Category: Banking & Finance

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Unsecure Health: What the BIOSECURE Act Could Mean for the Biopharmaceutical Industry

A Note by Megna Raghuraman

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On January 19, 2025, TikTok, a social media platform owned by Chinese company ByteDance which provides short form video content to over 170 million users, shut down in the United States. The bill to block TikTok was passed in April 2024 with an overwhelming majority in both the House and the Senate due to growing bipartisan fears of national security risks. The Supreme Court upheld the TikTok ban, sharing Congress’s national security concerns of TikTok’s collection of data privacy. However, the ban lasted a mere eighteen hours. The first day of President Trump’s term, his administration effectively stalled the ban and brought TikTok back to the U.S. via executive order. However, while the Trump administration appears supportive of TikTok in the U.S., the executive order only delays the ban: TikTok must eventually sever its ByteDance—and essentially Chinese—connection to maintain … Read the rest

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Comity, Chapter 15’s Public Policy Exception, and the Absolute Priority Rule

A Note by Christopher Stella

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Since chapter 15 of the Bankruptcy Code was enacted in 2006, there have been debates about when the public policy exception found in 11 U.S.C. § 1506 should apply to deny recognition of a foreign proceeding, law, or court order. Although some critics have made strong arguments in favor of a broad application of section 1506, the general rule among courts is to sparingly apply section 1506 and presume that recognition is proper. Despite the general rule in favor of recognition, courts have found some situations where section 1506 does apply. For instance, courts have applied section 1506’s public policy exception when core bankruptcy principles have been violated, or where statutory rights have been impinged. But courts have not fully addressed whether it would be proper to apply the public policy exception in a case where a foreign debtor’s … Read the rest

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An “Unmanageable” Task: Breach of Warranty Claims in Multi-State Class Action Litigation

An Article by William Beatty

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The crossroads of warranty law and class action litigation pose substantial hurdles for claimants asserting a multi-state class action for breach of express or implied warranty. Not only do they have to satisfy the rigorous Federal Rules of Civil Procedure Rule 23(a) requirements of numerosity, commonality, typicality and adequacy of representation, but also have to fit the cases into one of the three categories outlined in Rule 23(b). Plaintiffs must also deal with widely varying state rules regarding such issues as reliance, pre-suit notice and privity of contract which might destroy the required elements of commonality or typicality. These variables have resulted in several courts deeming multi-state warranty class actions to be “unmanageable,” rendering them unsuitable for class-wide resolution.… Read the rest

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HIGH EXPECTATIONS: WHAT RESCHEDULING MARIJUANA COULD MEAN FOR THE CANNABIS INDUSTRY

A Note by Elsie Layman

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On January 12, 2024, the U.S. Department of Health and Human Services (HHS) released a review addressed to the U.S. Department of Justice’s Drug Enforcement Administration (DEA) that recommended marijuana (Cannabis sativa L.) be rescheduled from Schedule I to Schedule III of the Controlled Substance Act.[1] The unredacted recommendation was released as a result of the effort of Matthew Zorn, who filed a Freedom of Information Act complaint against HHS in September 2023.[2] Zorn announced the recommendation would be released on January 11, 2024 on his blog, writing: “I win . . .  Impossible just takes a few weeks.”[3] The release of this recommendation is a win not only for Zorn and people who enjoy the drug recreationally, but for the U.S. cannabis market, which was valued at $13.2 billion in 2022.[4]

[1]… Read the rest

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IS STARBUCKS A BANK? HOW THE BILLIONS CONSUMERS UPLOAD ONTO STARBUCKS CARDS SHOULD BE REGULATED

A Note by Mackenzie Morgan

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As technology has continued to advance, so have company reward programs. In 2021, Starbucks customers loaded $11 billion onto mobile Starbucks Cards,[1] accounting for almost half of all Starbucks sales.[2] The amount of money consumers have loaded onto their mobile applications to prepay for their coffee orders has allowed Starbucks to overtake most banks in terms of assets.[3] “85% of US banks have less than $1 billion total in assets, illustrating the major player Starbucks has become in this space.”[4] Should the billions of dollars that consumers have uploaded onto Starbucks Cards be regulated by the federal government?

… Read the rest
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PARALLEL GOVERNANCE: THE PATH TO UNLOCKING THE POTENTIAL OF ISLAMIC FINANCE IN A CONVENTIONAL FINANCE SYSTEM

A Note by Rema Marie Kodaimati

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The global debt levels have reached new records despite the massive technological advances made in recent decades.[1] The current global debt has reached approximately 350% of the global GDP, or the equivalent of $37,500 per person in the world.[2] Although international economists have forecasted that the global economy will continue to grow in 2023, albeit at a decreased rate of 2.7% from the 6% of 2021, their predictions are based upon gross domestic product, (“GDP”),[3] a metric that is often criticized as misrepresenting the true state of economic health or the general well-being of societies.[4] Looking at the debt levels within the United States alone, circumstances do not appear to be any better as federal borrowing has practically reached the nearly $31 trillion national cap, with the Treasury Department using latch ditch accounting maneuvers … Read the rest

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ANOTHER GOLD RUSH: THE PROMISE OF CYRPTO AND THE WEALTH GAP

A Note by Amanda Holme

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At the Aspen Security Forum, Gary Gensler, chair of the SEC, compared the state of cryptocurrency regulation to the “Wild West,” noting its lack of investor protection.[1]  Gensler has continued to repeat the “Wild West” metaphor when discussing the challenges and lack of cryptocurrency regulation, which leave individual investors and financial markets vulnerable to fraud.[2] Although the Internal Revenue Service (“IRS”), Financial Crimes Enforcement Network (“FinCEN”), Commodity Futures Trading Commission (“CFTC”), and U.S. Securities and Exchange Commission (“SEC”) have used existing laws to regulate cryptocurrencies, Congress has not enacted legislation specifically targeting them.[3]  Currently, no single U.S. regulatory authority governs private cryptocurrency exchanges.[4] Since the majority of cryptocurrency activity occurs beyond the boundaries of government regulation, Gensler worries about the continued potential for crime, financial instability, and threats to national security.[5]

[1]… Read the rest

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MARKET MANIPULATION OR JUST DUMB MONEY? The GameStop Stock Spike and What Happens Next

A Note by Samuel Barder

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On December 9, 2019, GameStop Corp. revealed a troubling third quarter earnings report.[1] Net sales had dropped 30% compared to the same time in 2019, and the company was operating at a $63 million loss for the quarter.[2] The next day GameStop shares (“GME”) tumbled by 20% to close at $13.66 per share.[3] On January 27, 2021, the stock closed at $347.51 per share, a 1,735% increase from since the beginning of the year.[4] Two days before GME peaked at $483.00 per share during morning trading.[5] How did this happen?

The rapid rise in GME shares pitted pros against joes as institutional players, hedge funds, and investment professionals lined up on one side and retail investors, online traders and small brokerages, on the other.[6] One prominent investor said the retail investors, often labeled “dumb money” … Read the rest

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Is Your Bank Account Safe? Financial Institutions’ Bad Faith Malpractice

By Claire Chung

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This Note argues that a poisonous culture in the banking industry, to indiscriminately profit by cutting legal and ethical corners, led to the Wells Fargo scandal in 2016. Wells Fargo had wrongfully profited by incentivizing its employees to meet sales quotas by creating phony accounts using confidential customer information without consent. Although the employees acted alone, liability lies on the employer, Wells Fargo, under the theory of respondeat superior. In doing so, Wells Fargo violated unfair and deceptive financial practices law. Also the scandal raised the issue of whether the mandatory arbitration clause in a financial product purchase agreement should be enforced against consumers or not. This Note proposes a multifaceted solution to address the pandemic of bad faith banking practices.… Read the rest

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Lack of Legal Duty to Fill Vacancies on the United States Export-Import Bank’s Board of Directors May Destroy Ex-Im Bank

By Michal Nowicki

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This Note examines whether the President of the United States has a statutory duty to nominate candidates to fill vacancies on the United States Export-Import Bank’s five-person Board of Directors. With only two of the five seats occupied, Ex-Im Bank’s Board of Directors cannot currently approve the financing of large export credit transactions, because at least three board members must be present to establish quorum for conducting official business. As a result, the Bank’s power is severely limited. Although this Note argues that President Trump is not legally obligated to fill Ex-Im Bank board vacancies, it offers an argument the Bank’s supporters can use to persuade President Trump to restore the agency to its full potential.… Read the rest