FINRA’s Mandatory Arbitration Provisions The Financial Industry Regulatory Authority (“FINRA”) is a self-regulatory organization that is mandated to oversee the activities of its member brokerage firms, educate investors, and work with the Securities and Exchange Commission (“SEC”). Additionally, FINRA operates the largest securities arbitration forum in the country, with over 3,500 cases filed last year.[1] A unique feature of FINRA arbitration is its prohibition of forum selection clauses. These provisions stipulate the agreed-upon court where an injured party to a contract may dispute the matter. Consequently, these types of clauses clash with FINRA’s mandatory arbitration requirement. In a dispute…
Author: Sean Babar
The cost of solar energy has been dropping in recent years.[1] In the near future, solar energy is predicted to become cheaper in comparison to traditional sources of energy, such as fossil fuel.[2] The increasingly attractive cost of solar energy could precipitate large-scale adoption of the technology.[3] In fact, there is evidence to suggest that renewable energy is responsible for a greater portion of new electricity generation than fossil fuel in recent years.[4] In order to understand where this trend may take us, we need to understand the path that has led to this extraordinary stage of progress. A brief…
Many of us have heard of Huawei, the Chinese tech giant that dominates China’s domestic mobile market and is the second largest smartphone maker in the world (after Samsung but beating Apple).[1] Huawei has a vast and super-fast 5G network around the globe, allowing it to potentially become the world’s tech superpower due to the availability of its network.[2] Some countries, including the United States, ban the sales of Huawei’s equipment within their borders due to national security concerns.[3] However, contracting with Huawei remains attractive to many other countries because it might be cheaper.[4] According to Huawei’s recent announcement, it…
The Securities Act of 1933 (“Securities Act”) strives to allow properly informed investors to safely circulate capital in the securities realm, which in effect permeates into our economy and society.[1] Safe circulation gives investors a sense of confidence in their investing activity, and more activity translates to a thriving economy.[2] Thus, it is imperative for securities laws “to prohibit fraudulent activities of any kind in connection with the offer, purchase or sale of securities.”[3] To curtail such activity, the Securities and Exchange Commission (“SEC”) regulates the securities industry by penalizing entities and persons whose activity violates the regulations of the Securities Act.[4] However,…
The global economy lurched into an unprecedented recession after the 2008 U.S. financial crisis.[1] Years later, the economic failure was billed as the worse market collapse to ever affect a nation since the Great Depression of 1929.[2] However, in the midst of this chaos, on October 31, 2008, Satoshi Nakamoto authored and published a ‘white paper’ on the cryptocurrency[3] mailing list www.metzdowd.com.[4] The white paper announced a theory outlining the creation of the first sustainable [5] cryptocurrency, “[a] purely peer-to-peer version of electronic cash”—Bitcoin.[6] In it, Nakamoto provided an inside look of how Bitcoin’s internal configuration, interspersed with blockchain technology, would work.[7] By doing so,…
We live in an era flooded with modern technology. A lot of us enjoy this. However, the complexity in technology and the ensuing versatility of business deals might lead to pressing legal issues unique to our time. Pending before the United States Supreme Court is Apple v. Pepper, a case concerning the issue of antitrust standing. The petitioner, Apple, presented the following question to the Court: “[w]hether respondents can seek treble damages under § 4 of the Clayton Act, 15 U.S.C. §15, based on their claim that Apple has monopolized the distribution of iPhone apps, where respondents were injured by…
In 2018, the Securities and Exchange Commission (“SEC”) significantly cracked down on unregistered Initial Coin Offerings (“ICO”). Cryptocurrency issuers who previously believed that federal securities laws did not apply to their offerings are now facing SEC enforcement actions. What is notable about these cryptocurrency enforcement efforts is the increased punitive measures against crypto-companies who continued to issue securities after a seminal SEC report[1] on the now defunct Decentralized Autonomous Organization (“DAO”). Pre-DAO Report In 2016, the German company Slock.it UG (“Slock.It”) raised capital through an ICO in the form of Ether (i.e., Ethereum tokens) to fund projects on an autonomous…
What entity generates over $74 billion a year[1] and is funded by both the U.S. government and American taxpayers? If you said the American Prison System (“APS”), then you would be correct. The prison system can increase revenue in many ways, primarily by increasing the number of bodies behind bars. Over the years, prisons have been filled with more and more convicts of non-violent crimes such as possession of small amounts of illegal narcotics.[2] Many federal laws require a minimum sentence, which can range from 5 to 15 years, if an individual is caught with a certain amount of narcotics.[3] …
The dramatic transformation of the American western frontier, from rural farmland to a sprawling urban landscape, is a testament to the capacity of technology to allow us to change our surrounding environment. This trend continues today in places like California, where individuals and corporations continue the historical pursuit of technological advancement through the creation of innovative and bold ideas. However, with so many inventions fading out of popularity, how do we know when a new creation can avoid falling into the abyss of tech one-hit-wonders? This brings us to Bird, an electric scooter sharing platform—similar in concept to Citibike and car-pool…
Director Compensation and The Shift Towards Equity Plans For much of the mid-20th century, executive compensation of salaries and bonuses were largely paid out in cash.[1] Equity-based compensation, namely stock options, became more prevalent beginning in the 1980s, and is now used as a tool to align executive and stockholder interests.[2] However in 1990, a study found that CEO wealth changed only $3.25 for every $1,000 change in stockholder wealth.[3] Equity-based pay increased greatly in the 1990s, growing from 37% of total director compensation in 1993 to 55% in 2003.[4] Today, this type of compensation remains significant, with one…