Month: October 2009

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Should Section 10(b) Rule 10b-5 of the Securities Acts be amended to allow private right of action for aiding and abetting?

I. Introduction

The Securities Act of 1933 and the Securities Exchange Act of 1934 were enacted in response to the Stock Market Crash of 1929 that ushered in the Great Depression. [1]  In passing the Acts, Congress’ intention was to implement regulations that would govern the ways securities were bought and sold in the United States and to protect individual consumers from securities fraud. Specifically, Section 10(b) of the 1933 Act and Rule 10b-5 of the 1934 Act regulate fraud in connection with the purchase or sale of a security. [2] To obtain a conviction under these provisions, it must be proved that:

(1)     (a) the defendant engaged in a fraudulent scheme, or

(b) made a material misstatement, or

(c) omitted material information to one to whom the defendant
    owed a duty;

(2)    the scheme, misstatement, or omission occurred in connection with the purchase or sale of a

… Read the rest
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Who Shut Off the A/C?: Turning Up the Heat on Corporate Attorneys and the Attorney Client Privilege

I.  Introduction           

The decision of Judge Jed Rakoff in the settlement agreement between Bank of America (“BofA”) and the Securities and Exchange Commission (“SEC”) is one that could strike fear in the hearts of corporate attorneys everywhere. On August 3, 2009, the SEC filed charges against the Bank of America Corporation for its lack of disclosure to its shareholders about bonuses paid to Merrill Lynch executives in the merger. [1]            

The Bank of America/Merrill Lynch merger is a complicated web of litigation and investigation that has become multifaceted as time goes on. As stated by Pennsylvania law professor David Skeel, “It’s like a multiplayer chess game where each party is making different moves from a different strategic position and each party has a huge amount at stake.” [2]           

While the SEC is investigating the lack of disclosure to BofA shareholders regarding the bonuses paid out to Merrill … Read the rest

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Free Trade versus Protectionism: A Taxing Debate

I. Introduction

President Obama’s September 11th decision to restrict imports of Chinese tires has sparked a taxing debate both domestically and abroad. On top of the preexisting four percent tariff on all tire imports, the president determined to impose additional ad valorem duties upon certain passenger vehicle and light truck tires from China, designed to taper down from 35 to 30 to 25 percent over three years. [1] China responded within days by raising a World Trade Organization ("WTO") challenge to the safeguard, alleging that Obama’s actions are inconsistent with existing international laws. [2] Meanwhile, the proclamation has incited both criticism and praise from a variety of domestic and foreign interests. This article will assess the legality, consequences, and judiciousness of implementing such a tariff and conclude with a word on the free trade versus protectionism debate.

II. Background

The tire tariffs are in response to a United Steelworkers complaint … Read the rest

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Have Homeowners Associations Crossed the Line? Homeowners Associations Are Quick to Pursue Foreclosure for Unpaid Assessments

I.  Introduction  

Common Interest Communities have become a way of life for the American people.  Millions of Americans reside in gated communities governed by homeowners associations. [1] These communities are growing in popularity for numerous reasons.  One such reason is that families want to live and raise their children in an environment that fits their needs and desires. [2]  Another reason is that people feel a sense of security and stability in a gated community. [3] 

However, these communities have not escaped strong criticism for their burdensome restrictions, excessive regulation and aggressive enforcement.  Critics argue that the disadvantage of living in such a community is that homeowners have to comply with a myriad of restrictions and covenants and failure to do so can result in fines. [4]  Critics also allege that the zealous homeowners associations often times abuse their powers … Read the rest

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Renewable Energy: Looking Toward the Future

I.  Introduction

Rising gas prices and an increasing awareness of the environmental consequences associated with the use of fossil fuels have spurred the development of the biofuel industry.  “From being merely an interest of marginal innovators, it has become a multi-million dollar business – transforming economies – thanks to rising attention and support from governments and the public.”[1]  With the US consuming nearly 20.8 billion barrels of oil per day, and with OPEC officials claiming they will not be able to meet the projected western oil demands in 10 to 15 years, the prospect of meeting our energy needs through homegrown and renewable resources is becoming more appealing.[2],[3]  But this seemingly cut and dry solution to the US dependency on fossil fuels is not as simple as it appears.  The actual economic and environmental benefits realized by relying more heavily on biofuels is hotly debated, … Read the rest

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From the 2016 Olympics Games to Antitrust Law: Brazil Steps Towards Globalization

I.                   Introduction 

Rio de Janeiro will be the first Olympic location in the history of South America. This is the result of Brazil gaining status internationally and integrating to the global market. Apart from sports, globalization has had a great impact on the business transactions and also in the rules enacted in Brazil. An increasing  number of international merger companies and nations had switched a red light on the antitrust law regime for merger control that coexists in the many jurisdictions.[1] The different views of antitrust law in each country are important to determine the approach and practical implications of the review systems application.[2] In the merger context, there are significant burdens in international business operations when companies are required to comply with a diversity of procedural requirements in domestic regimes regulations. Over sixty nations have merger notification requirements. Transactional costs are elevated when … Read the rest

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Statistical Sampling: Weighing Costs versus Precision in Providing Taxpayer Guidance

I.                   Introduction

In the months preceding elections in the United States it is difficult to avoid statistical sampling, as polling projections are everywhere.  Only a sample is used to make these projections because it would take too much time and be too expensive to determine how every voter will vote.  [1]  Statistical sampling has many others uses as well, including being used as evidence in a trial [2] or being used to estimate how much a taxpayer owes the government on their tax return.  [3]  As with elections, to determine the exact result for a tax return, every item in the population would need to be investigated.   As a population gets larger, this gets more time consuming and more expensive, especially when the information is collected by experts, lawyers, and accountants. Furthermore, each additional item of the population collected will not result … Read the rest

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Intellectual Property Rights: The Last Barrier to International Free Trade

 I. Introduction

The world today is highly technologically advanced in that works of art, literature, designs and other goods are highly digitalized.[1] Whereas in previous generations, trade agreements dealt in hard goods that could be accounted for and of which value was readily determined, the commodities of today are digital and informational.[2] These intangible goods are harder to track and almost impossible to value. As such, the goal of international free trade is being impeded by the reluctance of certain companies to invest overseas either directly in new upcoming firms or through trading of patented information.[3]

Some nations are reluctant to stringently enforce, or even create, laws for the protection of intellectual property rights. These nations argue that protection of intellectual property rights through patents and copyrights would raise market prices to a level near a monopolistic environment.[4] The belief is that an innovative foreign company will not pay royalties … Read the rest

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R.I.P. Vanilla Dreams, You Will Be Missed

I. Introduction

In smoke-filled rooms, Big Tobacco executives are patting themselves on their backs while local smoke shops and flavored-cigarette aficionados are increasingly disgruntled by the loss of their Djarum cloves, Cherry Jubilee and Vanilla Dreams. The ban was introduced by the U.S. Food and Drug Administration (FDA) as an important step in curbing cigarette use among teenagers, branding flavored cigarettes as a “gateway for many children and young adults to become regular smokers.” [1] However, as the ban approaches is second week of implementation, gaping loopholes within the prohibition has left the ban to open attack by others. [2] This paper will attempt to cast doubt on the effectiveness of the recent ban on teenage smoking cessation efforts, showing that the tobacco products favored by teenagers are not affected by the ban. Consequently, this paper will argue that the ban will mainly profit major U.S. cigarette producers, Phillip Morris … Read the rest