Hi friend, 

Below in our newsletter you’ll see the dog days of August were as active as ever for our team. In addition to a fast-paced regulatory schedule, developments in areas like fintech, and the deepening climate crisis are creating more and more areas where the public interest needs to be protected.

That said, some issues are timeless, perhaps none more so than too-big-too-fail financial institutions that are so big, complex, interconnected, leveraged, and important that their failure risks crashing the entire financial system and economy. That’s what happened 15 years ago when the investment bank Lehman Brothers collapsed into bankruptcy and caused the worst financial crash since 1929 and the worst economy since the Great Depression of the 1930s. The stunning headlines, market losses, and bailouts that resulted from that crisis had a devastating impact on both our financial system and Main Street families across the country. More than 25 million Americans were thrown out of work; more than 16 million Americans faced foreclosure filings; savings, educations, retirements and much more evaporated for tens of millions more, with many not recovering for a decade if ever.

While we made progress in some areas since the 2008 crash, our financial system remains incredibly vulnerable as proved by the recent failures and bailouts of Silicon Valley Bank, Signature Bank, and First Republic Bank. That’s why we are using the 15th anniversary of the crash of Lehman as an important time to discuss the causes, consequences, and ongoing impacts of that crash, too-big-to-fail generally, and all things finance and economics.

On September 13th, Better Markets will host a virtual conference to dive into the policy implications of those many issues that continue to threaten our financial system, and discuss what policymakers and regulators can do about it.

We believe that this conversation is vital to the future of our economy and nation and hope that you can join us for the event.

Best,

Dennis

Dennis Kelleher
Co-Founder, President & CEO, Better Markets

In addition to the tragic human costs, frequent and costly climate disasters are wreaking havoc with the insurance industry, which is causing bankruptcies, skyrocketing premiums, and much more. However, insurance companies avoiding or limiting their losses do not eliminate the losses; they merely shift those losses to others like banks which hold the mortgages and loans on the destroyed assets giving rise to those losses. Put differently, today’s climate crisis is tomorrow’s banking crisis.

In a win for Main Street investors, the Supreme Judicial Court for the Commonwealth of Massachusetts reversed a lower-court judge’s decision that struck down the state’s fiduciary duty rule in the case Robinhood Financial LLC v. Galvin. Better Markets filed an amicus curiae brief supporting Massachusetts and standing against brokers who rip off customers by not putting the investors’ interests first.

The crypto industry’s track record is clear when it comes to consumers, investors, and financial stability. The industry has suffered $2 trillion in losses; multiple enforcement actions, bankruptcies, and criminal prosecutions; and dozens of lawsuits for lying, cheating, and stealing. These are just some of the reasons our team asked the SEC to reject a group of Bitcoin ETF applications.

The New York Times covered Kalshi’s proposal to undermine our democracy by allow gambling on elections. In the story Dennis Kelleher explains, “We are at a perilous point in politics where confidence and trust in elections is low and going lower. The last thing democracy can withstand now is additional activities that erode the confidence of Americans.”

We welcomed Mona Benach to our team as Senior Securities Specialist. She most recently served as Senior Counsel representing public corporations and individuals before the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB.)

“Banks with more than $100 billion in assets—just 33 banks out of nearly 4,700 in the country—are a systemic threat and need to be regulated with more capital and liquidity as well as workable resolution plans.” 

- Dennis Kelleher for American Banker

August 7
US banking industry starts to pick its battles against new capital rules

August 23
SEC Takes On Private Equity, Hedge Funds

August 25
Hester Peirce, Republican thorn in the SEC’s side

August 24
At long last — and over banks' protests — CRA reform is afoot

Each month our legal team outlines some of the top cases we're keeping an eye on, the Amicus "Friend of the Court" Briefs we have filed, and why everyone with a bank account, credit card, mortgage loan, or retirement loan should be interested in those cases.  

August is usually a slower month on Capitol Hill, as Members of Congress spend the month working back home in their districts. However, there were still a few items of note as Members continue to send letters to regulators and others on several key issues.

Dennis Kelleher’s op-ed, “Well-Capitalized Banks are Good for Everyone, Except Wall Street CEOs,” was published in American Banker on August 9, 2023 and explains why bank executives are so against higher capital requirements.