Mediaboss Marketing

Follow Leyu, says Chelsea captain Cesar Azpilicueta in a slick promotional video to mark a new commercial agreement between the European champions and Leyu Sports.

You would be forgiven for not having heard of the company, an obscure Asian gambling firm with little to no digital footprint outside of eye-catching sponsorship deals with Chelsea and Paris Saint-Germain.

And listening to Azpilicuetas instruction and following Leyu on the social media website LinkedIn only leads down a bizarre rabbit hole of fake profile pictures, deleted accounts and a seemingly non-existent branding agency.

It is a rabbit hole that raises serious questions for Chelsea who help beam Leyus branding around Stamford Bridge, seen across the world as well as many other European football clubs.

At a time when the spotlight is on footballs uneasy relationship with gambling, Premier League clubs including Aston Villa, Burnley, Everton and Southampton have signed deals with similarly obscure Asian betting companies.

These firms are often represented by untraceable individuals, which in some cases encourage users to expose themselves to cybersecurity risks in order to use their products.

Original post:
Revealed: The obscure gambling firms with untraceable employees working with your football club - The Athletic

Just like the rest of us, the financial services industry wasn't immune from the numerous and unprecedented pandemic-related challenges over the past year. Through our annual Financial Markets Litigation and Enforcement Symposium Series, we were able to take a deeper look at the state of futures, trading, and securities regulatory and enforcement trends.

Along with our guest speakers, we examined the latest in gamification, the role of next-gen traders, the impact of dramatic growth of assets under management, and the regulation of virtual currencies and digital assets. We were also briefed on the significant diversity and inclusion efforts by financial institutions.

In this review, we share our key takeaways, trends to watch, and predictions for the months ahead.

Market Trading: Why Regulator Activity Is Expected to Accelerate

Gamification tactics and investment advice from social media influencers and chat rooms are disruptive technologies and behaviors capturing the attention of regulators in 2021 and forcing them to take a closer look and react. For the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC), the question becomes how far this new generation of investors should be allowed to take advantage of these new tools, apps, and free trades, and what guardrails need to be in place to protect investors and ensure market integrity? The consensus is that we can expect regulatory guidance to accelerate in 2022.

In discussing developments in best execution and payment for order flow, disruptive technology, a new generation of traders, we highlight five topics to consider.

A New Generation of Investors Are Making Their Mark

In 2020, one clearing firm reported opening six million new accounts, a 137 percent increase over 2019. One million of those new accounts were from Generation Z with an average age of 19 years old. With so many more people interested in market trading, and a significant number of whom are taking guidance from social media, it should be no surprise that 2021 delivered some unexpected developments. Among them was the GameStop trading frenzy fueled by social media platforms and socioeconomic undertones.

On the Reddit internet chat board "WallStreetBets,"retail investors reveled in the knowledge that GameStop, a dying breed of brick and mortar video game stores, was shorted heavily in 2020 and vulnerable to a short squeeze. Wanting to "stick it to"hedge funds, Wall Street, and the "1%,"these new investors encouraged each other to buy the stock and push it up further. The activity caused a massive price surge up 928 percent during the first few weeks of 2021 and effectively forced short sellers, including large hedge funds, to remove their short positions and buy shares. In turn, the run-up led to unprecedented market volatility and resulted in some significant losses for large investors.

In the wake of the GameStop run-up, clearing houses and brokerage firms began pointing fingers at one another. But an October report issued by the SEC after congressional hearings on the matter concluded that the price surge was in fact caused by a large group of individual retail investors taking cues from social media. Although the report did not make specific policy recommendations, regulators are expected to eventually respond.

'Fin-fluencers'Are Getting Mixed Reviews

Following in that same vein, 2021 saw a significant uptick in the number of social media influencers entering the financial space. In general, social media influencers have established credibility in a specific industry, have access to a huge audience, and can persuade others to act based on their recommendations. Though influencers have been around for some time, financial influencers are fairly new.

"Fin-fluencer"social media activity runs the gamut from pitching stocks on the rise and how to get-rich-quick schemes to sharing educational material or personal stories. On the up-side, some believe fin-fluencers fill a gap in financial literacy, despite most lacking formal qualifications. On the downside, there is a lack of transparency regarding risks associated with products and investment strategies they recommend and the potential for pump and dump schemes.

Further, with fin-fluencing growing, more firms are adding them to their marketing mix. There is no better way to reach the new generation of investors than through social media. Firms and broker-dealers are using (and paying) fin-fluencers to talk about stocks and services on their behalf. Regulators are now looking into broker-dealer practices and have issued requests for information, asking for a detailed history of relationships with influencers, how they first identified them, how they are compensated, and any referral agreements they may be engaged in. The inquiry letters also give several pages to privacy concerns regarding sharing client information with influencers. This is certainly a ripe area for more regulation and guidance in the near future.

Gamification Is Playing Havoc With Traditional Regulatory Rules

Closely related to fin-fluencing and chat room investment advice is gamification, also known as digital engagement practices. Similar to a fitness tracker, investment apps using gamification tactics can track the individual's trading activity and encourage trades, sends alerts, use a leaderboard and reward the user with badges when they reach certain milestones. The regulatory issues involved are numerous. For example, is an app that encourages an investor to trade considered a broker recommendation that falls under regulated activity? We expect FINRA and the SEC to issue more guidance on gamification in the near future.

Payment for Order Flow Is Drawing Added Scrutiny

PFOF, which over time has survived calls for banning the practice, has faced renewed scrutiny that could result in rule changes or even barring the practice altogether in 2022. The renewed scrutiny followed the market volatility created by the meme-stock frenzy in 2021. In October, SEC Chairman Gensler said that the agency is indeed looking into whether PFOF should be changed or barred, with the objective being to create a more competitive marketplace.

Drawing additional scrutiny in 2021, is the growth in size of payments received by retail brokers for their retail order flow. During the first three quarters of the year, PFOF grew by 41 percent compared to the same period in 2020. A large percentage of that increase is tied to options trading and regulators are concerned brokers are encouraging retail investors to jump into these complex derivative markets without understanding the risk. Commissioner Gensler suggested that the Commission could propose new rules in the near future.

Securities: Four Asset Management Trends Amid Exponential Growth

When the United States Investment Company Act and the Investment Advisers Act of 1940 came into force, assets under management were a mere $1 billion. Sixty years later they topped $20 trillion, and by the end of 2020, they skyrocketed to $110 trillion. Along with the considerable increases in the United States economy and markets, the industry is experiencing dramatic growth and success. In just the past seven years, from 2013 to 2020, the number of registered investment advisors grew by 50 percent.

So, where is this success originating? The answer lies among the increasing popularity of exchange traded funds (ETF), particularly the new Bitcoin futures ETF, the SEC's big wins, and rule changes for asset managers.

Where Growth Is Trending2020 performance shows that, while still the largest single asset group, hedge funds were static, and private equity funds, once a growing segment, were flat. However, the asset management sector is showing serious growth, primarily from three distinct areas: robo-advisors, separately managed accounts from individuals, and venture capital funds. Overall, private funds comprised approximately $20 trillion of the total $110 trillion in assets under management in 2020.

Globally, registered funds tallied about $60 trillion, with United States registered funds accounting for roughly half that number, holding 30 percent of public company equity, 23 percent of public company debt, and almost 30 percent of municipal bonds. Nearly 61 million Americans now have a substantial percentage of their retirement savings invested in registered investment companies.

Of peculiar note, 2020 saw a pandemic-fueled exodus of people from the Northeast, California and Illinois home to numerous regulated entities to states such as Texas and Florida. If this trend continues, we're likely to experience a dramatic sea change in where investment advisors register their principle place of business.

Exchange Traded Funds Take Center StageAfter more than eight years of stops and starts, on October 19, the SEC approved the first-ever Bitcoin-linked ETF, the ProShares Bitcoin Strategy ETF. The launch marked one of the biggest of all time, with the Bitcoin futures ETF accumulating more than $1 billion in assets over the first two days. Notably, the Bitcoin futures ETF gives institutional investors exposure to bitcoin but through the more-regulated futures market bitcoin futures contracts rather than bitcoin. Proponents of Bitcoin and the cryptocurrency industry, more generally, hope cryptocurrency-linked ETFs will increase the industry's legitimacy through broader exposure and adoption.

While other cryptocurrency-linked ETFs are eager to launch, the SEC indicated it was not ready to approve leveraged Bitcoin ETFs or spot market-based Bitcoin ETFs, largely over concerns that investors may take ill-informed risks and lose significant sums of money. However, because Canada has already approved a spot market-based Bitcoin ETF that has been operating for several months, there is pressure on the SEC to reconsider its approach. Notwithstanding such pressure, the SEC recently rejected yet another application for a spot market-based Bitcoin ETF, this time filed by Cboe BZX Exchange to list and trade the VanEck Bitcoin ETF.

Not to be overshadowed by the Bitcoin futures ETF, both traditional and non-traditional ETFs continue to be attractive for most investors, which are relatively inexpensive and tax efficient. In fact, many analysts believe that the Biden Administration's proposal to increase US capital gains taxes should fuel further interest in ETFs as opposed to mutual funds, with a few caveats. Non-traditional ETF performance over time can be magnified in volatile markets. For firms, regulators continue to pursue disciplinary actions relating to the sale of non-traditional products to retail investors and advise heightened monitoring processes, carefully drafted disclosures, and adequate training for brokers and supervisors regarding risks going forward.

Why The SEC Is WinningThe overall consensus is that the SEC is winning big and advisors can expect more pain next year. Several significant court rulings affirm or increase the SEC's power.

In October, the US Court of Appeals for the Fifth Circuit upheld a disgorgement order issued by the SEC, marking the first appellate ruling on the topic since the Supreme Court's Liu decision (Liu v. SEC.) in 2020. The ruling allows the SEC to continue to seek disgorgement as a remedy in federal courts. The impact of Liu is not so much an issue of whether the SEC may obtain disgorgement but under what circumstances it may obtain such relief.

In another 2021 win for the SEC, the Supreme Court denied a petition for a writ of certiorari by a broker dealer involved in an SEC suit for violating anti-money laundering rules, leaving in place the Second Circuits ruling affirming the authority of the SEC to enforce certain Bank Secrecy Act requirements under the Exchange Act.

Also, in the past year, courts have rejected challenges to the SEC's "gag rule."The SEC's "gag rule"provides that when a party settles an SEC enforcement action, the party cannot deny the allegations after the settlement. The gag order is written into every settlement agreement and the settling party must agree to the gag order. Two recent challenges to the rule failed, all but rendering future challenges to the gag rule dead. In both cases, courts refused to invalidate the gag rule, finding that if the settling party did not like the terms of the settlement, it should not have settled in the first place.

Rule Changes Drive Disclosure ActivityNew rules, collectively referred to as the "Marketing Rule,"went into effect in May and dramatically change advertising and solicitation practices for investment advisors. Investment advisers have until November 4, 2022 to comply.

Additionally, the SEC approved a Nasdaq listing requirement where public companies must disclose the diversity of their boards. Public companies without a diverse board must explain why. SEC Chairman Gensler is also considering such disclosure requirements for money managers and brokers.

On the ETF front, Rule 6c-11 provides certain ETFs with exemptions from the 1940 Act and also imposes the following conditions: (1) ETFs must provide a daily portfolio transparency on their website; (2) ETFs are permitted to use baskets that do not reflect a pro-rata representation of portfolio funds if they have certain written policies and procedures in place; and (3) ETFs must disclose certain other information on their website, including historical information regarding premiums and discounts and bid-ask spread information.

Futures: Emerging Trends and Enforcement Priorities

Priorities relating to swap dealer matters, exchange enforcement and CFTC enforcement lead discussions, with three takeaways to note.

Enforcement Is 'Business as Usual'

In the wake of Covid-19, enforcement actions across the financial markets were surprisingly "business as usual."The focus continues to be on preserving market integrity. Despite some ebb and flow, 2021 saw the usual numbers and types of cases, including actions involving: swaps market manipulation; spoofing; wash trades; insider trades; and swap reporting failures. With respect to swaps reporting failures in particular, the CFTC brought and settled five swaps manipulation enforcement cases in 2021. Supervisory practices and digital currencies continued to garner attention from regulators in 2021.

Rounding out the state of enforcement activity in 2021, efforts to coordinate investigations across agencies and exchanges continue. Although each regulator and exchange has a different mission, communicating on joint investigations and resolutions benefits all. Similarly, the CFTC and others continue to enhance regulatory outreach and education, and as well as improving internal capabilities to flag suspicious activities for further investigation.

Swap Reporting Failures Continue to Be a Top Enforcement Priority for the CFTC

While the CFTC understands that no reporting party will accurately and timely report swap data to a swap data repository 100 percent of the time, the CFTC's recent swap reporting enforcement actions against several swap dealers and for the first time a swap execution facility, highlight the fact that the CFTC continues to view swap reporting failures as a top enforcement priority. The CFTC has repeatedly noted that swap reporting is essential to its swap market oversight function. For that reason, swap reporting parties need to continue to assess and improve their swap data reporting systems, compliance framework and governance.

Not all swap reporting failures tend to become the subject of enforcement actions. Analyzing the facts of the CFTC's various swap reporting cases over the last eight years reveals that certain failures may likely result in an enforcement action. These failures include: the same or substantially similar root cause failure being repeated over a multiple-year period; substantially late reporting; missing data fields that the CFTC considers critical (i.e., creation data); the lack of (or a deficient) supervisory and governance framework focused on swap data reporting; and high volumes of reporting failures overall (i.e., in terms of a gross number) or as a percentage of the reporting party's total number of swaps reported.

To avoid a reporting failure turning into a potential CFTC enforcement action, reporting parties should: promptly identify and remediate any reporting failures through reconciliation and review of swap data at each SDR to which the reporting party reports; after any remediation, follow-up to ensure that any past failures do not resurface; and maintain a comprehensive swap data reporting compliance framework that includes active governance. Where significant reporting failures are identified, a reporting party should consider whether self-reporting to the CFTC would be appropriate.

Who Oversees Virtual Currencies, Digital Assets and Decentralized Finance (DeFi)

Jurisdiction and enforcement cases regarding virtual currency markets continues as a hot topic among regulators and participants. The Commission, which brought its first crypto-related enforcement action in 2015, handled several important crypto-related enforcement cases in 2021, including the first manipulation case a pump and dump scheme that used Twitter to tout a certain cryptocurrency. The CFTC also brought or settled various actions alleging the entities offered margined retail commodity transactions or binary options in digital assets without properly registering with the CFTC.

Regulator jurisdiction with respect to decentralized finance, or DeFi, a blockchain-based form of finance is being examined by regulators such as the CFTC and SEC. CFTC efforts to become more knowledgeable in the digital asset space continue. The agencies can be expected to proceed if one of them concludes that an appropriate enforcement case has arisen.

In November, the President's Working Group on Financial Markets issued an interagency report urging Congress to pass legislation to make stablecoins, a class of cryptocurrencies that attempt to offer price stability and are backed by a reserve asset, to be subject to federal banking laws. The regulators also asserted that they would use their current jurisdictional authorities to monitor the stablecoin market. The report also described the growing market for stablecoins and also discussed DeFi-related issues.

We expect the CFTC and exchanges to continue to be active in all of these areas in the future. We also expect 2022 to deliver more collaboration to foster responsible innovation, promote consistent regulatory approaches, and identify and address potential risks that arise from digital trading and financial assets.

D&I Update: What Financial Institutions Are Doing to Move the Needle on Diversity

In 2020, during the midst of the Covid-19 pandemic, a rapid succession of events forced Americans to take a hard look in the mirror regarding systemic racism. Profound national conversations ensued. Many in the financial services industry published statements emphasizing their commitment to diversity and inclusion, but few statements did what 12 general counsels were able to accomplish in September 2020.

In an open letter addressed to the legal community, general counsels of some of the world's largest financial institutions came together to not only discuss the violence against the Black community and their commitment to diversity and inclusion, but more importantly, to set an example by providing an action-driven statement.

Law firms and financial institutions in the United States have made progress with respect to women and people of color representation, but these populations remain starkly underrepresented, particularly in senior level positions. For example, women and people of color make up approximately 47.5 percent and 26.5 percent of law firm associates in US law firms, respectively, according to a McKinsey & Company study in 2021. However, Black women and Latinx women each represent less than 1 percent of all partners in US law firms, the National Association for Law Placement reports. In a study of 44 of Americas largest banks, minorities made up approximately 42 percent of the banks'workforce in 2018. That representation dropped precipitously at the executive and senior level positions for the banks the study found that minorities accounted for only 19 percent of executive and senior level employees. This significant drop in representation at senior levels is also seen among women in the financial services industry.

During our FMLE Symposium, four representatives of the open letter's 12 signatories weighed in on initiatives implemented and lessons learned over the last year in the context of the financial services industrys commitment to three pillars: (1) internal actions, (2) external supplier engagements and (3) social action efforts to increase diverse representation and retention. The candid discussion covered initiatives and actionable steps that can be implemented by the financial services industry and legal profession to continue to increase diverse representation in the financial services and legal profession.

Pillar 1: Internal Action recruitment, retention and promotion of diverse attorneys

Recognizing that diverse representation cannot happen without meaningful consideration of qualified diverse candidates at the recruitment stage, law firms and companies have increasingly begun to formally expand their consideration of a broader pool of candidates. For example, the Mansfield Rule, which was created to increase diversity in law firm recruitment and promotion, requires that law firms seeking to achieve certification under the rule to consider women and attorneys of color for at least 30 percent of leadership and governance roles, equity partner promotions and senior lateral positions. In the more general corporate context, the Nasdaq Board Diversity Rules, approved in August, require Nasdaq-listed companies to publicly disclose statistics concerning board diversity and, most notably, to have, or publicly disclose why they do not have, at least two diverse directors.

In order to ensure that such consideration of diverse candidates translates to the hiring of more diverse employees, law firms and financial institutions can implement various initiatives. For example, strong diverse candidates who are not hired for a current opening, can become part of a pool of candidates considered for future openings. Law firms and financial institutions can take it one step further by shifting their respective organizations'perspective on hiring. Instead of rejecting a candidate, particularly a diverse candidate, because they do not possess the exact qualifications needed for an open position, an organization can foster an apprenticeship environment to train and improve candidates'skills in required areas. This approach, can not only increase the recruitment of diverse candidates, but also their retention, by ensuring high-level leaders are involved in the training of diverse employees and providing them opportunities to build cross departmental skills and relationships.

Pillar 2: External Action Measuring staffing, advancement and leadership of diverse employees

The impact that in-house attorneys at global and local companies can have on diverse representation present at their law firm partners cannot be understated. Setting the expectation that the staffing of diverse associates is a critical consideration when selecting law firms, along with other criteria, can drive law firms to ensure diverse associates are involved in all aspects of new matters. Some organizations review various metrics and other information to assess representation and engagement of diverse associates in law firms, such as requesting their law firm partners to conduct self-evaluations of their internal culture and community outreach efforts to ensure that diverse associates included on the team have substantive roles in the engagement.

When law firm partners are underperforming with respect to the diversity efforts in staffing, promotion and retention of diverse associates, some organizations have committed resources to help them improve. Indeed, as law firms improve their efforts concerning diversity and inclusion, their success can be shared and drive others to adopt their best practices.

In-house attorneys can also create connections between their organization and diverse associates in law firms to increase opportunities for diverse associates to develop client relationships. Some institutions are developing mentorship programs that match mentors from their organization with diverse associate mentees from their law firm partners, to assist diverse associates in navigating career challenges.

Pillar 3: Social Action pro bono, racial injustice and community initiatives

In order to significantly increase diverse representation in the financial services industry, law firms and in-house counsel cannot merely focus on the recruitment of diverse law school candidates, but instead must drive interest and engagement among students from diverse backgrounds at an earlier stage. Some organizations have created internships and programs that expose diverse students in high school or earlier to the financial services industry to demystify financial markets, products and other unfamiliar legal topics. These programs further instill in diverse students, at an early age, that diverse attorneys can and do succeed in the financial services industry.

In terms of recruitment and engagement, law firms and in-house legal counsel need to continually evaluate the types of colleges and universities they consider for positions. For example, institutions can meaningfully consider diverse candidates from Historically Black Colleges and Universities, for mentoring, recruitment and other programs. Expanding the field of applicants that are considered, will foster an environment in which diverse employees in law firms and in-house legal departments feel welcome and valued, ultimately increasing representation and retention of diverse employees in the financial services profession.

The impact of the pandemic has also created an increased need for communities, especially among ethnic and immigrant communities, for pro bono legal assistance. Being able to provide pro bono legal services remotely, via various platforms and programs, has allowed in-house counsel and law firms to expand their reach to the communities they are able to serve. In particular, in light of recent events, some organizations have also focused their pro bono efforts on racial injustice and providing resource pipelines to underrepresented groups.

What's ahead?

Looking to the future, we can expect in-house counsel to continue to make diverse staffing and representation, at the pitch stage and throughout the engagement, a priority in selecting law firms for new matters. Institutions can also continue to focus on discrete areas concerning diversity and inclusion, including taking a more intentional approach to their internal development of diverse employees and continuing to train on implicit bias and management skills. As institutions improve their diversity and inclusion efforts, other institutions need not recreate the wheel, but instead can adopt the successful initiatives in their own organizations, to create widespread improvement in the financial services industry.

Editor's Note: This advisory is an edited compilation of our coverage of Katten's 2021 Annual Financial Markets Litigation and Enforcement Symposium Series.

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Financial Services Industry Year in Review: Regulatory Enforcement and Litigation Trends in 2021 and Beyond - JD Supra

In 2020, as the world shut down to insulate against COVID-19, a disturbing side effect of the pandemic began quietly taking root in some corners of the world: democratic backsliding and growing autocracies.

While the news worries freedom lovers everywhere, democracy could rebound once governments lift their health restrictions as soon as the pandemic ends. So says V-Dem, a Swedish nonprofit that tracks the health of democracies across a variety of indicators.

While some nations have seen a significant deterioration of freedoms during the past 18 months, the pandemics direct impact on the vitality of democracy itself has so far been limited, it says. But those who run Washingtons top global development organizations arent waiting to sound the alarm.

More people are struggling for democratic rights and freedoms around the world than really ever since the fall of the Berlin Wall in 1989, Daniel Twining, president of the International Republican Institute (IRI), told me in a recent episode of Democracy! The Podcast.

Twining argues that democracy doesnt work without full and effective citizen engagement, something he says has been badly compromised by malign influence and disinformationmostly from foreign regimes such as Russia and China. We see people stepping out all over the place. We also see repressive governments cracking down in, frankly, new and sophisticated, and dangerous ways.

Twining, along with Anthony Banbury, president and CEO of the International Foundation for Electoral Systems (IFES), and Ambassador Derek Mitchell, president of the National Democratic Institute, lead the Consortium for Elections and Political Process Strengthening (CEPPS). Funded by the US Agency for International Development, CEPPSwhich uses V-Dem data to inform its programmingoversees USAIDs largest democracy assistance awards.

Besides helping advance democracy in more than 50 nations, the consortium has also thrown its support behind the Summit for Democracy. The Biden administration has invited more than 100 countries to attend, and will hold at least one follow-up summit in 2022.

The fact is, the autocrats are on the offensive, and they have a sense that democracy is fragile, and, the smaller d democrats around the world, feel like theyre on the defensive, and theyre playing a weak hand where theyre playing it with confidence, and theyre trying to gain an advantage, said Mitchell, who in 2012 was the first US ambassador to return to Burma after a 22-year break in diplomatic relations.

While some may wonder if advocates exaggerate the degree to which COVID-19 restrictions have eroded democracy, V-Dems report shows that even the smallest declines in freedom are troublesome, because most autocracies develop in a predictable mannerbeginning with restrictions on media, academic freedom and civil society. Then governments promote polarization among their own citizens with disinformation campaigns via social media before moving on to blatant disrespect and intolerance for opposing political views. And thats when more visible attacks on democracy become apparent, which makes less inconspicuous activities, like the governments attitude towards journalists, reliable indicators of democratic health.

Still, some experts find that lengthy lockdowns and other restrictive health measures have egregiously and unnecessarily accelerated democratic decay in places like Sri Lanka, Nepal and Paraguay. El Salvador, for instance, has seen widespread crackdowns on journalists as well as human rights violations in the past year. Observers say President Nayib Bukele is escalating his abuse of power through manipulating the judicial system with an eye toward his possible re-election in 2024.

Democracy in any country is always a work in progress, says Banbury, a 20-year veteran of the United Nations, including seven years as the UNs assistant secretary-general for field support. Even in the worst public health environments, democratic leaders need to respect constraints on emergency powers and pursue good-faith efforts to hold elections when it can be done safely.

Banbury, who designed and led the UNs first-ever emergency health mission in 2014, said at even at the height of Liberias Ebola crisis, IFES worked with the National Elections Commission and medical experts to integrate a range of practical health measures, such as social distancing and revised processing, which helps ensure a safe exchange of ballot papers, ID cards, and other voting materials in this type of climate.

Some countries, like Honduras, have weathered the restraints of the current pandemic well enough to deliver successful elections. Preliminary results from Honduran presidential elections in late November saw the largest voter turnout in 24 years. The victory of Xiomara Castros Freedom and Refoundation Party marks the first time a woman leads Honduras. While Castro who beat 11 other candidatespromises no abuse of power, her win ends the 12-year rule of the conservative National Party of Honduras.

Elections are critical to protecting democratic rights during a time like the COVID-19 pandemic when significant state power is often concentrated in the executive branch through powerful emergency measures, Banbury said. It is important that leaders reschedule elections as quickly as possible, if the public health environment is so dire that they genuinely need to be postponed.

Adds Mitchell: Democracy is not simply about a process or an election. Its a culture that has to be developed [and] re-energized by the citizens of every generation This is the challenge of our time. There are authoritarian opportunists who want to prey on those who are frustrated, or concerned about the course of democracy. And theyre willing to get out there and use our moments of weakness to gain advantage. We cant let that happen.

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V-Dem warns of democratic backsliding in covid's wake - The Washington Diplomat

As we turn the final pages on a tumultuous 2021, all this week The Fulcrum will share a year-end series of guest commentaries from a distinguished group of columnists on the current state of electoral reform and what we may expect in the upcoming year.

Penniman is the founder and CEO of Issue One, a crosspartisan political reform organization, and author of Nation on the Take: How Big Money Corrupts Our Democracy and What We Can Do About It.

Our democracy is under attack. The campaign to sow doubt in our elections and create distrust in our institutions is extremely motivated, and bad actors are gaining ground across the country.

This year alone, we saw 19 states enact new laws that will make it harder for Americans to vote, and several states placed election administration under greater partisan control. Barring federal action, we will see even more states in 2022 take steps to undermine the will of the people and set the stage for a constitutional crisis the likes of which we have never seen in our history.

Thats why Congress must act. Many common sense proposals which benefit from a long history of bipartisanship and are supported by overwhelming majorities of Americans have already been introduced. But Republicans in Congress have repeatedly filibustered these bills, going so far as to block debate on the very reforms needed to fix our broken political system.

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We cannot allow this inaction to continue into next year. If we want to save our democracy, we must act now. As the leading crosspartisan political reform group in Washington, D.C., heres what Issue One is focused on achieving in 2022.

Our election officials and frontline poll workers have been facing death threats on a daily basis since the 2020 presidential election. These have been fueled by baseless claims of fraud despite former President Donald Trumps own Department of Homeland Security, and attorney general, declaring the 2020 election safe and secure.

While the Department of Justice launched a task force earlier this year to investigate threats against election workers, there have been few arrests or criminal convictions, and many secretaries of state are frustrated that the task force hasnt been deployed aggressively enough.

Our election officials are the embodiment of democracy in action helping members of their communities register to vote, find their polling locations, cast their ballots and ensure that every vote is counted accurately. Many now live in fear, and states are bracing for mass retirements in the wake of these threats, which leaves positions open to extremists. As former Trump advisor Steve Bannon, a leader of the Stop the Steal movement, said last month, Were taking over all the elections.

In addition to the DOJ stepping up its game, members of Congress should seek to pass bipartisan legislation protecting election officials from intimidation and threats of violence.

Weve seen a growing number of states move to strip local election officials of their power and place election oversight into the hands of partisan politicians. Its difficult to interpret these laws as anything but election sabotage an attempt to do what failed in 2020 by making it legal for politicians to toss out legitimate votes if they dont like the outcome.

Principled Republicans, Democrats and independents must stand against this trend before it takes over not just purple states and red states but also blue states.

Even in the midst of a global pandemic, mail-in ballots, early voting and additional measures helped ensure that Americans were able to safely exercise their sacred freedom to vote.

What was the response in some states to this tremendous success? Making it harder to vote.

The massive disinformation campaign that Trump and many of his supporters continue to spread about the 2020 campaign has empowered lawmakers to roll back voting modalities they once championed like mail-in voting.

And for what gain? In Novembers gubernatorial election in Virginia, where steps have been taken in recent years to make voting more accessible, we saw how Republicans appear to have benefitted from some of the very proposals that have now stalled in Congress including early voting, no-excuse absentee voting and automatic voter registration.

Passing the John Lewis Voting Rights Advancement Act would at least empower the Department of Justice to take a closer look under the hoods of some of these laws and make sure they dont discriminate against certain groups of voters. Congress has previously reauthorized the VRA on five separate occasions by overwhelming majorities of Republicans and Democrats since its original passage in 1965, and they should once again affirm that bipartisanship.

Weve all seen the classic examples of gerrymandering zigzagging districts engineered down to partisan perfection. Its a tried and true weapon that both political parties have mastered, long ago coming to the realization that the best way to win elections and hold onto power is to prevent races from becoming competitive in the first place.

Its had a profound effect on the makeup of Congress: of the 435 seats in the House of Representatives, only 10 percent are considered up for grabs in next years midterm elections. Which means that 90 percent of House members need to worry mainly about getting through their primaries, either by raising so much money they prophylactically scare off competitors or by being so extreme that they cultivate the affinity of base voters.

When we talk about the dysfunctionality on Capitol Hill, we have to realize that its in large part the result of structural problems, and that many of those problems are fixable. Voters should pick their politicians, not the other way around. We must fix this undemocratic problem.

Our ability to elect a president and vice president fairly and peacefully every four years is

a hallmark of our democratic system. For over a century, the Electoral Count Act has governed this process and Congress role. But the 19th century law is outdated and rife with arcane language and ambiguities, opening the door to misinterpretations and exploitation.

Its time for Congress to modernize this law, clarify the role of the vice president, rein in the objection process and prevent one party from attempting to overturn the will of the people.

We cannot leave this to chance. Both parties should work together to get this done and restore Americans trust in our democratic process.

Disinformation permeates every corner of our society. It fueled an attack on our nations Capitol and continues to run rampant across all forms of media, perpetuating lies about the election and other falsehoods.

Until we confront the harm disinformation is causing, it will be extremely difficult to accomplish any of the important reforms outlined above. We cannot hand the future of our country over to algorithms that distort the truth and allow lies to spread faster than real journalism.

Congress cannot let these platforms off the hook. Members from both parties have already expressed interest in bipartisan solutions following disturbing reports about the dangers facing young people. It is crucial that legislation also addresses the destructive power of disinformation.

Our broken political system fueled by big money has created an environment in which the vast majority of ordinary citizens today no longer have a seat at the table. 2022 must be the year we change course and fix this. The American people must have confidence in our democracy.

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Six things we must do to save our democracy and protect our elections in 2022 - The Fulcrum

Chile has become the global capital of resurgent opposition to neoliberalism and resistance to fascism, electing the worlds youngest president, Gabriel Boric, a 35-year-old former student protest leader. Boric, a member of Chiles congress since 2014 and law school graduate, will lead the countrys first left unity government since the bloody United States-backed military coup which overthrew democratically elected leader Salvador Allende on September 11, 1973 (the other September 11).

The lefts decisive victory in Chile, with about 55 percent of the vote, came amid a large turnout of women and youth. This included a 1-million vote margin over his far right opponent, Jos Antonio Kast, who positioned himself as an heir to the legacy of the Gen. Augusto Pinochet dictatorship. Borics mandate simultaneously embodies the hopes awakened by Chiles national popular uprising in October and November 2019, and a rejection of Kasts embrace of, and personal connections to, the Pinochet regime. These included his older brothers strategic roles as head of the countrys central bank and labor minister. Kast waged a campaign characterized by racist, xenophobic and patriarchal appeals to the need to restore national security and order, and to defend traditional family values in the wake of the 2019 protests.

The result marks a historic shift which has widespread implications for the U.S., for the Latin American and Caribbean region, and globally. Similar hopes were awakened 50 years ago by President Allendes Popular Unity government in Chile, which was targeted by the U.S. during the Richard Nixon administration and specifically by Henry Kissinger, first as national security adviser and then as secretary of state, and eventually overthrown with U.S. encouragement.

Thousands of victims were killed, disappeared, tortured and exiled throughout 17 years of dictatorship under Pinochet, who turned Chile into a global model for the neoliberal orthodoxy associated with the disciples of Milton Friedman and the Chicago Boys. The so-called Chilean Miracle was closely aligned with the politics of President Ronald Reagan in the U.S. and Prime Minister Margaret Thatcher in the United Kingdom. This model was soon emulated regionally, with disastrous results, in countries such as Peru, Ecuador, Argentina, Colombia and Mexico, and globally through the so-called Washington Consensus promoted by the U.S. through the International Monetary Fund and World Bank.

Many in Chile and Latin America are waiting to see how the U.S. will react to a Boric administration and a governing coalition that includes Chiles Communist Party as a partner. As more people around the world view the U.S. and the European Union as threats to global democracy, social movements throughout Latin America and beyond are mobilizing to defend the democratic result of Chiles elections, as they did during Pinochets dictatorship.

Borics victory reflects a new alignment of political forces in Chile which displaces the center-left and center-right blocs which have dominated the spectrum and alternated in power since Pinochets ouster in 1990. Borics new left leadership first emerged while he was a student activist within the context of national student protests in 2006, 2009 and 2011, which laid the foundation for the 2019 uprising. The massive 2019 protests led to a November 2019 civic pact which initiated Chiles current constitutional reform process as well as the emergence of the broad left coalition that eventually backed his presidential candidacy.

Borics election also reflects an emergent regional trend, coinciding with Xiomara Castros November election in Honduras and Luis Arces October 2020 election in Bolivia, which in each case effectively reversed coups in 2009 and 2019, respectively, that sought to shift both countries back into closer alignment with the U.S. This left trend also includes the victory of Pedro Castillo in Peru.

The president-elects four-year term will coincide with Chiles promulgation of a new constitution, intended to dismantle almost 50 years of authoritarian hegemony. The Boric presidency thus has a historic opportunity to complete Chiles prolonged democratic transition and process of transitional justice.

The new leader pledged in his first address as president-elect that his approach would be focused explicitly on the promotion of truth, justice, reparations and guarantees of non-repetition as guiding threads for his administrations policies. Boric also prioritized satisfaction of the demands of Chiles powerful womens and Indigenous movements as central driving forces in his agenda. This will likely include redefinition of Chile as a pluri-national and pluri-cultural state, as Bolivia did in its 2008 constitution, and new guarantees for reproductive rights and LGBT rights in a country where they have been traditionally restricted.

Borics campaign was notable for taking an eco-socialist approach to environmental issues. His election night speech included an explicit rejection of the controversial $2.5 billion Dominga iron, copper and gold mining project promoted by the Andes Iron company in the Atacama desert, 500 miles north of Santiago and near a conservation area that is home to 80 percent of the worlds Humboldt penguins. Destroying the world is destroying ourselves. We do not want more sacrifice zones. We do not want projects that destroy our country, that destroy communities, and we exemplify this in a case that has been symbolic: No to Dominga, he said. Outgoing conservative Chilean President Sebastian Piera recently had to fight off an impeachment process based on his familys role as investors in the Dominga project, as revealed in the release of the Pandora Papers by the International Consortium for Investigative Journalism.

The new administrations approach will be centered around an overall commitment to advancing human rights, and is specifically focused on the implementation of economic and social rights to lay the foundation for a dignified life for all Chileans, including rights to health, education and housing. The emphasis here is on reversing the impact of neoliberal policies which have deepened poverty and inequality and undermined the rights of pensioners. This approach is being combined with an emphasis on promoting a care economy centered around reinforced state public health guarantees in response to the COVID-19 pandemic.

Difficult tests lie ahead for the Boric presidency, as it navigates contending visions of left politics in Latin America in the current historical moment. Boric identifies with certain dimensions of the most progressive currents in European-style social democracy. This is reflected in his campaigns emphasis on state guarantees of economic, social and cultural rights, and climate justice. But these characteristics are combined with the bottom-up politics that characterize Latin Americas most powerful social movements for human rights, grounded in the demands of the poor and other marginalized sectors. These are also shaped by feminist demands for equality and against sexual and gender violence; by Indigenous peoples for autonomy and self-determination and against extractivist mega-development policies and paradigms; and in defense of migrant rights. This is a more complex mix than is suggested by analyses that reduce Latin Americas left to polarized camps that are either statist or anti-state (or autonomist), and thus necessarily in conflict with each other. Borics trajectory and horizons suggest a much more fluid relationship between the state and social movements. But the question in practice will be the extent to which Borics administration is directly accountable to the social movements which made his victory possible.

He will face key tests as the constitutional reform process evolves, which is intended to culminate in a referendum on approval of a new text sometime after July 2022. It is likely that the new constitution will take historic steps in recognizing the rights of women, and for the first time, of Indigenous peoples, among other important reforms. Measures of this kind will generate pressures on Boric to reaffirm or retreat from his campaign platform. The elected assembly which is drafting the text the first in the world of its kind to have gender parity is significantly to the left of Chiles congress, and of Borics second round campaign, which successfully contended for a decisive slice of a bloc of centrist voters.

But Borics mandate was also spurred by a significant increase in turnout that was concentrated among women and younger voters, and overall by those who supported the massive 2019 protests. The balance struck in governance and implementation between these sectors will shape the new governing coalitions aspirations and their limits.

Global and national markets have already reacted negatively to Borics victory, which will accelerate pressures by global capital and its local allies to moderate his campaign pledges. Boric will have to navigate the increasingly intense regional and global rivalry between traditional U.S. hegemony and Chinas ascent, as a Latin American country which has positioned itself as a key player in the Pacific Basin. China and other Asian countries are by far Chiles most important trade partners (57.7 percent of exports in 2020), far outpacing North America (U.S. and Canada 15.2 percent), other Latin American countries (13.1 percent including Mexico) and the EU (12.2 percent).

Moreover, it is closer, deeply troubled U.S. allies such as Mexico, Guatemala, Colombia and Haiti that have much lower levels of democratic legitimacy and human rights compliance, compared to states that may become potentially more independent of U.S. domination, such as Chile and Peru. Honduras is a much more problematic case because of its greater vulnerability to more direct forms of U.S. intervention related to the drug war and longstanding processes of forced migration. The exercise of U.S. hegemony through sanctions tends to strengthen its targets rather than weaken them, and to harm the most vulnerable sectors in countries that have been singled out in this way. There is also extensive debate about the empirical evidence either way in terms of the impact of such measures on the supposed promotion of democracy.

This is further underlined by how U.S. sanctions against Cuba, Venezuela and Nicaragua, which violate international law and are deeply rooted in Cold War assumptions and methods, have themselves undermined democratic options within those contexts. Potential center-left victories that are on the horizon in 2022 in Colombia and Brazil will provide additional tests for these overall trends, as the U.S. scrambles to respond. The Biden administrations actual response to the lefts victory in Chile, and that of global and national capital, in practice, beyond the traditional rhetoric of welcoming messages, will be a crucial indicator.

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Radical Democracy Is Resurgent in Latin America. How Will the US Respond? - Truthout