February 25, 2010 at 2:26 pm
The man who worked 30 years for Bernie Madoff overseeing the back office record-keeping staff has been arrested on fraud and conspiracy charges related to Madoff’s collapsed multi-billion dollar Ponzi scheme. Law Professor Tamar Frankel, a securities law authority and author of “Trust and Honesty: America’s Business Culture at a Crossroad,” says the arrest may help Madoff’s bilked investors.
“His case is important for others who were involved and are currently under the mask of ignorance. If this ‘director’ confesses to having done wrong but leaves out the details, others might remain in the shadows. But if he fights and brings facts, more can be known and more actors can be implicated.”
Contact Tamar Frankel, 617-353-3773, tfrankel@bu.edu
February 25, 2010 at 11:20 am
Major components of financial-reform legislation are taking shape, with the Obama administration relaxing its insistance on a stand-alone consumer protection agency and the "Volker Rule" allowing regulators to bar banks from risky investments losing support. Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law, said cutting the "Volker Rule" is a loss.
"Grafting this complex proposal onto the Administration’s plan at the eleventh hour was overly ambitious. Half-hearted efforts by a Wall Street-enamored Treasury Department and White House economists ensured Chairman Volcker’s very credible proposal would never receive a fair hearing."
Contact Cornelius Hurley, 617-353-5427, ckhurley@bu.edu
February 23, 2010 at 5:13 pm
A prominent Saudi cleric has put a death fatwa on those who support mixing of genders in the workplace or schools. International Relations Professor Houchang Chehabi, a native of Iran, calls it a desperate action by an ultraconservative cleric who does not represent official Saudi views.
"At this point over half of all students at Saudi universities are women, and there is no reason to assume that, once empowered by their education, they will all accept sexual segregation for the rest of their lives."
Contact Houchang Chehabi, 617-358-0193, chehabi@bu.edu
February 22, 2010 at 4:57 pm
The International Monetary Fund is apparently rethinking some of its long-held ideas about how unfettered capital flows between countries are "a fundamentally benign phenomenon." International relations Professor Kevin Gallagher, co-author of "Capital Controls and 21st Century Financial Crises," says it's about time the IMF sees that some capital controls are useful and necessary.
"The U.S. National Bureau of Economic Research published an assessment in 2007 that came to the same conclusion. Now, the challenge for both the IMF and the United States is to ‘practice what you preach.’ The U.S. needs to put its policy on capital controls in tune with economic science."
Contact Kevin Gallagher, 617-353-9348, kpg@bu.edu
February 22, 2010 at 2:47 pm
A federal judge okayed a $150 million Bank of America settlement with the SEC to end civil charges accusing the nation's largest bank with misleading shareholders when it acquired Merrill Lynch. But law Professor Elizabeth Nowicki, both a former SEC and Wall Street attorney, says it is likely a short-lived "win" for BofA because the judge said in his written opinion that the bank failed to adequately disclose facts to its shareholders.
"It will turn out to be a huge loss for BofA given that the lawyers in the other pending lawsuits against it will use the judge's words in the settlement opinion to help guide their litigation."
Contact Elizabeth Nowicki, 617-353-2807, enowicki@bu.edu
February 19, 2010 at 5:05 pm
The U.S. Department of Health and Human Services has issued a report warning of double-digit increases coming in health insurance premiums. School of Management Professor Stephen Davidson, author of “Still Broken: Understanding the U.S. Healthcare System," says if the report was released to highlight the need for reform, then the administration is right on.
"The real question is whether they can make the case compellingly enough that wavering Congressmen will pass the Senate bill -- and then members of both houses will also pass a reconciliation bill that will satisfy House members who don’t like some of the Senate bill’s provisions."
Contact Stephen Davidson, 617-353-7422, sdavidso@bu.edu
February 19, 2010 at 4:43 pm
BU researchers are exploring why certain families produce members who live well past their eighties. The Long Life Family Study, made up of investigators from other universities and sponsored by the National Institutes of Health, will try to determine which environmental, behavioral and genetic factors contribute to longevity. Boston University Associate Professor Dr. Thomas Perls, one of the lead investigators, is also the director of the New England Centenarian Study. In a TIME Magazine Special Report: How to Live 100 Years, Perls says:
"When it comes to rare genetic variations that contribute to longevity, family (analysis) is particularly powerful. But just because something occurs in a family doesn't mean it is necessarily genetic. There are lots of behaviors and traditions that happen in families that play a role in longer life expectancies. We want to use these families to ferret out what these factors are."
Dr. Perls can be reached at 617-638-6688.
February 19, 2010 at 12:37 pm
Senate Banking Committee Chairman Chris Dodd will propose a council of regulators -- headed by the Treasury secretary -- be created to monitor systemic risk across the financial spectrum. Former Federal Reserve Bank examiner Mark Williams, who teaches finance in the School of Management is is author of "Uncontrolled Risk" about the fall of Lehman Brothers, says the regulators haven't yet earned it.
"Before this important role is handed over, these regulators need to demonstrate they have fixed the gaps in bank oversight and early risk detection. Unfortunately, there have been no high-level changes at any of the U.S. regulatory agencies nor any independent reports completed indicating why our watchdogs did not bark."
Contact Mark Williams, 617-358-2789, williams@bu.edu
February 18, 2010 at 4:44 pm
The Obama administration is pushing Congress to ratify the 1996 U.N. nuclear test-ban treaty and increase appropriations to monitor America's aging stockpile without testing. Philip O'Neill, author of "Verification in an Age of Insecurity" who teaches national security law at the BU School of Law, says extra monitoring is good but addresses only part of the nation's verification dilemma.
"There remain issues pertaining to our ability to monitor evasion through low yield tests; interpretation of what activity is properly constrained; the adequacy of the policing mechanism; the requisite certainty now needed in verification; and what standard to apply through the ratification process itself. Each is fair game in the renewed consideration of the comprehensive test ban."
Contact Philip O'Neill, 617-951-2253, poneill@eapdlaw.com
February 18, 2010 at 3:42 pm
Bank of America is balking at suggestions from a federal judge that an outside compensation consultant be appointed as part of BofA's settlement with the SEC. The judge has twice rejected as too small settlement proposals in the case involving BofA not disclosing both losses and bonuses when it merged with Merrill Lynch. Law Professor Elizabeth Nowicki, a veteran of both Wall Street and the SEC, says Bank of America shareholders are not being treated fairly.
"The fact that Bank of America executives continue to publicly balk at suggestions that are intended to protect shareholders indicates that nothing has changed at the top levels of BofA since last year, when its executives ignored the interests of its shareholders regarding the Merrill Lynch investors."
Contact Elizabeth Nowicki, 617-353-2807, enowicki@bu.edu
