Chances are you have heard about the international showdown that took place this summer between Argentina and a group of New York based hedge funds. The dispute can be traced back to 2001 when Argentina, overwhelmed by its sovereign debt burden, defaulted on payments to bondholders. Argentina attempted to restructure its financial obligations in 2005, however, its efforts were frustrated by the group of funds, who held out on any deal that provided for less than full repayment of $1.5 billion. The hedge funds had bought the defaulted bonds at a heavily discounted rate – the bonds were likely purchased…
Author: John Conte
Anthony Chiasson’s infamous insider trading case has shed much light on the inequity underlying the inconsistencies of tippee liability. The personal benefit requirement and its varying applications within the Second Circuit, unequivocally, is the main inconsistency the case highlights. Much like the game of telephone, the final recipient of inside information may know little about who was at the other end of the chain, how many people were caught in between, how the information has morphed along the way, and most importantly, whether the original tipper personally benefitted from their disclosure. In Chiasson’s appeal, the Second Circuit will be confronted…
In the last few years since the 2010 Dodd-Frank Act was enacted, not much had come of the Volcker Rule until recently. In short, the Volcker Rule is a rule that prohibits banks from engaging in proprietary trading, subject, of course, to a multitude of exceptions. It was not until December 2013 that the proposed rule became the final rule, formally effective on April 1, 2014, but requiring full conformance only by July 21, 2015. This was another extension from the previous conformance date of July 21, 2014, which would have been a full four years after the passage of…
More than three years after the passage of Dodd-Frank, one of its centerpieces is finally here – but it may not have been worth the wait. On December 10, 2013, a final version of the long anticipated and hotly debated Volcker Rule was approved by the Department of the Treasury, the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Securities and Exchange Commission. The Rule, which was meant to curtail bank risk, is commonly referred to as a ban on proprietary trading whereby a financial institution uses the institution’s money to…
This post attempts to explore the implications of Philip Petitt’s article entitled “Groups with Minds of Their Own,” in light of the current controversy concerning the Affordable Health Care Act’s (“ACA”) mandate that requires employers with 50 or more employee’s to provide contraceptive coverage as a part of the employer’s group health care plan (“the mandate”). The central issue, which has been determinative in the circuit courts, is whether secular, for-profit corporations have the capacity to assert claims under the Free Exercise Clause of the First Amendment or under the Religious Freedom Restoration Act. Proponents of the mandate invariably…
Just imagine: in a split second, your hard-earned lifesavings, and the financial security that accompanied it, vanishes. You have just discovered that you are the victim of a Ponzi scheme. Furious, you pledge to take action against every last party responsible for defrauding you. Of course, having just lost all of your savings, you are not in any financial position to engage in expensive litigation. A class action is your only hope in pursuing your cause, as your targets may include the large banks or law firms that facilitated the Ponzi schemer’s actions. In the past, as a means to pursue actions against…
Testimony given at the Federal Accounting Standards Advisory Board’s public hearing held on August 28 in Washington D.C. presents the reasons why the federal government’s current and proposed financial reporting violates the U.S. Constitution and the antifraud provisions of the nation’s securities laws. Understanding the federal government’s fraudulent reporting is critical at a time when the President and Congress are trying to garner public support for their conflicting views of a proper outcome regarding the budget deficit and debt ceiling negotiations. None of the figures that are being used as the basis of public discourse have any relevance to the…
While it stretches the bounds of imagination to think of Mary Jo White as bald and with a small soul patch beneath her lower lip, she and her fellow Commissioners at the U.S. Securities and Exchange Commission (“SEC”) have recently morphed into a role akin to Howie Mandel in his popular television show “Deal or No Deal.” The Commissioners’ more aggressive role in rejecting settlement deals agreed upon by SEC staff and defendants has led to early successes for the Commission, but could lead to unintended negative consequences going forward. SEC staff has reached multiple settlements that were agreed upon…
“Gold 2.0” is what highly visible venture capitalist Tyler Winklevoss has newly dubbed Bitcoin. While the reference doubtless is meant to analogize Bitcoin’s fixed supply to the similar characteristic of the yellow metal, Bitcoiners have perhaps also formed this generation’s gold rush. Coinciding with promises of Bitcoin profits are emerging litigation risks. In the nascent Bitcoin world some have already found themselves in courtrooms. Part I of this series discussed the steps the government has taken to regulate Bitcoin, and also provided a primer explaining the basics of Bitcoin. Part II highlights private Bitcoin-related litigation and discusses alternative ways to…
Bitcoiners beware, in SEC v. Shavers, No. 4:13-cv-416, 2013 WL 4028182 (E.D. Tex. Aug. 6, 2013) the Eastern District of Texas ruled that investments in Bitcoin are “investment contracts” and, thus, “securities” covered by the federal securities laws. This series discusses recent private and government actions concerning Bitcoin which reveal that Bitcoin-related litigation and regulation is on the rise and lawyers are well-served to learn about the legal impact of this virtual currency phenomenon. Part I describes recent government actions and their impact on Bitcoin. Part II explores private actions involving Bitcoin. A. BITCOIN PRIMER For the uninitiated,…