Emerging Markets Law

Showing 43 posts in Government.

Financial Choice Act

Posted In Government

This week, the House of Representatives will consider and vote on the Financial Choice Act (“FCA”), sponsored by Rep. Jeb Hensarling of Texas – chairman of the House Financial Services Committee. The FCA is a response to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), and not a nice one. It essentially guts that bill which was itself a response to the financial crisis that began in 2007. After his election, President Obama called for a "sweeping overhaul of the United States financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression" and Dodd-Frank was basically the result.

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FTC May Not Regulate Common Carrier Bandwidth Advertising for Fairness

Posted In Government, Industry, Media, Public Policy

A federal court ruling this week contributes to the confused state of which US agencies may regulate behavior of ISPs relating to the Internet. The Ninth Circuit has held that the Federal Trade Commission (FTC)—the nation's fair advertising watchdog—may not police ISP performance claims put forth by AT&T. The reason? AT&T is a "common carrier," a public utility historically regulated by the Federal Communications Commission (FCC) rather than the FTC. The rub, though, is that the two agencies generally have split jurisdiction, with ad claims falling squarely to the FTC regardless what industry produced the ad in question.

This ruling appears to signal that common carrier ads, i.e. those of any FCC-regulated communications utility, cannot be challenged by the FTC. That opens up a lot of fights about who is a common carrier and which aspects of their business, operations versus advertising, may be policed by which agency. Such uncertainty is unwelcome for companies playing in the fast-moving Internet field: not knowing whose standards apply and how is a real business challenge. It also makes it hard to know where consumers should go with a complaint. 

Taylor English Victory in Litigation Against IRS

My tax partner, Julian Fortuna, assisted in obtaining a great result for our client, Linchpins of Liberty, Inc., in its suit against the IRS.

Our client, Linchpins of Liberty, is a non-profit organization that, along with roughly 37 other clients, applied for non-profit status under IRC Sections 501(c)(3) or 501(c)(4). Because of their names, the IRS failed to properly process these organizations’ applications for non-profit status as part of a program that tried to frustrate or delay non-profit status for conservative or anti-administration organizations. Linchpins of Liberty, along with many other organizations, sued the IRS on constitutional grounds, claiming that they were being denied constitutional rights because of their political beliefs.

After the fact of the IRS’ program of delay and non-response came to light, the IRS claims to have halted the program and resumed the proper processing of applications for non-profit status. At the trial court level, the IRS had succeeded in dismissing certain of Linchpins of Liberty’s constitutional claims as moot on the grounds that the IRS was no longer engaged in its intentional policy of delay and non-response.

In an opinion released last week the D.C. Circuit Court of Appeals reversed the trial court’s ruling, holding that the IRS had not carried its “heavy burden” to prove that the constitutional claims were moot. The opinion of the D.C. Circuit took the IRS to task for its argument:

“The IRS offers a rather puzzling explanation for why the continued failure to afford proper processing to at least some of the victim applicants should not prevent a finding of cessation. That explanation is that the organizations whose applications were still pending “were involved in ‘litigation’ with the Justice Department . . . .” Id. at 27. . . It is not at all clear why the IRS proposes that not ceasing becomes cessation if the victim of the conduct is litigating against it. The IRS position is reminiscent of Catch-22 from the novel of the same name. Under that “catch,” World War II airmen were not required to fly if they were mentally ill. However, anyone who applied to stop flying was evidencing rationality and therefore was not mentally ill. See Joseph Heller, Catch-22 (1971). “You are entitled to an exemption from flying,” the government said, “but you can’t get it as long as you are asking for it.””

Julian Fortuna was co-counsel for these clients, along with the American Center for Law and Justice, and participated in oral argument in the case.

SEC Adopts Amendments to Implement JOBS Act and FAST Act Changes for Exchange Act Registration Requirements

Posted In FAST Act, Government, JOBS Act, Regulation A+, SEC, Securities

On May 3, 2016, The Securities and Exchange Commission (SEC) announced that it was amending its rules related to the thresholds for registration, termination of registration, and suspension of reporting under Section 12(g) of the Securities Exchange Act of 1934. These amendments implement provisions of the Jumpstart Our Business Startups Act (JOBS Act) and the Fixing America’s Surface Transportation Act (FAST Act).

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FTC Settles Crowdfunding Fraud Case

Posted In Crowdfunding, Government, Litigation, Securities

The FTC announced last week its first settlement in a crowdfunding fraud case.

The FTC had accused Erik Chevalier of defrauding consumers in a Kickstarter crowdfunding campaign in which he sought to raise funds for a board game to be called “The Doom that Came to Atlantic City.”

Chevalier and his company, The Forking Path, launched their campaign for “The Doom That Came to Atlantic City” on Kickstarter in May 2012.  The game was based on a board that looked a lot like Monopoly, and required players to play the roles of villains in a post-apocalyptic version of Atlantic City.

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Upcoming FCC Ruling on TCPA

Posted In Government

My colleague, Matthew Rosenkoff, has penned a new piece entitled, Upcoming FCC Ruling – A Case of Clarity, Concern, or Both.  He writes:

Over the past few years, there has been an increasing amount of litigation involving the Telephone Consumer Protection Act (TCPA). A lot of those disputes have centered on issues plaguing the industry, such as whether certain software is an automatic telephone dialing system (ATDS), whether calls were made with express consent, and how a consumer can revoke consent. Case law has developed on both sides of these types of issues which has resulted in numerous petitions to the Federal Communications Commission (FCC) for clarification and a revised declaratory ruling. Many of those petitions have been pending for over a year and some even longer. During this time, many companies have been faced with mounting litigation costs in defending (and settling) TCPA cases because of the uncertainty on many of these issues.

You can find the rest here.

Regulation A+ White Paper

Posted In Crowdfunding, Government, Regulation A+

The SEC recently finalized its rules to implement changes to Regulation A, now known as Regulation A+, mandated by the 2012 JOBS Act.  Attached is a link to our white paper, summarizing the new Regulation A+ rules.

As summarized below, Regulation A+ creates two new tiers and generally liberalizes what issuers can do under the exemption.   Tier 1 of Regulation A+ is generally similar to “traditional” Regulation A (as it existed before the new rules under the JOBS Act).  Tier 2 of Regulation A+ is an expanded exemption that allows issuers to raise up to $50 million in any 12 month period with minimal ongoing reporting obligations.

Continue reading Regulation A+ White Paper ›

DOJ Issues Guidance on Cybersecurity

Posted In Government, In-House Counsel, Privacy

Showing an increased level of concern for coordination between industry and the public, the U.S. Department of Justice ("DOJ") has issued guidance on cybersecurity risks and the steps that industry and consumers should take to prepare for cybersecurity threats.

The DOJ guidance on cybersecurity is very basic.  The guidance is roughly 15 pages long and suggests that businesses familiarize themselves with their information networks and develop a plan for how to respond in the event of a breach in security.  (Nothing novel here.)

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New House Cyber Bill

Posted In Government, In-House Counsel, Privacy

The House has passed legislation that encourages sharing of cyber threat information by removing barriers to disclosure.  Under the new bill, companies that share information about incursions would be shielded from antitrust liability for talking to competitors, for example.  The bill also would require that data be anonymized before disclosure to the government, which should protect them from complaints about NSA-style spying.

The bill is one of several new stimuli to public-private sharing of cyber threat info.  The idea is to secure industries from within, and to leverage their internal information for national security purposes.  Several sensitive industries do this already, voluntarily.  The goal is to create an environment of cooperation among other industries, rather than compulsory disclosure under shifting technology norms.

The House bill, H.R. 1560, is criticized by both industry (for not going far enough in terms of standards) and consumer groups (for intruding on civil liberties).  It will have to pass the Senate and the President's desk to become law, and is one of several pending pieces of cyber legislation that would have to do so.  Thus, its fate is not clear; but it is the first bill to pass a full house of Congress on the subject, and it is a bellwether for the likely fact of Congressional action on cyber matters.

SEC Publishes Final Regulation A+ Rules

Posted In Crowdfunding, Government, Sarbanes-Oxley, SEC, Securities

The SEC published in the Federal Register on April 19th its final rules, implementing the Regulation A+ provisions of the 2012 JOBS Act.

We are pulling together a more detailed summary of the Regulation A+ rules, but the bottom line is that the new rules will allow private companies to raise up to $50 million in an exempt, non-registered offering under the rule.

The previous rules, which practitioners know as Regulation A, had been in place for decades and had a $5 million cap on the amount an issuer could raise.

With the demise of the small-cap IPO market (largely eliminated by Sarbanes-Oxley and its attendant costs) many analysts believe that offerings under new Regulation A+ will allow growing companies to raise significant amounts of growth capital as a precursor to a strategic exit or an IPO.

With publication on April 19, 2015, the rules will become effective in 60 days, on June 19, 2015.

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