraud

A proposed amendment to the ongoing debate over a Senate bill that would overhaul the financial regulatory industry targets “secondary actors” to securities and investment fraud.

According to Supreme Court precedent, these so-called “secondary” actors are immune from private lawsuits, and can only see legal action against them from the Securities and Exchange Commission. These people are typically lawyers, accountants, investment bankers and others who advise public companies trading securities and the like.

Shareholders have filed lawsuits against these companies, seeking to regain some of the billions lost in bad investments made by some of the most well-known Wall St. investment firms to smaller-scale investment companies.

In a proposed amendment to a massive overhaul of the financial regulatory system, Pa. Sen. Arlen Specter wants these secondary actors held more accountable for their part in larger frauds. The bill is known as the Restoring American Financial Stability Act, and is currently being debated in the Senate.

Those industries and interests against this bill as a whole, are vehemently opposed to the Specter amendment, saying it will bog down these players in the investment markets with costly litigation.

Supporters of Specter’s charge feel it’s another way to hold more accountable for the fraud which bilked thousands of people from investments they thought were sound. The bill is also seen as a way to deter future fraud acts.

Morgan Stanley Probed in Mortgage Deals

Federal prosecutors are looking into whether Morgan Stanley misled investors about mortgage-derivatives deals it helped design and sometimes bet against.

Morgan Stanley arranged and marketed pools of bond-related investments known as collateralized debt obligations.

Some traders say Morgan Stanley’s trading desk sometimes placed bets that the value of these CDOs would fall.

Investigators are examining whether Morgan Stanley made proper representations about its roles.

Morgan Stanley Probed in Mortgage Deals

Federal prosecutors are looking into whether Morgan Stanley misled investors about mortgage-derivatives deals it helped design and sometimes bet against.

Morgan Stanley arranged and marketed pools of bond-related investments known as collateralized debt obligations.

Some traders say Morgan Stanley’s trading desk sometimes placed bets that the value of these CDOs would fall.

Investigators are examining whether Morgan Stanley made proper representations about its roles.

Shareholder Lawsuits Filed Against J&J Over Drug Recalls

Three shareholder lawsuits have been filed against Johnson & Johnson officials in recent weeks, alleging they breached their fiduciary duties in their handling of recent recalls.

There are also allegations that the company paid illegal kickbacks.

The FDA has said raw materials used to make over-the-counter children’s and infants’ liquid products, such as Tylenol and Motrin brand pain relievers, were contaminated.

Earlier this year, J&J was accused of paying kickbacks to Omnicare Inc, a provider of pharmacy services to nursing homes, to induce it to recommend use of J&J drugs.

J&J has denied wrongdoing in that case.