Dodd-Frank, the Senate, and the Executive Order – Part I

Early last Friday morning, using an unusual legislative procedure, the Senate voted to repeal a law that was part of Dodd-Frank. Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Act directed the Securities and Exchange Commission to issue rules requiring public companies (issuers) to include in their annual reports information regarding payments by that issuer to a foreign government, or the federal government, for the purpose of the commercial development of oil, natural gas, or minerals. This provision was only tangentially related to the heart of Dodd-Frank reforms. The purpose of this Dodd-Frank provision was to increase transparency, prevent corruption, and allow governments, across the globe, to be held publically accountable. In August, 2012 the SEC, as required, adopted Rule 13q-1, which immediately ran into hurdles.

In October 2012, a number of industry groups, including the American Petroleum Institute, filed suit against the SEC and a district court vacated Rule 13q-1, in part, finding that the exemptions provided by the Rule were arbitrary and capricious. This was not the end of the story. In 2014, Oxfam, along with others, filed suit to compel the Commission to promulgate a new final Rule as required by Dodd-Frank.  A revised 13q-1 went into effect on September 26, 2016 but public companies had until September 20, 2018 to comply.

Thus, the Senate’s action in repealing this provision of Dodd-Frank did not disrupt the mass of regulations that go to the most important parts of Dodd-Frank such as the safety and soundness of banks, new consumer protection laws, and derivative clearing. Unsurprisingly, this seems like the Republican majority flexing its muscles – the lion roaring. It hardly comes as a surprise that the Republican leadership does not like much of Dodd-Frank.

Just hours after the Senate’s action, the President issued an Executive Order setting forth the “Core Principles” for regulating the financial system of the United States. On its face, there does not appear to be a significant departure from previous Republican administrations that view regulation as inefficient and an encumbrance to economic growth and U.S. competitiveness. Yet the Core Principles also reconfirm that future federal bailouts of banks, will not occur due to the problem of “moral hazard.” This, of course, was one of the very purposes of Dodd Frank.  In addition, the principles seem to subscribe to the importance of disclosure to prevent information asymmetries which is in fact a long standing fundamental concept in U.S securities law.

This executive order, however, combined with the January 30th Executive Order intended to reduce regulation, and the federal hiring freeze order, should give us significant cause for concern. My guess is that much of the Volker Rule will not go into effect. Moreover, there is real likelihood that the SEC and CFTC will once again become anemic through lack of funding. Issues of funding are much less dramatic than pre-dawn legislative sessions and flashy executive orders but starving regulators is effective. All we have to do is remember the Madoff scandal.

I fear that we will once again enter the cycle of deregulation-crisis-re-regulation. This, of course, is exactly what led us into the Financial Crisis of 2008.


Religious Discrimination and Jewish Immigrants -Post 1

Religious Discrimination and Jewish Refugees

Writing as a legal historian, I would like to say that President Trump’s Executive Order of January 27th regarding immigration and refugees was entirely unprecedented but it was not. What I can say is that looking back at immigration laws and policies, like those in the Executive Order, we can see how they were entirely misguided and driven by racist stereotypes.  I briefly want to point to two such events involving Jewish refugees and immigrants.

In 1892 poor Eastern European Jewish refugees attempting to enter the United States spent months in U.S. quarantine under the mistaken belief that they were carriers of typhoid and later cholera. Such hysteria was driven by the wide-spread stereotype that such Jews were dirty, dangerous, and that they polluted the Christian body of the nation. Protecting the nation’s security was thus mapped on to the Jewish body. At the time, no one brought a habeas petition on behalf of those detained. Rather Jewish charities and others cooperated with officials hoping that the ban would soon be lifted.

Almost fifty years later, European Jews attempting to escape Nazi Germany and occupied countries once again found United States doors closed to them. Despite the extraordinary efforts of a variety of volunteer organizations, as well as the continual private pleas of Eleanor Roosevelt, the U.S. State Department simply refused to grant visas and at times revoked refugee visas already issued to Jews essentially signing a death warrant. President Roosevelt refused to intervene with the State Department considering the plight of European Jews not America’s problem. As historians have demonstrated, the State Department at such time was rife with anti-Semitism, often seeing Jews as communist agitators and Soviet sympathizes who would not uphold American values.

In the same way that the State Department so easily denied visas to those seeking to escape Hitler’s Europe, The Executive Order carelessly, dangerously, and unnecessarily  upended people’s lives. Even if the court’s eventually find parts of the order unconstitutional or a violation of statutory law, it still cuts by more than one half the number of refugees who will be admitted into the United States. Who does such a mean policy possibly benefit?

I am thrilled at the outrage of ordinary people, lawyers, and elected officials regarding the Executive Order.  For those interested in a plethora of open sources material on Immigration and U.S. Policy see




Ten Reasons Why Political Protests Work: A Legal Historian’s View

  1. Second Thoughts: Protests make elected officials hesitate before taking unpopular action. Sustained protests are wearing on elected officials. Think of the Vietnam War protests and the effect that they had on Lyndon B. Johnson.
  2. Visibility: Protests make opposition visible and provides the optics of opposition that the media can broadcast. Think of the images of the Civil Rights Movement and most recently the Women’s March. There is truth to the chant that the whole world is watching.
  3. Supporting Elected Officials. Protests give elected officials who support the protester’s goals ammunition and the ability to sustain opposition — they need to know that their base is behind them
  4. Camaraderie. The gathering of people who have at least one common goal makes a single individual feel part of a group – they are not alone but part of many who feel the same way. Protesting transforms the individual.
  5. Social Movement. From protest a social movement will emerge. At protests people learn from each other and create webs of knowledge about ideas, events, and actions. We learn to act as a coalition.
  6. Safety. If protestors are targeted for their political views, there is safety in numbers—they can’t go after all of us.
  7. Practice. Exercising one’s First Amendment Rights is frightening and takes courage and practice—We need to learn how to use our bodies and voices to stand up for our beliefs.
  8. Protests are Patriotic. There is a long history of protests against the state from the Boston Tea Party to the Civil Rights Movement – it is part of our heritage to make government better and more just. As the chant says, “This is what Democracy looks like.”
  9. Exercising Morality. Protests are a way of visibly saying “not in my name.”
  10. Legal and Social Change. Protest and legal change can go hand in hand. Protests spur lawyers to file legal suits and legal suits can further energize protests.