CLE Program: Dodd-Frank Financial Regulatory Reform - Update

Transcription

1 2011 Business Bar Leaders Conference May 10-11, 2011 Renaissance O Hare Suites - Chicago, IL CLE Program: Dodd-Frank Financial Regulatory Reform - Update Chair: Patricia Struck, Madison, WI Member, Board of Governors of the State Bar of Wisconsin Former Chair, Business Law Section of the State Bar of Wisconsin Division of Securities, Department of Financial Institutions Panelists: Lynne B. Barr, Boston, MA Chair, ABA Business Law Section Goodwin Procter LLP James Bedore, Milwaukee, WI Former Editor, The Tax Lawyer Reinhart Boerner Van Deuren SC

2 DODD FRANK FINANCIAL REGULATORY REFORM I. Introduction and Background On July 21, 2010, the Dodd Frank Wall Street Reform and Consumer Protection Act became law. Described by President Obama upon introduction as "sweeping overhaul of the United States financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression", the Act impacts almost every aspect of financial services and provides for heightened regulation of the financial services profession. With close to a dozen federal regulators overseeing various parts of the financial markets, and numerous state regulators mirroring their activities, the Act establishes the Financial Stability Oversight Council at Treasury with among its many responsibilities the task of keeping the regulations being developed under the Act running on time and in the right sequence. The Act mandates 235 rulemakings, 41 reports, and 71 studies by 11 different federal agencies and bureaus. In some cases multiple regulators have joint jurisdiction over the same markets and products. This panel will highlight the provisions of Dodd Frank of most relevance to business bar leaders and will provide the latest information on the demands for repeal of some of the Act s reforms.

3 Bank Regulation under Dodd Frank Lynne B. Barr American Bar Association Business Law Section Business Bar Leaders Conference May 11, 2011

4 Dodd-Frank Act Shield financial system from systemic risk Address weaknesses in financial services law and regulation that contributed to severe economic downturn and related disruption in the financial markets Enacted on July 21, 2010 Implementation dates of provisions vary Over 240 rulemakings and 70 studies mandated Goodwin Procter LLP 2

5 Dodd-Frank Act Creates new regulatory agency that will focus exclusively on the protection of consumers who purchase financial services New monitoring and controls of large, systemically significant financial institutions (which include non-banks as well as banks) FDIC authority to liquidate large non-bank financial firms Federal deposit insurance reform Makes permanent $250,000 deposit insurance limit Permits banks to offer interest-bearing commercial checking accounts Elimination of Office of Thrift Supervision as stand-alone agency; will become bureau of Comptroller of the Currency Goodwin Procter LLP 3

6 Dodd-Frank Act Establishment of Federal Insurance Office Monitor industry, including issues or gaps in regulations that could contribute to systemic crisis Coordinate federal policy on international insurance matters Consider costs and benefits of potential federal regulation Director must submit report by January 2012 on how to modernize and improve insurance regulation Goodwin Procter LLP 4

7 Consumer Financial Protection Bureau Independent bureau within Federal Reserve Jurisdiction over federal consumer financial laws Bureau to be headed by a Presidentially-appointed director Requires Senate confirmation Five-year term Designated transfer date - July 21, 2011 Funded by Federal Reserve Goodwin Procter LLP 5

8 Consumer Financial Protection Bureau For banks and credit unions with total assets of $10 billion or less, prudential regulator will retain exclusive enforcement authority Authority to proscribe unfair, deceptive or abusive acts or practices Supervisory authority over non-bank financial services firms Consumer staffs from banking agencies generally will become employees of CFPB Goodwin Procter LLP 6

9 Preemption/Mortgage Rules State laws preempted only if Would have a discriminatory effect on national banks or federal savings banks Prevents or significantly interferes with the exercise of bank powers or Is preempted by another federal law Interest rate exportation not affected Title XIV establishes numerous new protections for residential mortgage loan borrowers and new requirements for those engaged in residential mortgage lending Goodwin Procter LLP 7

10 Durbin Amendment Interchange or swipe fee for debit card transactions must be reasonable and proportional to cost incurred by issuer Designed to help merchants Prohibits network exclusivity and routing restrictions Statute requires final rules by July 21, 2011 Comment period closed on February 22, 2011: 10,000 comments FRB proposed swipe fee limit alternatives between 7 and 12 cents Goodwin Procter LLP 8

11 Current State of Play Outcry over proposal: Debit Card Debacle Effect on small banks Price-setting Bill introduced in March to delay effective date for 2 years after passage of the bill Goodwin Procter LLP 9

12 Small Business Data Collection Section 1071 requires data collection by banks about applications for credit by small businesses and women- and minority-owned businesses Small business defined by reference to Section 3 of the Small Business Act Applicants may refuse to provide information No loan underwriter shall have access to any data collected, where feasible Provide notice if access given to underwriter Effective date is July 21, 2011 Submitted annually to CFPB Goodwin Procter LLP 10

13 Application of Dodd-Frank Wall Street Reform and Consumer Protection Act James M. Bedore, Esq. Reinhart Boerner Van Deuren s.c North Water Street, Suite 1700 Milwaukee, WI 53202

14 Say on Pay Shareholders of public companies must have the right, at least once every three years, to vote on executive compensation. This say on pay provision encompasses the following components: the vote is nonbinding and does not overrule board decisions or modify any board fiduciary duties; shareholders vote once every six years to determine how frequently to have the vote on executive compensation;

15 Say on Pay the vote covers the compensation disclosures in the proxy statement (i.e., under Item 402 of Regulation S-K); the vote covers the compensation of the named executive officers; following the frequency vote, a company must disclose on a Form 8-K how often it will hold the say-on-pay vote;

16 Say on Pay the rules also require additional disclosure in the Compensation Discussion and Analysis (CD&A) regarding whether, and if so how, companies have considered the results of the most recent say-on-pay vote; and the nonbinding votes do not require the filing of a preliminary proxy statement with the SEC

17 Golden Parachute Compensation Each proxy statement for any meeting of shareholders held to approve an acquisition, merger, consolidation or sale of all or substantially all of the company's assets must: include disclosure, in a clear and simple form in accordance with rules to be adopted by the SEC, describing any agreements or understandings that the company or any other party to the transaction has with any of the company's named executive officers concerning any type of compensation that is based on, or relates to, the transaction and the aggregate total of all compensation paid or payable to such officers;

18 Golden Parachute Compensation provide a separate nonbinding shareholder vote to approve these merger-related compensation arrangements unless the arrangements have already been subject to a vote under the "Say on Pay" voting provision described above; and the "golden parachute" disclosure is also required in connection with other transactions, including going-private transactions and thirdparty tender offers, so that the information is available for shareholders no matter the structure of the transaction

19 Golden Parachute Compensation This provision covers any type of compensation related to the transaction, whether currently paid, deferred or contingent

20 Pay for Performance The Act requires the SEC to adopt rules for disclosure in annual meeting proxy statements of executive compensation information that shows the relationship between a company's financial performance and the compensation paid to its executives: the disclosure should take into account changes in the company's stock price and the payment of dividends; and the disclosure may include a graphic representation of the relationship (the Act encourages the SEC to adopt rules requiring the use of a graph)

21 Internal Pay Equity The SEC is required to amend its compensation disclosure rules to require disclosure of: the median annual total compensation for all employees (except the CEO); the annual total compensation of the CEO (as set forth in the summary compensation table); and the ratio of the two

22 Internal Pay Equity Total employee compensation is required to be disclosed in a manner consistent with Item 402 of Regulation S-K (i.e., total employee compensation is to be calculated in a manner similar to the compensation calculated for the CEO and shown in the summary compensation table in the proxy statement)

23 Compensation Committees Independent Directors The Act requires the SEC to adopt rules creating minimum independence standards for compensation committee members and to direct the national securities exchanges to prohibit the listing of a public company whose committee members do not satisfy the SEC's standards. In determining independence, the Act requires the SEC to consider the following in adopting applicable rules:

24 Compensation Committees Independent Directors the source of compensation of a director, including any consulting or advisory fees; whether the director is affiliated with the company, a subsidiary of the company or any affiliate of a subsidiary; and the exchange may provide for a cure period if the member is not independent as a result of actions outside such person's control

25 Compensation Committees Independent Directors The national securities exchanges already specify independence standards and SEC rulemaking is likely to enhance/clarify those standards. Controlled companies are to be excepted from the SEC's standards.

26 Compensation Committees - Consultants The Act directs the SEC to adopt rules: Identifying the factors which affect the independence of compensation consultants or other advisors (including legal counsel) to compensation committees. Under the Act the factors must include: the provision of other services to the company by the consultant/advisor; the amount of fees paid by the company as a percentage of total revenue of the consultant/advisor;

27 Compensation Committees - Consultants the policies and procedures of the consultant/advisor that are designed to prevent conflicts of interest; any business/personal relationship of the consultant/advisor with a member of the committee; and any stock of the company owned by the consultant/advisor;

28 Compensation Committees - Consultants directing the national securities exchanges to prohibit the listing of a public company which does not provide that is compensation committee (a) may only hire consultants and advisors after taking into consideration the factors referred to above, (b) has the sole discretion on hiring consultants/advisors to assist it in setting pay and (c) is directly responsible for the appointment, compensation and oversight of the consultant/advisor; moreover, the company is required to provide appropriate funding to the committee to pay the fees of consultants/advisors; and

29 Compensation Committees Consultants requiring annual meeting proxy statements to include disclosure of whether a company retained or obtained the advice of a consultant and whether the work raised any conflict of interest, the nature of the conflict, and, if there was a conflict, how that conflict was resolved The Act excludes controlled companies from these requirements

30 Claw Back of Compensation The Act requires the SEC to direct the national securities exchanges to prohibit the listing of any public company which does not establish policies to recover incentive-based compensation paid to current/former executive officers based on financial statements that must be restated due to material noncompliance with financial reporting requirements (including noncompliance with GAAP). This provision contains the following:

31 Claw Back of Compensation compensation that is recoverable includes incentive-based compensation (including stock options) received during the three-year period preceding the restatement and equals the amount paid in excess of what would have been paid under the restated financial statements; the claw back applies regardless whether the financial statements are restated due to misconduct or otherwise; and the claw back covers all executive officers

32 Proxy Access The Act authorizes the SEC to create rules by which shareholders of a public company may nominate directors through the company's proxy materials. On August 25, 2010 the SEC adopted rules as directed by the Act covering proxy access. The key components of the SEC's proxy access rule (Rule 14a-11) consist of the following: process access is available to any shareholder (or shareholder group) that continuously holds at least 3% of the voting stock for at least 3 years prior to the time the shareholder (or group) notifies the company of its intent to nominate a director;

33 Proxy Access ownership must be of a class of securities subject to the SEC's proxy rules; the shareholder or group must have both investment power and voting power over the securities; and

34 Proxy Access with multiple classes of stock with unequal voting rights and where the classes vote together, voting power is calculated based on the collective voting power of all classes that vote together; if the classes don't vote together (i.e. you vote on different directors), then voting power is determined only on the basis of the voting power of the class that votes for the director(s) to be nominated under the SEC rule.

35 Proxy Access shareholders can nominate candidates representing up to 25% of a company's board members or 1 candidate, whichever is greater; an incumbent director originally elected as a shareholder nominee under the rule but that is re-nominated by the company in future years does not count toward the 25% limit;

36 Proxy Access if the company receives more shareholder candidates than it is required to include in the proxy materials, then the company shall include the nominee(s) put forward by the shareholder (or group) representing the largest ownership stake;

37 Proxy Access each nominee or nomination must comply with the following general criteria: compliance with applicable law; satisfaction of objective independence standards of the applicable national securities exchange; and the nominating shareholder (or group) having no agreement with the company regarding the nomination or the nominee prior to the shareholder (or group) notifying the company of its intent to nominate a director;

38 Proxy Access the nominating shareholder (or group) must furnish the company a notice (on Schedule 14N that is filed with the SEC) AND contains certain disclosures; disclosure items include, among other items, the following: the name of the nominating shareholder (or group members), its or their contact information and the number of voting securities held;

39 Proxy Access evidence of ownership amount and duration (which can consist of (1) a written statement from the nominating shareholder that it is the registered holder, (2) a written statement from the registered holder such as a broker/dealer or bank verifying that the nominating shareholder held the shares for the requisite period of time or (3) a written statement from the nominating shareholder that ownership is based upon a Schedule 13G/13D or a form 4 filed with the SEC);

40 Proxy Access a statement of its intent to hold the shares through the meeting date and a statement regarding its plan on holding the stock after the meeting date; a statement that the nominee consents to be named in the proxy statement and to serve on the board if elected; disclosure regarding the nominating shareholder(s) interests in the solicitation, methods of solicitation and estimated costs of solicitation;

41 Proxy Access a statement regarding whether the nominating shareholder (or group) believes the nominee meets the company's director qualification requirements, which statement must be disclosed in the proxy statement; information regarding the nature of any relationships between the nominating shareholder (or group) or the shareholder nominee and the company; if desired, a statement in support of the nominee which shall not exceed 500 words; and

42 Proxy Access a statement that the shareholder (or group) is not holding the shares for the purpose of, or with the effect of, changing the control of the company or gaining more than the maximum number of seats on the board the proxy card can identify the shareholder nominees and include the board's recommendation of whether shareholders should vote for, against or withhold votes on those nominees;

43 Proxy Access a shareholder (or group) must furnish notice to the company of their proposed nominee between 120 and 150 days prior to the anniversary of the mailing date of the proxy materials in the prior year, subject to the following additional provisions:

44 Proxy Access if the date of the meeting has changed by more than 30 calendar days from the prior year, then the company must file an 8-K report within 4 business days of determining the annual meeting date, and the nominating shareholder (or group) must provide notice on Schedule 14N of its nominee a reasonable time before the company mails its proxy materials for the current year; and

45 Proxy Access the company must disclose in its proxy materials the deadline for submitting nominees for the next annual meeting of shareholders; the proxy access rule also resulted in the SEC amending rule 14a-8 which generally covers shareholder proposals to explicitly permit shareholder proposals relating to proxy access in the form of bylaw amendments and requests for bylaw amendments.

46 CEO/Chairman Disclosure The SEC must issue rules requiring a public company to disclose in its annual meeting proxy statement the reason why it has the same or different person serving as Chairman and Chief Executive Officer.

47 Hedging Disclosure The SEC must adopt rules requiring a public company to disclose in its annual Proxy Statement whether employees or Board members are permitted to purchase financial instruments that are designed to hedge or offset a decrease in the market value of equity securities granted as compensation or are otherwise held, directly or indirectly, by the employees or directors.

48 Broker Voting Discretion The NYSE previously adopted a rule governing the authority of brokers to vote securities in the broker's discretion in the absence of voting instructions from its customers who are the beneficial owners the rule allows broker voting on "routine" matters only (uncontested director elections are not "routine"). The Act goes further and requires that all national securities exchanges may not permit broker discretionary voting with respect to director elections, executive compensation (including say on pay proposals and incentive plan amendments) or any other significant item determined by the SEC.

49 Internal Control Audit The SEC has continuously delayed application of the Section 404(b) internal controls audit to companies that are not accelerated filers (including smaller reporting companies companies with public float less than $75 million). The Act creates a permanent exception from the requirements of the 404(b) audit for nonaccelerated filers. The SEC is also directed to conduct a study of the burden of the audit on filers with market capitalizations of between $75 million and $250 million.

50 Whistleblower Incentives and Protections The Act provides whistleblowers expanded incentives and protection. The Act directs the SEC to pay whistleblowers an award between 10 and 30% (subject to the SEC's discretion) of any whistleblower sanction arising from an administrative action in which the amount, including penalties, interest and disgorgement, exceeds $1 million. Whistleblowers are protected from retaliation by their employers and the Act establishes a cause of action by whistleblowers who are subject to harassment, demotion, threats or other misconduct.

51 Whistleblower Incentives and Protections Whistleblowers are entitled to reinstatement, two times their back pay and all litigation expenses if they prevail in any action under this provision.

52 III. Investment Adviser Regulation Title IV: Regulation of Advisers to Hedge Fund and Others A. Others : Shift in Oversight of Mid Sized Investment Advisers For fifteen years, since implementation of the National Securities Markets Improvement Act of 1996, regulation of investment advisers has been divided between the SEC (SEC advisers or federal covered advisers ) and the state securities regulators ( state advisers ). An adviser s assets under management determined the regulatory authority: under $25 million in AUM meant that an adviser would fall under state jurisdiction while over $25 million in AUM meant that an adviser would fall under SEC jurisdiction. Title IV of Dodd Frank amended the Investment Advisers Act of 1940 to create a new category of investment adviser: mid sized adviser. Mid sized advisers generally will be state advisers. Currently, the Investment Adviser Registration Depository ( IARD ) shows more than 26,000 advisers registered: 11,000 with the SEC and 15,000 with the states. Creation of the mid sized adviser category will shift approximately 4,000 SEC advisers to state authority. The SEC has proposed in Release No. IA 3110 rules implementing the mid sized adviser switch. The effective date of Title IV of the Act is July 21, However, the SEC staff has announced a delay in the effectiveness of the switch to the first quarter of B. Hedge Fund Advisers Title IV of the Act eliminates the private adviser exemption in section 203(b)(3) of the Advisers Act. This is the exemption on which advisers to hedge funds have traditionally relied to avoid registration and oversight by the SEC. In repealing the private adviser exemption, Congress also created or directed the SEC to create other exemptions for advisers to certain categories of private funds. Advisers not covered by the new exemptions will be subject to registration with and examination by the SEC. The new exemptions, proposed in the SEC s release No. IA 3111, cover venture capital funds as well as advisers to private funds with AUM of under $150 million. The SEC has proposed the concept of exempt reporting adviser to apply to advisers claiming the new exemptions: exempt reporting advisers will file and maintain on IARD a sort of Form ADV lite. State securities regulators have proposed a model rule implementing the state law treatment of exempt reporting advisers and have announced that, based on comments in the first public comment period, the rule will be released for another round of comments. This second opportunity for comment coincides with the announcement by the SEC staff that the rules implementing the provisions requiring registration of advisers to private funds will also be delayed until the first quarter of 2012.

53 C. Fiduciary Duty For securities professionals, especially broker dealers, perhaps the most controversial provision of the Act is the fiduciary duty for anyone giving personalized investment advice to individual retail investors. The Act authorized the SEC to adopt a by rule a uniform fiduciary standard and, in Section 913, mandated that the SEC conduct a study on the effectiveness of existing legal and regulatory standards of care for brokers, dealers, investment advisers and others, and determine whether there are any gaps or shortcomings in these standards. The staff s report of January 21, 2011 recommended adoption of a fiduciary standard for brokerdealers and investment advisers when providing personalized investment advice about securities to retail customers, no less stringent than currently applied under Sections 206(1) and (2) of the Advisers Act. The Study explicitly rejects two other approaches that Section 913 required the SEC to consider: eliminating the broker dealer exclusion from the definition of investment adviser under the Advisers Act, and applying the duty of care and other requirements of the Advisers Act to brokerdealers.

54 V. Wall Street Transparency and Accountability Title VII of the Act mandates that the CFTC and the Securities and Exchange Commission write rules governing the derivatives market. The two agencies are also to engage in joint rulemaking to define key definitional terms relating to jurisdiction (such as swap, security based swap, and security based swap agreement) and market intermediaries (such as swap and security based swap dealers and major swap and security based swap participants), as well as adopt joint regulations regarding mixed swaps and prescribe requirements for trade repository recordkeeping, and books and records requirements for swap entities, related to security based swap agreements. They also are consulting with foreign regulatory authorities on the establishment of consistent international standards with respect to products and entities in this area. The purpose of the Act s mandate was to reduce risk and increase transparency after unregulated swaps trading was identified as a culprit in the 2008 financial crisis, most notoriously the collapse of Lehman Brothers and the near collapse of AIG. A. Swaps Swaps are derivative securities involving the exchange by the parties to the swap of various potentially beneficial features of a financial instrument. The Act defines a swap broadly as any transaction that is not immediately settled by delivery of the underlying commodity. By and large, the job of regulating the swap market falls to the CFTC; while the SEC will take responsibility for the smaller market in security based swaps. The CFTC has moved aggressively to exercise its authority under the Act by proposing rules regulating swap dealers as well rules calling for increased transparency, improved pricing, and reduction of credit risk in the derivatives marketplace. They require or at a minimum encourage derivatives to be traded on registered exchanges, and cleared through registered central counterparties. B. Over the Counter Security Based Swap Agreements SEC is to regulate these instruments defined as swaps based on a single security or loan or a narrow based group or index of securities. Security based swaps are included within the definition of security under the Securities Exchange Act of 1934 and the Securities Act of The Act mandated that both the CFTC and the SEC adopt their swaps rules by July 15. Critics by and large those financial institutions that would be impacted by regulation have objected because the CFTC and the SEC have proposed rules that are not consistent. Most recently, certain critics have called for a delay of 18 months in the deadline for the 2 agencies to adopt rules. They ve been especially critical of the CFTC as stressing a quick solution over the right solution.

55 SEC Chairman Mary Schapiro said in April that her agency was working with the Commodity Futures Trading Commission on regulating swaps, but some parts of the market need to be regulated differently. "Going into this, the desire of both agencies was to minimize the differences between our approaches," Schapiro said. "While we have proposed some things that are different, some of that is driven by the fact they're different products and trade differently."

56 LYNNE B. BARR Partner Areas of Practice Lynne Barr, a partner in Goodwin Procter s Financial Services Group and chair of its Consumer Financial Services Practice, focuses on banking and financial services law. She advises banks, bank holding companies, brokerage concerns, mortgage companies, trade associations and other entities on general corporate matters, including the operation and offering of their products and services, particularly in the context of federal and state regulation of financial institutions and their activities. Ms. Barr has extensive experience in credit and mortgage lending matters (including licensing, disclosure, documentation, interest rate limitations and credit reporting), fair lending and equal credit opportunity issues, credit and deposit services, electronic banking and Internet services, and insurance products. Work for Clients Ms. Barr advises financial institutions on transactions, such as mergers, acquisitions and conversions from mutual to stock form, the operation of payments networks and the offering of debit card, Internet and electronic funds transfer (EFT) services and other products. She conducts contract negotiations for product development, licensing, automated clearinghouse, computer systems and network agreements and represents clients on federal and state legislative and regulatory matters, including privacy. Professional Activities Ms. Barr is the Chair of the American Bar Association s Section of Business Law and is a member of its Council. She has recently completed a term as Editor-in-Chief of The Business Lawyer, the Section s scholarly journal. Ms. Barr is the former chair of the ABA s Consumer Financial Services Committee. In addition, she is the former chair of the Financial Holding Company Subcommittee of the ABA s Banking Law Committee and the ABA s Consumer Financial Services Subcommittees on Deposit Accounts and Programs. Ms. Barr is a past President of the American College of Consumer Financial Services Lawyers. In addition, she is a member of the Board of Directors of the Electronic Funds Transfer Association and the Consumer Bankers Association Lawyers Committee. Ms. Barr is also a member of the American Law Institute.

57 Media and Presentations Ms. Barr is a frequent speaker on banking and consumer financial services issues for trade association and legal education seminars. She is the author of numerous articles on banking, consumer credit, EFTs and deposit account issues. Professional Experience Prior to entering private practice, Ms. Barr was a senior attorney in the Division of Consumer and Community Affairs of the Board of Governors of the Federal Reserve System, where she worked on consumer credit, electronic funds transfer and consumer leasing matters. She is also a former faculty member of the Boston University Law School Graduate Program in Banking Law. Bar and Court Admissions Ms. Barr is admitted to practice in Massachusetts and the District of Columbia. Recognition In 2010, Ms. Barr was the recipient of the Senator William Proxmire Lifetime Achievement Award. Given by the American College of Consumer Financial Services Lawyers, the award is granted to a person who has made significant contributions in the field of consumer financial services. In 2005, Ms. Barr received the prestigious Jean Allard Glass Cutter Award from the American Bar Association Business Law Section, presented annually to an exceptional woman business lawyer who has made a significant contribution both to the profession and to the Section of Business Law. Ms. Barr has been selected for inclusion in Chambers USA: America s Leading Lawyers for Business and The Best Lawyers in America. Education J.D., George Washington University, 1975 (with honors) B.A., George Washington University, 1972 Ms. Barr also attended the University of California at Berkeley.

58 James M. Bedore [T] [F] Admitted to the Bar Wisconsin Practice Area Business Law Legal Services Mergers and Acquisitions Securities Private Equity, Venture Capital and Corporate Finance Corporate Governance Institutional Investor Services James M. Bedore is a shareholder in the firm's Business Law Practice and Chairman of the Securities Team. Representative Matters and Experience Mergers and acquisitions Public securities offerings on behalf of issuers and underwriters, private placements, venture capital, bank and other financing arrangements Corporate governance Representation of boards, special committees and other board committees Securities compliance and reporting and disclosure obligations Executive compensation Contract and licensing matters Shareholder rights Accolades Best Lawyers in America (Corporate Law; Mergers & Acquisitions Law and Securities Law) Chambers USA: America's Leading Lawyers For Business Corporate/M&A Leading Individuals since 2004 Martindale Hubbell AV Preeminent Peer Review Rated Selected for inclusion in Wisconsin Super Lawyers Affiliations/Memberships State Bar of Wisconsin (Securities Law Committee) American Bar Association The Tax Lawyer (former editor) Education J.D., cum laude, Georgetown University, 1985 B.B.A., with distinction, University of Wisconsin Madison, 1981 Milwaukee Madison Waukesha Rockford (P.C.) Phoenix Denver (P.C.)

59 Patricia D. Struck is the Administrator of the Securities Division of Wisconsin s Department of Financial Institutions. She is a member of the Board of Governors of the State Bar of Wisconsin. She chairs the State Bar s Committee on Committees and has chaired the State Bar s Business Law Section and served on its Board as well as serving on the State Bar s Multidisciplinary Practice Commission. In , she was president of the North American Securities Administrators Association (NASAA), the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states. She currently serves on the NASAA Board of Directors. Ms. Struck is a Fellow of the American Bar Foundation. Before beginning her public service career, she was an attorney with a large regional bank and graduated from the American Bankers Association s National Trust School. She speaks frequently on the subjects of compliance for securities professionals as well as preventing financial fraud against older investors. She serves on the Boards of Directors of TEMPO Madison and the Madison Ballet. She has a B.A. degree in Romance Languages from Mount Holyoke College and a J.D. degree from the University of Wisconsin Law School.