Tag: Regulatory Ramblings

Regulatory Ramblings: Episode 51 – The EU AI Act: Why it Matters for Asia and Beyond with Michael Borrelli (AI & Partners) and Anandaday Misshra (AMLEGALS)

London-based Michael Charles Borrelli is a Director at AI & Partners – a European professional services firm for entities subject to the EU Artificial Intelligence Act. It is leveraging over a decade of experience in financial services, compliance, and technology to help clients navigate AI’s complex and evolving regulatory landscape. This includes a strong passion for responsible AI and its potential to create a positive social impact while minimizing its risks and challenges.

In addition to his role at AI & Partners, Michael’s responsibilities include serving as an independent director of finance, as a FinTech ambassador, and as an AI 2030 chapter advisor, where he has made contributions to the development and dissemination of knowledge, best practices, and policy recommendations on AI and FinTech. He also holds a Master of Laws degree in Financial Regulation and Compliance, an Oxford FinTech Programme certificate, and a Google Cloud Introduction to Responsible AI certificate, among others. Michael has been a prolific writer and speaker on AI, FinTech, and compliance, having published multiple articles and delivered presentations at various events and platforms.

Anandaday Misshra is the founder and managing partner of AMLEGALS, a law firm with a presence in key Indian hub cities. The firm is multidisciplinary in its approach and specializes in value and strategy in taxation, technology, commercial litigation, and arbitration. With over 27 years of experience as a lawyer and a strategic advisor, Anand works with clients across various sectors and countries.

His particular areas of practice include arbitration, data protection and privacy, contracts, employment law, taxation, and white-collar crime. He also handles litigation in India’s constitutional courts and has rich experience in M&A, joint ventures, due diligence, and cross-border transactions.

Additionally, Anand has authored multiple books and white papers on various legal topics and has been ranked as one of the “Top 100 lawyers to follow” on LinkedIn globally. He was recently bestowed with LinkedIn’s “Top Data Privacy Voice” badge.

He is also a professional The International Association of Privacy Professionals (IAPP) member and a certified Technical Privacy Masterclass holder. Anand is passionate about advancing his knowledge and skills and contributing more broadly to the legal community and society.

Artificial Intelligence, or AI, has been much in the news recently, with apocalyptic headlines about how it will contribute to unemployment or underemployment by eliminating jobs in some industries and, in some cases, bringing about the end of the human race itself.

In that spirit, we look at the EU AI Act, the world’s first comprehensive AI law, which took effect on August 1, 2024.

The legislation has been called ground-breaking. It aims to ensure better conditions for developing and using artificial intelligence, fostering benefits such as improved healthcare, safer transport, more efficient manufacturing, and sustainable energy solutions.

The European Commission’s proposed regulatory framework for controlling AI systems at various risk levels is still in development.

The intricacies of existing and emerging privacy regulations in the European Union and the challenges facing in-house and general counsel will require clarity. Moreover, whether the United States will take inspiration from the EU’s approach and introduce similar regulations shortly is an open question.

In this episode of Regulatory Ramblings, our guests discuss with host Ajay Shamdasani why the EU AI Act matters for the region and the world and why the EU was keen to pass it. Specifically, they discuss the legislation’s impact on compliance officers and in-house/general counsel at the world’s central banking and multinational corporations—and, more to the point, on businesses, organizations, and individuals operating both within the EU and beyond its borders.

A pronounced concern in the Asia-Pacific and elsewhere is whether the EU AI Act will take inspiration from the US and construe violations of its rules and regulations outside of its borders as warranting its exercise of extraterritorial jurisdiction globally, as was the case for the Foreign Account Tax Compliance Act (FATCA) and all the controversy and rancor it caused a decade ago.

As Michael points out, the EU likely needs more resources and capacity to enforce its will internationally, as the US does.

The conversation concludes with speculation over whether the US will enact its AI law with rules comparable to the EU’s. Anand also discusses the impact of AI on India’s information technology sector.

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Tags Anandaday Misshra, Michael Borrelli, Regulatory Ramblings, The EU AI Act

Regulatory Ramblings: Episode 50 – Hong Kong to Dubai and Back Again Reflections on A Career in FinTech Ep with Syed Musheer Ahmed

Syed Musheer Ahmed has extensive experience in capital markets, fintech, and virtual assets, including a decade as a global markets trader before coming to Hong Kong to attain his MBA from the University of Hong Kong and London Business School’s joint program.

Since 2016, Musheer has contributed extensively to building the region’s fintech and virtual asset ecosystem, particularly as the co-founder and the inaugural general manager of the Fintech Association of Hong Kong.

For the last five years, he has been the managing director of FinStep Asia – a firm he founded to provide venture-building and empower cross-border bridges across Asia. In the interim, from October 2022 to January 2024, he served as a financial markets risk assurance lead as part of the foundational team of the Virtual Assets Regulatory Authority (VARA) in Dubai.

In this episode of Regulatory Ramblings, Musheer chats with host Ajay Shamdasani about his background, growing up in India’s information technology hub, Bangalore, his initial training as an engineer, and his stint as a regulator in the Mideast’s Manhattan.

As the discussion progresses, Musheer reaffirms his faith in Hong Kong as a place for FinTech and crypto entrepreneurs, discussing what it is about the city and the field that continues to attract and amaze him.

He also stresses that in the evolution of FinTech, the field has long since passed the nascent stage and is no longer all that new and glamorous since the advent of the iPhone in 2007 and Satoshi Nakamoto’s paper on Blockchain first released in 2009. Yet, he acknowledges that technological innovation continues, as he shares his thoughts on the regulatory approaches taken across Asia by mainland China, India, Singapore, and Hong Kong – and the similarities and differences between some of the major jurisdictions.

While virtual assets have evolved in some parts of the world, in others, they are still somewhat of a grey zone. Musheer also comments on the prospects for cross-border crypto regulation in the Asia-Pacific or even internationally evolving to harmonized rules, mutual recognition, or common passporting—as was discussed a decade ago for the investment funds sector.

He also shares his views on choosing between stablecoins and central bank digital currencies (CBDCs), which are not binary. Musheer emphasizes that it is not an either-or choice because both fulfill different purposes.

The conversation concludes with his assessment of the potential for Hong Kong and mainland China to collaborate with the Middle East’s FinTech and virtual asset hubs, such as Dubai.

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Tags fintech, Regulatory Ramblings, Syed Musheer Ahmed

Regulatory Ramblings

Regulatory Ramblings: Episode 49 – Digital Currencies and Public Law with Andrew Mazen Dahdal

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Post date July 19, 2024
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Dr. Andrew Mazen Dahdal is an associate professor at the College of Law at Qatar University in Doha. He received his Ph.D. from the University of New South Wales, where he received an Outstanding Achievement award in 2014 for his dissertation on the necessity of historical analysis in constitutional interpretation.

Andrew has also taught constitutional and commercial law in Australia and Europe full-time as an adjunct. Writing on law, technology, and global legal frameworks, Andrew is now focused on exploring the intersections between private and public law, specifically the technocratic connections between constitutional and commercial legal frameworks.

This episode of Regulatory Ramblings discusses his upcoming book, Digital Currencies and Public Law: History, Constitutionalism, and the Revolutionary Nature of Money. In it, he advocates for deeper engagement by public lawyers in digital currency developments that threaten dramatic changes in the relationship between individuals and government authorities.

As Andrew shares with our host, Ajay Shamdasani, no modern issue is more widely acknowledged and less understood than that of digital currencies. However, constitutional scholars’ voices must be included in the prevailing digital money conversation. For example, private law scholars grapple with the legal questions raised by digital currency models in property and contract. Alternatively, public law scholars have yet to appreciate the moment’s significance.

Andrew argues that the challenge of understanding the technical dimensions of digital money innovations has obscured the potential constitutional revolution that digital currencies represent. His book starts with the premise that ‘money’ is best considered a constitutional phenomenon. When seen in that light, it becomes clear that changes like money represent changes in political and constitutional arrangements.

The discussion elaborates on how and why that is so by examining historical episodes where the nature of money was linked to renewed constitutional settlements. The book distills a core set of principles linking aspects of monetary innovation, such as technical control of the money supply, to constitutional positions, such as executive fiscal accountability. From such principles, a conceptual framework is proposed that translates the specific attributes of digital currency proposals into the language of constitutional dynamics.

Andrew also recounts what it was about digital currencies that initially piqued his curiosity as a constitutional scholar and, ultimately, what compelled him to write the book. He also shares his thoughts on what he feels the book adds to an already crowded marketplace on the subject matter.

He concludes that cryptocurrencies and virtual assets herald an opportunity for wholesale constitutional reform the world has yet to see. Andrew notes that indeed, when it arrived on the scene, and its most ardent advocates were anti-statists, anarcho-libertarians—and even to some extent today—the rise of Bitcoin and digital assets writ large can be seen as a political movement in search of an ideology.

Looking back on the development of money, Andrew said every fiat currency has been a form of cash, albeit stripped of its intrinsic value. Moving forward, he said, there was no way to have a robust conversation about money and digital change without interrogating competing monetary forms.

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Tags Andrew Mazen Dahdal, Digital Currencies, Public Law, Regulatory Ramblings

Regulatory Ramblings

Regulatory Ramblings: Episode 48 – Defeating Money Laundering with Rational Thinking, Not Compliance Red-Flags with Mariola Marzouk (Vortex Risk Ltd.)

Dr. Mariola Marzoukis isan anti-money laundering (AML) professional with extensive experience in regulatory software and consulting across the public and private sectors. Her career has involved working with global banks on how to use technologies to address regulatory compliance demands.

In 2023, after completing her doctorate in criminal justice focused on trade-based money laundering (TBML) and technology, she co-founded Vortex Risk Ltd. with her colleague Dr Nicholas Gilmour (himself a guest on episode #18 of Regulatory Ramblings). The firm provides insights into money laundering practices to individuals and organizations worldwide. Vortex Risk’s approach empowers clients by offering perspectives akin to rational-thinking criminals operating discreetly to evade regulatory suspicion.

Over the course of her career, Mariola has held strategic product management positions at internationally recognized companies such as British Aerospace and Engineering (BAE) Applied Intelligence, EY, NICE Actimize, and Napier AI.

She specializes in financial crime prevention and has demonstrated expertise in detecting money laundering schemes using advanced technologies. Over time, her focus extended to the ever-growing specter of TBML, and her research in this area has garnered recognition within the industry. Mariola’s pilot study on Brexit’s impact on TBML has been published in the Journal of Money Laundering Control, featured on GTR News, and cited by the Institute of Export and International Trade UK.

In this episode of Regulatory Ramblings, she chats with host Ajay Shamdasani, describing her path from Poland to the UK, first as a student and now as a much sought-after financial crime professional in London.

The conversation underscores Mariola’s philosophy: defeating money laundering requires rational thinking and not merely compliance red flags. She eschews the notion of compliance as an exercise in perfunctory box-ticking and form-filing – a perennial lament in the profession.

She shares that her approach towards AML more generally is to precisely deploy RegTech to aid regulated entities in detecting criminality. While acknowledging that data analytics and artificial intelligence (AI) are essential tools in the battle against financial crime, she stresses that technology is not a panacea and works best when used in tandem with the skills, temperament, wisdom, and judgment that experienced professional researchers and investigators have developed over time. AI is no substitute for analysis by a human and good old common sense.

Mariola admits that while she does not have a background in science, technology, engineering, or math (STEM), her experience as a product manager and corporate strategist has afforded her insight into what customers need from technical solutions and a sense of discernment about when to apply which technologies, if at all. While not a techie per se, she has developed an understanding of technological development and how and when it should be deployed to solve specific problems. Ultimately, tools should meet the objectives of problem-solving, she says.

She recounts the various learning curves she experienced from the business side while coping with the more technical aspects of roles throughout her career.

The discussion concludes with Mariola stating her views on the prevailing hypocrisy in AML and sanctions enforcement. The financial world is all too often regulated from Washington, New York, London, and Brussels. Yet, while the US and UK are some of the most aggressive jurisdictions regarding financial crime enforcement actions, their regulatory apparatus is often used to further their geopolitical goals. It is a view outside of the West that Mariola says is not without merit.

Podcast Discussion

3:09 Mariola Marzouk’s Journey into Financial Crime

9:58 Combating Trade-Based Money Laundering: A Personal Pursuit of Restorative Justice

15:25 Disrupting the Norm: Money Laundering and Regulatory Realities

26:43 Unveiling Trade-Based Money Laundering: Beyond Trade Finance Myths

35:03 Technology in Regulatory Compliance: Unfulfilled Promises and Hidden Realities

41:08 The Disconnect and Challenges in Developing Effective RegTech Solutions

50:20 Challenges of Automation and Critical Thinking in Financial Crime Compliance

1:02:52 Assessing the Effectiveness of Sanctions Amidst Strategic Adaptations

1:06:34 Bridging Divides through Education

1:12:57 Gender Dynamics and the Future of Anti-Money Laundering

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Tags compliance, Mariola Marzouk, money laundering, Rational Thinking, Regulatory Ramblings

Regulatory Ramblings

Regulatory Ramblings: Episode 47 – The Biggest Bank Heist in History Is Coming with Linda Jeng

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Post date June 21, 2024
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Linda Jeng is a digital economy leader and strategist with over two decades of experience in FinTech, policy, and regulation. She is the founder & CEO of Digital Self Labs, a Washington D.C.-based Web3 advisory firm. Digital Self Labs is a cross-disciplinary advisory firm combining blockchain software expertise with policy and regulatory strategy.

Linda helps clients design and implement innovative solutions that empower individuals and enable interoperability, transparency, and efficiency in the financial and digital sectors.

She is also a renowned scholar and educator, with affiliations at Georgetown University Law Center, Duke University Law School, and the Bank for International Settlements. She conducts cutting-edge research and teaches courses on open banking, digital identity, and decentralized finance (DeFi). and has authored several publications and contributed to influential books on these topics. She is a frequent media speaker, commentator, and a Forbes contributor. Linda holds a J.D. from Columbia Law School and a master’s in EU and International Law from Université Toulouse Capitole. She speaks Mandarin Chinese, French, and essential German.

In this episode of Regulatory Ramblings, she talks to host Ajay Shamdasani about an op-ed piece she wrote, which Coindesk published entitled “The Biggest Bank Heist in History Is Coming.”

The discussion’s premise and focus are that regulators permit banks to tokenize financial assets such as bank deposits, U.S. Treasuries, and corporate debt. Yet, they want institutions to use permissioned networks rather than the decentralized blockchains that keep assets safe from hackers.

As Linda stated in her article: “In February, the Office of the Comptroller of the Currency’s acting head, Michael Hsu, announced plans for new rules on operational resilience for large banks with critical operations, including third-party service providers. Critically, what wasn’t discussed was that the rules would “treat the use of permissioned networks by the big banks to tokenize real-world assets and liabilities, an omission that neglects critical new vulnerabilities for the global financial system.”

A key theme of the conversation is that encouraging permissioned networks over permissionless blockchains will inevitably lead to cybersecurity attacks “on a scale previously unknown as the financial system moves to tokenize trillions of dollars worth of real-world assets and liabilities. The biggest bank heist in history is in the making.”

“By contrast, most successful crypto hacks usually involve centralized protocols where hackers only need to hack the admin keys of one or a few actors to gain control and steal digital assets. Similarly, permissioned networks are controlled by only a few parties so that they can be more easily hacked than blockchains maintained by thousands of validators. The concentration of attack vectors in the big banks that control these permissioned networks (or the central banks that control non-blockchain ledgers) is like sticking targets on their backs,” she said.

Linda discusses how she ended up in the legal profession, what drew her to digital assets as a scholar, and how she believes the worst attacks against banks are yet to come.

Podcast Discussion

3:51 The journey of the family rebel to empower self and community

12:34 Taking on the challenge of understanding the causes of the 2008 financial crisis

17:23 The Dodd-Frank Act is still relevant today

21:36 The role of Big Tech in the financial system is a significant issue

22:43 Fractional reserve banking: CBDCs and Stablecoins, design is key

24:37 The nature of money is changing—exciting times in FinTech

27:22 Tokenized real-world assets must be in the most resilient system possible

31:21 The security advantage of permissionless systems over permission systems

33:27 Seeing the parallels between tech and law: working in a cross-disciplinary way

37:28 Lawyers should have a seat at the product design table

38:42 The biggest regulatory challenge: a lack of understanding about the benefits of decentralization

40:40 Self-empowerment: Why web3 matters

42:09 The future web should restore personal control to identity and assets

45:01 Taking back our rights from Big Techs

48:42 It is an Exciting time to be studying law as technology fundamentally changes most things

50:41 AI, Google Search, and new tools: The need to change how we research and write

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Tags Digital Self Labs, fintech, Linda Jeng, Regulatory Ramblings

Regulatory Ramblings

Regulatory Ramblings: Episode 46 – Investigative Due Diligence and Why It Matters with Daniel Greenberg

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Post date June 7, 2024
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Daniel Greenberg is the founder, president, and lead investigator of Greenberg Corporate Intelligence, a Washington, DC-based boutique investigations firm that commenced operations in March 2023. The firm offers research and intelligence services for private-sector clients such as support attorneys, private equity firms, hedge funds, and compliance teams.

Dan has worked in the due diligence and corporate investigations field since 2010. Most recently, he was a managing director at Forward Risk, having previously worked at Kroll, Exiger, and TD International.

Beginning in 2018, Dan helped grow Forward Risk from a small, newly established company with a handful of employees to a premier firm with over 25 full-time investigators. Forward Risk was acquired in November 2022, and after a transition period, Dan left to establish his independent firm – GCI.

He has a track record of uncovering hard-to-find facts, overcoming difficult challenges, and providing responsive service. His experience has mainly centered on investigative due diligence, shareholder activism support, litigation support, and competitive intelligence.

Dan holds a B.A. in International Affairs from George Washington University and an M.A. in Middle Eastern History from Tel Aviv University. Dan is also a Certified Fraud Examiner (CFE #: 869765). Dan is licensed as a Private Detective in the District of Columbia.

The term due diligence is so often overused that in the present colloquial vernacular, it is used as a quick, easy, and usually lazy shorthand way of describing various background checks – varying from basic, perfunctory desk research to complete blown investigations.

To tackle such misconceptions, Daniel chats with Regulatory Ramblings host Ajay Shamdasani to clarify what “due diligence” entails while describing his own path as an entrepreneur.

Daniel shares his recollections about going to college in the US capital and later pursuing further graduate study – delving into the past of a long-troubled region in Israel.

The conversation goes on to delineate why investigative due diligence is (or should be) of paramount concern to the world’s largest banking and financial institutions and multinational corporations, as well as whether traditional backgrounds such as law enforcement, military service, or intelligence work are necessarily the best ways to get into such work in an age when many corporate investigators are ex-journalists or researchers.

Daniel stresses that his firm’s approach to such work is focused on using open sources, public records, and interviews to identify and understand fraudulent behavior and other risk issues.

The discussion concludes with a reflection on the tragic events following Hamas’ incursion into Israel on October 7, 2023, and Daniel shares his expertise on how, with all the intelligence and technology Israel had at its disposal, even it was taken by surprise.

Podcast Discussion:

3:09 From International Affairs to Due Diligence: Professional Journey

18:27 Mastering Google and AI in Investigative Due Diligence

26:46 The Role of Open Source and Public Records in Investigative Due Diligence

31:42 Defining Due Diligence: Beyond Background Checks to Comprehensive Accountability

39:01 Contextualizing Risks: Distinguishing Red Flags in Due Diligence Investigations

56:41 Challenges and Rewards of Starting a Firm in the Investigative Field

1:06:46 The Challenges of Intelligence: Israel-Hamas Conflict

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Tags Daniel Greenberg, Due Diligence, Regulatory Ramblings

Regulatory Ramblings

Regulatory Ramblings: Episode 45 – A Conversation with One of World’s Most Formidable Trial Lawyer with John B. Quinn

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Post date May 28, 2024
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John B. Quinn is the founder and chairman of the nearly four-decade-old Los Angeles law firm Quinn Emanuel Urquhart & Sullivan. The firm has been voted the world’s “most-feared law firm“ ten times by independent research provider BTI Consulting, which surveyed over 300 key legal decision-makers at the world’s largest organizations.

In BTI’s annual survey, when respondents were asked which law firm they least wanted to face as opposing counsel, Quinn Emanuel consistently ranked number one as the world’s most feared litigation law firm.

Since 1986, John and his partners have tirelessly built the largest law firms in the world devoted solely to business litigation and arbitration – a feat recognized by The Wall Street Journal as a “global litigation powerhouse.“ In that time, Quinn Emanuel has expanded to 35 offices in 12 countries on four continents, with over 1100 lawyers, generating more than $2 billion in revenue annually. In recent years, the firm has recovered over $80 billion for plaintiffs, a testament to John’s unwavering dedication to his profession.

John’s interests extend beyond the legal realm. For 33 years, he served as General Counsel to the Academy of Motion Picture Arts and Sciences, the organization behind the Oscars. He is also an avid mountain climber, Ironman triathlete, and father of five. His diverse pursuits reflect his multifaceted personality and provide a unique perspective to his legal career. He also hosts the popular podcast “Law, Disrupted”—www.law-disrupted.fm.

In this episode of Regulatory Ramblings, he chats with host Ajay Shamdasani about how he found his way into the legal profession, his representation of the Bank of China, Alibaba, AliPay, and Ant Financial—juggernauts on the mainland Chinese banking and fintech / digital payments scene—and his belief in Singapore’s importance as a dispute resolution center for the Asia-Pacific. He also comments on how Hong Kong stacks up against the Lion City.

The conversation also covers the business rationale for Quinn Emanuel Urquhart’s focus on pure litigation and for not representing the world’s largest money center banks, notwithstanding the deep pockets for premium legal services that the world’s most prominent financial institutions possess. This approach has won the firm many plaudits amongst the plaintiffs’ bar writ large.

John also shares his candid thoughts on Environmental, Social, and Governance (ESG) concerns at a time when such considerations in corporate operations and investing are under attack—often from prominent business figures. He also comments on what can be done on the policy and legal reform level to lure more foreign direct investment to the Middle East and Asia Pacific.

The discussion concludes with John emphasizing his commitment to the arts and philanthropy. He believes in giving back to society when one attains a certain level of success. His longstanding service to the Academy of Motion Picture Arts and Sciences and his initiative to open the Museum of Broken Relationships in Los Angeles are just a few examples of his dedication to philanthropy, which the audience can appreciate.

Podcast Discussion:

2:41 From Greenwich to Harvard: A Lawyer’s Path
5:07 The Competitive Nature of Litigation: Balancing Aggression and Strategy
6:52 Banking and Fintech in China – Insights
8:41 Litigation as a Last Resort: The Role of ADR and Mediation
10:35 Expanding in Singapore: Strategic Growth in International Arbitration and Regional Markets
14:57 Choosing Litigation Over Representing Major Banks
20:04 Do Investors Understand ESG? Challenges and Definitions
25:38 Common Law vs. Civil Law: Perspectives on Legal Systems and Business Growth
27:46 Passion for the Arts and Giving Back
31:57 Faith in L.A.: Embracing the Lifestyle Amid Economic Challenges
34:34 The Hollywood Incident: Will Smith and Chris Rock in the Spotlight
37:15 The Intersection of Law and Life: The Importance of Broad Interests in Litigation
39:51 The Best Preparation for Becoming a Lawyer
43:01 The Importance of Verbal Skills and Writing in Legal Practice
45:45 Burnout: Recognizing When Law Isn’t the Right Fit

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Tags John B. Quinn, Regulatory Ramblings, Trial Lawyer

Regulatory Ramblings

Regulatory Ramblings: Episode 44 – The Dangers of Non-Technically Trained Lawyers Advising on Technological Matters with Ronald Yu and Donald Day

Ronald Yu is the director and co-founder at MakeBell Limited. He is also a visiting fellow at the City University of Hong Kong’s (CityU’s) School of Law and a part-time law lecturer at Peking University.

As a scholar and author, his areas of interest are the nexus of law and tech: intellectual property (IP) and non-fungible tokens (NFTs), artificial intelligence (AI) and its legal ramifications, cross-border data flows across APAC, as well computer forensics. At The University of Hong Kong (HKU), he has taught courses on patents, as well as IP information technology. He has also lectured on FinTech at CUHK while also teaching courses on the commercialization of IP and patent law at CityU. He has also taught IP strategy at the Hong Kong University of Science and Technology and the Hong Kong Polytechnic University.

Donald Day is the chief operating officer of FinTech start-up firm VDX, which is building a digital asset ecosystem for institutional investors. He was also an in-house cryptocurrency/digital asset expert at Hong Kong’s capital markets regulator, the Securities and Futures Commission, where he helped shape the licensing regime for virtual asset trading platforms and designed and led the supervision of virtual asset fund managers and trading platforms.

In this episode of Regulatory Ramblings, Ron and Donald chat with host Ajay Shamdasani on the potentially pernicious consequences of non-technically trained lawyers – specifically, those without degrees or substantial experience in science, technology, engineering or math (STEM) – offering advice in situations where technology is either implicated or at the core of the matter. The law can be unforgiving to those who are ignorant of its often arcane ways, and ultimately, it is clients who pay for what lawyers either do not know or assume the guests share. In an age of AI, machine learning, and large language models (LLMs) – they do not go as far as to say lawyers need to learn how to code, but counsel needs to understand the practical legal, business, financial, and reputational implications of such technologies for their clients.

Technology can, at times, change the rules of the game, Ron and Donald stress. Yet, they also point out that sometimes lawyers suggest contractual terms that are legally feasible but, based on current technology, impractical – such as the Bitcoin 10-second consensus period, a performance requirement that is not possible to do. As our guests explain, if there are terms in a contract that are unworkable, it could lead to a lawyer killing a deal either out of ignorance of the underlying technology or a lack of commercial acumen.

The discussion moves onto how rare it is to find those who are technically trained and also licensed practicing lawyers. Clearly, the more technical a subject, the less likely an average dispute resolution practitioner at the typical multinational, Anglo-American law firm is going to be up to the task. Our guests acknowledge that leaves clients with a very narrow field of specialists to choose from if they want to be represented by lawyers who understand both the law and the underlying technology involved.

Yet, as Ron Yu notes, even ‘non-techies’ can get up to speed by educating themselves, pointing to the living example of US federal judge Randall R. Rader—as has been the case with FinTech and cryptocurrencies.

Lawyers often view technology through the lens of its legal and regulatory compliance implications, with less focus on its implementation. How it will work and how and where best to use it is an afterthought. As for cybersecurity, it is regarded as an IT issue, they say. If a lawyer overlooks cybersecurity issues, Yu said, then they are glossing over important technical details that can harm a client.

The conversation concludes on the point that when it comes to ‘tech lawyers’, it certainly seems that, generally speaking in APAC, those practitioners that market themselves well have the biggest platforms and the loudest voices and are, therefore, regarded as authorities in their respective fields.

Clearly, there are times when the right kind of technical background is not substituted. For example, as Donald Day recalls, patent litigators do not infrequently have to deal with solicitors who don’t understand the tech, and those solicitors soon become a hindrance.

Both guests underscore the lingering perception that it is not ideal to engage in IP-related litigation in Hong Kong because of the lack of talent; even if a specialist carefully explains something to a solicitor, the latter will invariably get it wrong or simply not understand the subject matter.

Podcast Discussion:

03:24 Intersecting Realms: Non-Technical Lawyers and Technical Expertise in Legal Practice
09:02 Deciphering the Code: The Role of Legal Practitioners in an Increasingly Technical World
17:45 Tech Literacy for Lawyers: Navigating Smart Contracts and Beyond
25:32 Tech Savvy and Legal Deals: Avoiding Pitfalls
40:17 Beyond Technology: Complex IP and Financial Considerations in Legal Practice
45:08 Balancing Expertise and Common Sense in Legal Proceedings
54:13 Ensuring Legal and Technical Competency in Virtual Asset Licensing
1:04:11 Adapting to Change at the Intersection of Law and Technology in Fintech

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Tags Donald Day, Regulatory Ramblings, Ronald Yu

Regulatory Ramblings

Regulatory Ramblings: Episode 43 – Why ESG Matters? With Jon Solorzano

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Post date April 26, 2024
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Jon Solorzano is a Los Angeles-based attorney who serves as counsel and co-head of the environmental, social, and governance (ESG) task force at the law firm of Vinson & Elkins. Prior to this role, he served as senior director for legal and corporate development at the Clorox Company.

Beyond ESG, Jon is also a highly sought-after thought leader with significant expertise in related fields such as M&A, corporate governance, securities regulation, corporate and business development, consumer products, technology, human capital management, business financial strategy, and international matters for both high-growth start-ups and established Fortune 500 companies.

Few topics are as vexatious and polarizing in contemporary times as the acronym ESG. Legendary investors such as Warren Buffet and his second-in-command, the late Charlie Munger, along with other prominent corporate and finance figures, argue that ESG should not be a consideration in investment decisions.

Against this backdrop, Jon discusses with Regulatory Ramblings host Ajay Shamdasani why ESG matters to investors, companies, and society, alongside corporate social responsibility (CSR) and diversity, equity, and inclusion (DEI). He stresses that while these concepts and movements are related and overlap to some degree, they are not necessarily the same thing. Indeed, Jon notes that those who coined the term ESG might have garnered more support for their cause had they emphasized (G)overnance rather than (E)nvironmental, as even skeptics of global warming can appreciate the importance of well-governed companies and how that affects share prices.

Jon also shares insights into his upbringing, background, and path into the legal profession, as well as how, as a transactional lawyer, he ended up leading his firm’s ESG practice.

While acknowledging the concerns of ESG detractors and naysayers, Jon predicts that 10-15 years from now, the nature of the debate and discussion will be very different. By then, few will even question the importance of ESG to the world’s well-being, he says, as millennials and Zoomers take over the reins of society in developed countries.

A telling sign that Jon’s predictions are accurate is that for younger investors, ESG definitely matters as a yardstick in gauging what constitutes a socially conscious and sustainable investment.

The conversation concludes by examining the extent to which ESG mandates intersect with financial regulation, and why banking and financial institutions globally need to take ESG as seriously as their regulatory compliance and risk management requirements.

Podcast Discussion:

02:01 A Journey through Corporate Law and Stakeholder Engagement
08:05 Unveiling the Complexity: ESG vs. CSR in Corporate Responsibility and Investor Value
20:20 Exploring the ESG Backlash: Understanding Perspectives on Investor Value and Corporate Responsibility
25:01 Corporate Indifference: The Evolution of ESG Amidst Regulatory Pressures
32:59 ESG in a World of Socio-Economic Uncertainty and Geopolitical Tumult
36:28 How do you rebrand ESG: Adapting Perception and Purpose in Corporate Sustainability?
41:26 Insights into the Intersection of ESG and Financial Regulation
44:22 Generation Shift: The Future Landscape of ESG
48:31 The Evolving Role of Professionals in ESG Decision-Making
52:41 Solorzano: Assessing a Practitioner’s Journey in the Evolving ESG Landscape

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Tags ESG, Jon Solorzano, Regulatory Ramblings

Regulatory Ramblings

Regulatory Ramblings: Episode 42 – The Intersection of Digital Assets and Data Protection with Jonathan Crompton

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Post date April 12, 2024
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Jonathan Crompton is a partner at the law firm Reynolds, Porter & Chamberlain (RPC), based in Hong Kong. There, he helps companies and individuals navigate complex cross-border disputes and investigations involving their Asian operations. He specializes in commercial matters (particularly for the retail industry), financial services, technology-related disputes, and cyber incidents.

As the lead for RPC’s ‘ReSecure’ cyber incident response service in Asia, he advises local and multinational clients on cyber-attacks, data privacy, and law enforcement investigations. He also helps clients worldwide recover money transferred to Hong Kong bank accounts as a result of cyber and other frauds.

Jonathan advises on all forms of disputes, including litigation before national courts and arbitral tribunals operating under various rules (in particular, the HKIAC, ICC, and UNCITRAL) and on investigations by regulators (notably financial services regulators such as the Securities and Futures Commission). His clients include senior individuals, asset managers, and leading multinational corporations and brands. As a result of RPC’s predominantly ‘conflict-free’ model for financial services disputes, Jonathan represents senior individuals and companies in claims brought by or against leading banks where other firms are often unable to act.

He is also a founding member of the Hong Kong chapter of the Crypto Fraud and Asset Recovery (CFAAR) network, the first global association for such professionals. The London chapter was launched in London in 2021, and the Hong Kong chapter was formed in August 2022.

In this episode of Regulatory Ramblings, Jonathan chats with host Ajay Shamdasani about his background, upbringing, and how he ended up in the legal profession. The bulk of the conversation, however, is devoted to data protection and digital assets, specifically the February raid of the offices of WorldCoin by the Hong Kong Office of the Privacy Commissioner (PCPD). They discuss the PCPD’s expression of concern about WorldCoin’s collection and storage of iris scans in exchange for its WorldCoin token (WLD).

As Jonathan points out, the case was a clear example of the increasing intersection of personal data protection principles and digital assets. The conversation also covers his recent LinkedIn post in which he stated that Privacy Commissioner Ada Chung’s action was further proof that she was flexing her existing powers—even before the amendments to the territory’s Personal Data (Privacy) Ordinance are expected to be enacted within the next year.

They also discuss the shape Jonathan envisages those amendments taking, the recent cases he has seen in his practice involving virtual assets, digital contracts, and cybersecurity, and related emerging methodologies, trends, and themes.

Podcast Discussion:

3:01 Journey from Military Roots to Legal Frontiers
11:00 Perspectives on Legal Specialization in the Virtual Asset Sphere
20:52 Understanding Cryptocurrency Fraud and Legal Challenges in Recovery
29:16 Assessing the Efficacy of Asset Tracing Rules in Cryptocurrency Fraud Cases
38:12 Money Mules, Cybercrime, and the Evolution of Financial Fraud
42:48 Complexities of Cybercrime and Deepfake Deception in Financial Fraud
45:29 Insights into Crypto Regulation and Risk Management from CFAAR
59:34 Intersection of Personal Data and Digital Assets: Insights from WorldCoin and NFTs
1:05:52 Personal Data Privacy: Insights into Legislative Amendments and Regulatory Enforcement in Hong Kong
1:17:01 Adapting Legal Careers to Emerging Technologies, Change and Uncertainty

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Tags data protection, digital assets, Jonathan Crompton, Regulatory Ramblings

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