By: William B. Fleming and Joseph Evans “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…
Author: Online Managing Editor
By: William B. Fleming and Joseph Evans 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.…
By: Ramona Ortega On August 29, 2012, the US Securities and Exchange Commission released another round of proposed rules pursuant to Title II of the recently passed Jumpstart Our Business Startups Act (“Jobs Act”). If adopted, the amended rules would significantly reduce prohibitions against general solicitation and general advertisement found in Regulation D under Rule 506 and Rule 144A. President Obama signed the Jumpstart Our Business Startups Act in April of 2012, in an attempt to stimulate job creation by making it easier to raise capital for small businesses and startups. The Jobs Act focuses on web-based platforms such as…
By: Italia Almeida TiVo, an innovation which ushered household entertainment into a new era by introducing the DVR (digital video recording), has its hands full with some big name lawsuits. TiVo is set to take Verizon to trial in a large patent battle this fall. In addition, Tivo is involved in ongoing lawsuits involving Motorola, Time Warner Cable and Cisco Systems. TiVo has been an effective litigant, garnering almost $900 million through various other patent suits. However, the costs of these litigation investments is near astronomical at times. In the recent Q2 earnings report, TiVo reported about $13 million of the…
By: Mark Semotiuk (Editor’s note. This is the third post in a three part series. The first post discussed the history of the GSEs. The second post discussed the roots of the financial crisis and its impact on the mortgage market.) In February of 2011, the Treasury released a whitepaper outlining three possible GSE reform proposals. The first proposal calls for a fully privatized system of housing finance. The second proposal calls for a fully privatized system with an explicit guarantee mechanism that can scale up during times of crisis. Finally, the Treasury proposed a mixed public/private system:…
By: Luis Calvo On August 15, Standard Chartered Bank paid an historic $340 million fine to New York State’s Department of Financial Services to settle claims that the bank helped Iran (and other U.S.-sanctioned nations) funnel money through the U.S financial system. Most in the financial community were shocked that Benjamin Lawsky, a New York state regulator, jumped the gun, acting before and independent of federal regulators. After this daring move by New York regulators, will banks consider moving out of state? Probably not. Many segments of the financial industry have tried to move out of New York, or at…
By: Mark Semotiuk (Editor’s note: This is the second post in a three part series. The first post covers the history of the mortgage market and the advent of modern mortgage securitization practice. This post examines some of the roots of the financial crisis and discusses the impact of the financial crisis on the mortgage market. Look forward to the third installment covering the future of the mortgage market and GSE reform on Saturday) Part II: The Financial Crisis Economic fundamentals supported growth in the homeownership rate through the 1990s, the longest period of economic growth in American history. Around the…
By: Mark Semotiuk (Editor’s note: This is the first post in a 3 part series. Look forward to the next installment this Wednesday) In September 2008, just days before the subprime financial crisis, the Federal Reserve placed mortgage giants Fannie Mae and Freddie Mac into conservatorship. This act represented the collapse of a mortgage system that originated nearly eighty years earlier and arguably triggered the near collapse of the broader financial system. This series of three blog posts provides insight into the central role that Fannie and Freddie played in the collapse of the housing market, the largest asset class…
By: Kirill Kan As of July 2, 2012, a total of 221 Dodd-Frank rulemaking requirement deadlines passed. Only 81 have been met with finalized rules (which will become effective 60 days after publication). Despite such delays, Friday, July 6, 2012 marked a turning point in bringing Dodd Frank into practice when the Securities and Exchange Commission unanimously approved rules and interpretations for key definitions of derivative products. These rules mark a big step toward filling the large regulatory gaps in the derivatives sphere. The rules and interpretations, written jointly by the SEC and the Commodity Futures Trading Commission (“CFTC”), implement…
By: Italia Almeida In 2008, amidst the financial bailouts of many Wall Street firms, one of the biggest and most controversial moves by The Federal Reserve was the creation of special financial investment vehicles to buy toxic assets held by AIG – a move that prevented the insurance giant from completely collapsing. The Fed was able to unwind these assets by buying parts of CRE CDOs (commercial real estate collateralized debt obligations) from counterparties, mainly Wall Street banks, at 100 cents on the dollar, far above the then market value. In return, the banks agreed to cancel credit default swaps…