Five years after Dodd-Frank

Five years ago, on July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed. As we look back, we see the changes the financial markets have undergone as well as those that have yet to be implemented. Not all of the changes are attributed to Dodd-Frank, however; there are a plethora of rules that everyone in the industry must now follow.

Commissioner Daniel M. Gallagher of the SEC put together a sampling of some of the rules that have come into effect since July of 2010. This particular chart was the impetus for this blog article. The chart includes rules from many organizations including the SEC, CFTC, OCC, FDIC, OFR, FinCEN and many others. In fact, it doesn’t even include state regulations or FINRA guidelines (See:  Rules Applicable to U.S. Financial Services Holding Companies Since July 2010). Of course, this only represents the names of the rules, not the actual size of the documents behind them. 

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Are Insider Trading Red Flags Hiding Within Your Option Data?

What makes options such an appealing vehicle for trading on insider information? Their innate leverage and breadth of securities are desirable attributes, particularly in concert. If the expectation is a price rise, then a position in call options can produce far greater percentage returns. This characteristic would naturally benefit any trader with a decided bias, legitimately formed or otherwise. Relative to trading a single stock, there are myriad options with varying strike prices and expirations. Taken together, smaller individual positions spread around a few carefully chosen options has the potential to achieve the desired results.

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