From crypto busts and scandals to the bursting of the SPAC bubble, 2022 was a wild time in the world of finance. It also marked the first full year on the job for President Joe Biden's watchdogs.
It's no secret that executives don't always share the same views as their regulators. So as Wall Street waits for the ball to drop in Times Square, here's a scorecard from Washington on some of the biggest winners and losers of 2022:
WINNERS
Crypto Skeptics
The nation's capital has dramatically soured on crypto. After a string of scandals, pressure to return political donations tainted by the still unfolding FTX drama and average investors losing a ton of money, it's hard to avoid hearing a collective "I told you so," from crypto skeptics.
Backers of the tokens are still in Washington, but the lavish riverfront parties and photo ops with eager politicians are over — at least for now — as crypto lobbyists play defense.
The shift couldn't come at a worse time for the industry as lawmakers ready legislation to directly target the asset class. Senate Banking Committee Chairman Sherrod Brown, a long-time skeptic, has expressed a desire to create a broad regulatory framework.
Compliance Consultants
After a mostly dormant Trump administration, costly corporate monitorships returned in enforcement settlements with U.S. authorities. The shift made 2022 a banner year for those who make their livings policing behavior at corporate firms.
In a high-profile string of cases, Wall Street banks agreed to hire compliance consultants to do deep-dives into their policies and procedures for communications, in addition to paying hefty fines to settle allegations that bankers used WhatsApp and other unapproved platforms to do business.
Separately, Glencore Plc agreed to bring on board an independent monitor for three years in addition to paying $1.5 billion to settle U.S., U.K. and Brazilian probes into bribery and market manipulation allegations.
Meanwhile, Deutsche Bank AG had to keep a monitor in place longer following an issue related to environmental, social and governance criteria at the lender's asset-management arm.
Activist Investors
Investors seeking to influence how companies behave and who they have in the C-suite are poised to wield new powers in the 2023 proxy season. The Securities and Exchange Commission has changed rules to open up proxy ballots and let directors backed by management and those by investors to more directly compete for the same seats.
The "universal proxy ballot" undercuts the longstanding practice of only letting investors back a slate of nominees. Other SEC proxy changes are expected to make it easier for investors to put issues with social significance up for a shareholder vote, potentially setting off a tsunami of new ESG proposals.
Chinese ADRs
Companies from Alibaba Group Holding Ltd. to JD.com Inc. got a reprieve this month when US regulators said they had been able to inspect the audit work papers of companies based in China and Hong Kong.
About 200 companies had been facing an acute threat of being booted off the New York Stock Exchange and Nasdaq markets. After months of high-stakes drama, the threat ebbed after the US Public Company Accounting Oversight Board said its inspectors had gained sufficient access to audit documents on companies in China and Hong Kong for the first time.