JDSupra

  • Thinking of money

    Finance

    Year-End Tax Planning 2014

    Year-end tax planning is especially challenging this year because Congress has yet to act on a host of tax breaks that expired at the end of 2013. Some of these tax breaks may be retroactively reinstated and extended, but Congress may not decide the fate of these tax breaks until the very end of this year (and, possibly, not until next year). These breaks include, for individuals: the option to deduct state and local sales and use taxes instead of state and local income taxes; the above-the-line-deduction for qualified higher education expenses; tax-free IRA distributions for charitable purposes by those age 70-1/2 or older; and the exclusion for up-to-$2 million of mortgage debt forgiveness on a principal residence. For businesses, tax breaks that expired at the end of last year and may be retroactively reinstated and extended include: 50% bonus first year depreciation for most new machinery, equipment, and software; the $500,000 annual expensing limitation; the research tax credit; and the 15-year write-off for qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property.

    / Nov 21, 2014 at 9:57 AM
  • Please come work for Kirkland.

    Finance

    SEC Scrutiny of Crowdinvesting Sites Not Registered as Broker-Dealers

    On November 10, 2014, the SEC announced a settlement with Eureeca Capital SPC, which is a crowdinvesting portal incorporated in the Cayman Islands. Eureeca’s website seeks to match foreign-based issuers with investors interested in making equity investments. The website provides information about various issuers and their offerings. This information was accessible to U.S. residents, despite the fact that the securities offered through the site were not registered with the SEC. In alleging that Eureeca violated Section 5 of the Securities Act by offering unregistered securities for sale, the SEC noted that Eureeca took no steps to comply with the exemption from registration found in Rule 506(c). Specifically, the SEC alleged that Eureeca took insufficient steps to confirm that the U.S. investors were accredited investors. The SEC also alleged that Eureeca was acting as an unregistered broker-dealer by, among other things, (i) encouraging investments in the offerings on its site, (ii) completing the final legal requirements for the transaction (i.e. accommodating the swap of funds for equity), and (iii) receiving a percentage of the funds from all fully funded offerings as a fee.

    / Nov 19, 2014 at 11:02 AM
  • question mark attorney

    eDiscovery, Technology

    5 Questions You Should Ask About Big Data Security and eDiscovery

    In the era of big data, vetting and asking the right security questions can help your organization save money and have peace of mind when it comes to ediscovery. Below is a general overview of some of the most important questions you should be discussing with your outside law firms and ediscovery service providers. Developing a thorough security RFI created in tandem with your IT/IS department to truly vet these organizations is highly recommended.

    1. How is data stored, secured and monitored? Knowing how and where your data will be stored once you transmit it for ediscovery processing and hosting are some of the most important questions you can ask.

    / Nov 18, 2014 at 10:36 AM
  • The hacker

    Technology

    Obama Administration the Target of Hackers; Former Administration Official Recipient of Subpoena Related to Cybersecurity

    The Obama Administration’s handling of cyber and data security was recently brought into question due to two distinct security incidents. On the same day that a former Administration official received a subpoena related to the security of a government-run website, it was confirmed that hackers had targeted an unclassified computer network used by senior White House staff.

    On Tuesday, October 28, House Science, Space and Technology Committee Chairman Lamar Smith (R-TX) and Oversight Subcommittee Chairman Paul Broun (R-GA) issued a subpoena to former U.S. Chief Technology Officer Todd Park. The subpoena compels Mr. Park to appear before the Subcommittee on Oversight to answer questions regarding his role in developing and evaluating the operations and security of HealthCare.gov, the website set up for the federal health insurance exchange created by the Affordable Care Act. Recently, it was reported that HealthCare.gov had been hacked back in July 2014. Federal officials confirmed that hackers broke into part of the website and were able to upload malicious software. However, no evidence was found that consumers’ personal data were taken.

    / Nov 17, 2014 at 10:09 AM
  • bankruptcy RF

    Bankruptcy, Finance

    When Things Do Not Go As Planned In A Bankruptcy Sale

    Buying distressed assets is big business. Many distressed assets are acquired through the seller’s Chapter 11 bankruptcy case. In those instances, a buyer will enter into a purchase and sale agreement with the seller/debtor and the agreement is generally subject to notice and opportunity for overbids by third parties and ultimate bankruptcy court approval.

    The somewhat problematic issue is determining what rights or obligations, if any, do the parties have under the agreement between the date of execution and the date the Court enters an order approving the sale? This is precisely the issue the parties encountered in the chapter 11 bankruptcy case of Hot Dog on a Stick, which is pending before the U.S. Bankruptcy Court for the Central District of California.

    / Nov 12, 2014 at 3:23 PM
  • Herding_Cats

    eDiscovery

    E-Discovery Cases — Herding Cats Would Be Easier

    Two disturbing cases for different, but similar reasons.

    When did parties jump from collection and culling of documents to simply turning over all possible evidence blindly and relying on a claw back agreement to protect the producing party? Putting aside that works entirely in favor of the receiving party, this may be a viable solution in a very small percentage of cases, but for a defendant to argue to a Court that the Plaintiff should blindly produce backup tapes with only a claw back agreement as protection is ludicrous. That is one side of the argument made in Dynamo Holdings Limited Partnership, et al, Petitioner vs the Commissioner of Internal Revenue; Beekman Vista, Inc vs the Commissioner of Internal Revenue (Docket Nos. 2685-11, 8393-12).

    / Nov 11, 2014 at 4:04 PM
  • Law and money

    Finance

    Financial Services Weekly News Roundup – November 2014

    The Day After: There are still a few undecided races but we know that Republicans will control the House and the Senate in the next session of Congress. This may provide an opportunity for more bipartisan legislation in the financial services area. There is reason to hope that Congress will be able to pass legislation that President Obama will sign that could soften some of the hard edges of the Dodd-Frank Act, such as the effect of regulations intended for large banks on small and regional banks, the application of SIFI rules to insurance companies, the regulation of end-users of derivatives, the broad definition of municipal advisor and the required disclosure of the origin of conflict minerals. In addition, the SEC may now adopt, pare back or drop some proposals that have been on hold, like the crowdfunding rules, amendments to Rule 506 and Form D, and fiduciary standards for brokers. Whatever happens, we’ll be here to cover it.

    / Nov 10, 2014 at 12:56 PM
  • cakepops

    eDiscovery

    Two Basics: Don’t Accept Candy From Strangers and Avoid Falling Into the “Document Dump[s]”

    A recent order issued by M.J. Paul Grewal in Venture Corp. Ltd., et al. v. Barrett, No. 5:13-cv-03384, 2014 WL 5305575 (N.D. Cal. October 16, 2014) provides a useful reminder for all litigators: “Rule 34 (Producing Documents, Electronically Stored Information, and Tangible Things) is about as basic to any civil case as it gets. And yet, over and over again, the undersigned is confronted with misapprehension of its standards and elements by even experienced counsel. Unfortunately, this case presents yet another example.”

    / Nov 10, 2014 at 12:27 PM
  • Technology today's tech

    eDiscovery

    “Reasonable Inquiry”: Complying With Rule 26(g) In The Age Of Technology

    There can be little debate that electronically stored information (“ESI”) has altered the landscape of discovery in civil litigation. The number of devices that transmit or store electronic data as well as the volume of data in existence have increased exponentially in recent years. The rules and underlying principles governing discovery in civil litigation, however, remain largely unchanged. In light of the voluminous available data and the myriad of methods for storing and accessing such data, attorneys should examine their normal practice of gathering information responsive to discovery requests and subject to disclosure, especially when ESI is involved, so they do not fun afoul of their obligations under Rule 26(g).

    / Oct 31, 2014 at 11:11 AM
  • 600px-US-SecuritiesAndExchangeCommission-Seal.svg

    Finance

    SEC Issues Risk Alert, Smacks E*Trade on Penny Stock Sales

    On October 9th the SEC brought a settled administrative action against E*Trade Securities and G1 Execution Services (formerly E*Trade Capital Markets) for their part in the unregistered sales of billions of shares of penny stocks between 2007 and 2011. Suffice it to say that they weren’t the only ones. On the same day the Commission also (1) released FAQs on a broker-dealer’s duties on when trying to rely on the reasonable inquiry exemption when executing customer orders; and (2) issued a Risk Alert on broker-dealer controls regarding customer sales of penny stocks. The gist is, broker-dealers cannot turn a blind eye when executing its customers’ sales of securities of dubious or uncertain origin. These documents are all part of the SEC’s larger effort to focus on financial system gatekeepers and thereby save staff resources that would otherwise be spent chasing individual bad actors. What’s most interesting to me about the case and accompanying educational materials is how old the underlying principles are. The SEC has been preaching about broker-dealer oversight of little-known securities for literally half a century. And yet here we are.

    / Oct 28, 2014 at 3:14 PM
  • R and D signpost

    eDiscovery

    E-discovery Is Hard

    Catchy blog titles are usually hard too, but not this one. Discovery of electronically stored information (“ESI”) is just plain difficult. If you are lucky, it does not come up in your case at all. Or, the parties agree that only certain emails during a certain period of time are relevant to the dispute. If you are unlucky, you might find yourself in the middle of a massive theft of trade secrets case involving customer lists with thousands of names and an email address for each one of them. At that point, expect to spend several months creating an ESI discovery protocol with your opposing counsel – a process of negotiating everything from search terms to custodian/device lists to hard drive/server copying formats, and so on and so forth. Once that part is finished, you still have to engage in discovery according to the protocol.

    / Oct 28, 2014 at 2:55 PM
  • gavel money

    Finance

    Bank Pays $16M to Settle FDIC Charges Over Credit Card Add-On Products

    The Federal Deposit Insurance Corporation (FDIC) reached a $16 million deal with a Utah bank recently, settling charges that the financial institution engaged in unfair and deceptive acts and practices.

    Merrick Bank violated Section 5 of the Federal Trade Commission (FTC) Act in the marketing and servicing of its credit card add-on products, the regulator alleged. From 2008 to 2013, the bank touted its “PAYS Plan” as a payment protection card add-on product that provided a benefit payment toward a customer’s monthly credit card payment when triggered by life events such as involuntary unemployment, disability or hospitalization.

    / Oct 27, 2014 at 4:18 PM
  • keyboard typing

    Technology

    Cybersecurity Litigation Monthly Newsletter

    Significant Case Developments

    P.F. Chang’s Seeks Dismissal of Data Breach Class Actions, Arguing the Existence of an Express Contract and Lack of Damages Preclude Claims
    Lewert v. P.F. Chang’s China Bistro, Inc., No. 1:14-cv-04787 (N.D. Ill.).

    As we described in July and September, P.F. Chang’s was hit with three putative class actions following its announcement of a point-of-sale data breach. On August 29, P.F. Chang’s moved for dismissal of the first two cases, now consolidated in the Northern District of Illinois. In their complaints, plaintiffs John Lewert and Lucas Kosner alleged that by failing to safeguard customer information, P.F. Chang’s breached an implied contract and violated consumer protection laws. The plaintiffs did not bring a breach of express contract claim. P.F. Chang’s argues that the plaintiffs acknowledge the existence of an express contract by alleging that “a portion of the services [they] purchased” at P.F. Chang’s was “compliance with industry-standard measures” for data security and that they were “deprived of the full monetary value of [their] transaction.”

    0 Comments / / Oct 23, 2014 at 5:34 PM
  • Gold Pen with Signature Line of Document

    Finance

    Why do VCs require legal opinions in venture deals?

    Most large venture deals require that the Company’s outside legal counsel issue a customary legal opinion, addressed to the investors in the financing, in order to give the investors comfort that the company’s legal affairs are in order. For companies that have been represented since formation by large regional or national counsel with venture capital experience, this requirement generally is not overly burdensome. However, where counsel has not represented the company since formation or is unfamiliar with VC deals, the legal opinion can become an expensive part of the process and a potential delay in the timing of the financing. Below is a short primer on why VCs require legal opinions and the process and cost typically required for a law firm to issue such an opinion.

    / Oct 23, 2014 at 4:58 PM
  • Attractive businesswoman holds magnifying glass, isolated

    eDiscovery

    Are Attorney-Expert Communications Discoverable in Pennsylvania? (Almost never) — Some Clarity from the Appellate Courts

    In Pennsylvania, testifying experts usually are not deposed before trial; typically, their written reports are provided in advance of trial and delineate the substance and scope of their testimony. Attorneys often wish to communicate with their client’s expert and comment on drafts of the reports. Until April 2014, the law was not clear whether these communications were discoverable. This uncertainty made it problematic and potentially perilous for a party’s attorney to communicate with the party’s testifying expert, particularly in advance of the disclosure of the expert’s report. In Barrick v. Holy Spirit Hosp. of the Sisters of Christian Charity, No. 2014 WL 1688447 (Pa. Apr. 29, 2014), the Justices of the Supreme Court of Pennsylvania took up the issue of the discovery of attorney-expert communications and split 3-3. This left intact the Superior Court’s bright-line rule preventing discovery of attorney-expert communications—a rule now to be applied by Pennsylvania trial courts.

    / Oct 22, 2014 at 1:09 PM
  • US-Flag-Grouping

    Federal Government, Technology

    Chip-and-PIN is Coming…To the US Government

    Last Friday, in the wake of numerous data breaches, President Obama signed a new Executive Order that will change how federal agencies use payment cards and allow access to certain government portals. Those changes include the adoption of chip-and-PIN (also known as EMV) payment terminals and cards, and the implementation of multi-factor authentication on digital applications where consumers can access personal information.

    / Oct 22, 2014 at 11:43 AM
  • 600px-US-SecuritiesAndExchangeCommission-Seal.svg

    Finance

    FINRA Again Cautions Against Confidentiality Provisions Silencing Whistleblowers

    As reported this week by Law360 (subscription required), the Financial Industry Regulatory Authority (FINRA) recently issued a reminder (Regulatory Notice 14-40) warning firms against the use of confidentiality provisions in settlement agreements that prohibit or otherwise restrict customers or anyone else (such as current employees) from communicating with the Securities Exchange Commission (SEC), FINRA, or any federal or state regulatory authority regarding a possible securities law violation.

    / Oct 21, 2014 at 4:35 PM
  • ediscovery

    eDiscovery, Technology

    Refuse to Provide Electronically Stored Information in Response to a Subpoena? You Could Face Sanctions

    The California Court of Appeal recently provided rare guidance regarding a third party’s obligations to produce electronically stored information (ESI) in response to a subpoena. In Vasquez v. California School of Culinary Arts, Inc. (Sallie Mae) (August 27, 2014, B250600) Cal.App.4th (2014 WL 4793703), the court defined subpoenaed parties’ obligations to extract existing data from computer systems and upheld an award of attorneys’ fees against the recalcitrant third party. The court concluded that it is unreasonable for a third party to withhold ESI that exists in its computer systems on the basis that outputting the ESI entails creating a “new” spreadsheet.

    / Oct 21, 2014 at 3:35 PM

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