By Pam Martens: June 4, 2012

According to data at the Center for Responsive Politics (www.OpenSecrets.org), the Securities Industry and Financial Markets Association (SIFMA) has spent over $95 million since 2000 lobbying Congress on behalf of Wall Street firms.

Whom has SIFMA employed to do their lobbying?  The largest Wall Street law firms – the same law firms that get a call when the firm blows up a trading desk or its balance sheet. Heads the law firm wins; tails the law firm wins.  At least in the past.  But what happens when there is nothing left of Wall Street but the charred ashes of failed firms?

Last week we saw a glimpse of what happens when legal hubris is unconstrained.  The large law firm, Dewey & LeBoeuf LLP, filed bankruptcy, owing over $315 million to more than 5,000 creditors.  

Below is from the SIFMA web site; the status of bills in the U.S. House of Representatives to stall and/or gut financial reform in the world of derivatives – the unregulated instruments responsible for the ongoing financial crisis.

Status of Derivatives-Related Bills

H.R. 1840: Amends the Commodity Exchange Act to require the CFTC to consider the cost and benefits of proposed rulemakings before promulgating any rule. Action: Approved by voice vote (House Ag 1/25/12). 

H.R. 2586, Swap Execution Facility Clarification Act: Requires the CFTC and SEC to promulgate SEF regulations that allow swaps markets to naturally evolve toward the best form of execution. Action: Approved by voice vote as amended (House Ag 1/25/12).

H.R. 2682, Business Risk Mitigation and Price Stabilization Act: Clarifies that language under Title VII of the Dodd-Frank Act does not give regulators the authority to impose margin requirements on non-financial end users. Action: Approved by a vote of 370 to 24 and sent to Senate (Full House 3/26/12).  

H.R. 2779: Exempts inter-affiliate transactions from the definition of “swap” under the Dodd-Frank Act. Inter-affiliate trades would not be subject to margin and clearing requirements under Title VII of the Act.  Action: Approved by a vote of 357 to 36 and sent to Senate (Full House 3/26/12). 

H.R. 3283, Swap Jurisdiction Certainty Act: Clarifies provisions under the Dodd-Frank Act to ensure equal treatment between U.S. firms conducting transactions outside of the U.S. and foreign firms conducting similar activities. The bill also clarifies that non-U.S. firms that are registered swap dealers would be subject to the capital regime of their home country as long as that country is a Basel signatory.  Action: Approved by vote of 41-18 as amended (HFSC 3/27/12); House Ag legislative hearing held on 3/28/12.  

H.R. 3527, Protecting Main Street End-Users from Excessive Regulation: Amends the Commodity Exchange Act to clarify the definition of “swap dealer” by clarifying that banks could not be considered a “swap dealer” with regard to entering into a swap with a customer in connection with originating a loan to that customer or for a person who enters into swaps for their own account.  Action: Approved by voice as amended (House Ag 1/25/12). 

H.R. 4235, Swap Data Repository and Clearinghouse Indemnification Correction Act of 2012: Repeals the Dodd-Frank Act indemnification requirements for regulators to obtain data from SDRs. The bill requires U.S. or foreign regulators seeking access to swap data from an SDR to provide assurances that the regulator will abide by certain confidentially requirements. Action: Approved by voice vote as amended (HFSC 3/27/12); House Ag legislative hearing held on 3/28/12.