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Mixed messages over tighter rules for Wall Street

Conflicting signs are emerging in Washington over whether JPMorgan Chase’s surprise trading loss will spur tighter regulation on Wall Street.

One of the banking industry’s main regulators appeared to indicate that it would oppose new efforts to rein in risky Wall Street activities, while other regulators emphasized caution. Still, a congressional committee announced plans on Monday to hold a hearing on the financial regulatory overhaul that will look at the JPMorgan loss.

Wall Street’s representatives, fearing that the entire banking industry might pay for JPMorgan’s sins, are trying to contain the fallout in Washington, people close to the matter said.

When JPMorgan announced on Thursday that it had a trading loss of $2 billion that was expected to grow, some lawmakers and consumer advocates cast it as a case study in the need for stricter Wall Street oversight. The central policy, known as the Volcker Rule, would ban banks from trading with their own money, an effort to prevent bank blowups that necessitate bailouts with taxpayer money.

—Ben Protess and Edward Wyatt, The New York Times

Rhode Island to recognize
gay unions

Gov. Lincoln Chafee of Rhode Island on Monday ordered all state agencies to recognize same-sex marriages performed elsewhere and to afford those couples many of the same rights and benefits that heterosexual couples get.

By issuing an executive order, Chafee, an independent, reaffirmed a 2007 opinion by the state attorney general, which he said state agencies had followed inconsistently.

An effort to legalize same-sex marriage in Rhode Island failed last year, with the legislature approving civil unions for gay couples instead.

Gay rights advocates said that among other things, the order would help ensure that insurance plans regulated by the state provide the same benefits to same-sex couples who were married in other jurisdictions that they do to heterosexual couples.

—Abby Goodnough, The New York Times

Election-finance witness for Edwards barred

GREENSBORO, N.C. — In a setback for the defense, the judge in John Edwards’ corruption trial Monday barred the testimony of a former federal elections official who was prepared to say that Edwards did not violate campaign finance laws.

The witness, Scott Thomas, a former chairman of the Federal Election Commission with 37 years of experience at the agency, was to have been the first witness for Edwards, who is defending himself against six charges of conspiracy and campaign finance violations. Thomas was prepared to testify that almost $1 million from wealthy donors, which was used to hide Edwards’s affair during his 2008 run for the Democratic presidential nomination, did not qualify as campaign contributions.

In a sometimes contentious hearing without the jury present, Thomas said that although campaign spending remained an unsettled area of law, Edwards had no legal obligation to claim the money as a contribution.

“In my view, it’s a fairly clear-cut case,” he said. “These are obviously intensely personal expenses.”

Judge Catherine C. Eagles, however, ruled against Edwards’ lawyers and said Thomas could not offer the U.S. District Court jury his opinion on the legality of the contributions.

Eagles said it was her role — not a witness’ — to explain the law to the jurors and let them decide if Edwards had violated it.

—Kim Severson, The New York Times