January 2012 Client Alerts

February 3, 2012

Authored by: Bryan Cave

Federal Trade Commission Increases Interlocking Directorates Thresholds

On January 24, 2012, the Federal Trade Commission announced its annual revision of the interlocking directorates thresholds under Section 8 of the Clayton Act.  The new thresholds were effective January 27, 2012.   The purpose of Section 8 of the Clayton Act is to prevent a “person” from serving as an officer or director of corporations that compete with one another in the marketplace, unless that competition is very limited.   For more information on the new thresholds, please click here for the January 27, 2012 Alert published by the Antitrust and Competition Client Service Group.

Premerger Notification Thresholds Increased

Effective February 27, 2012, the jurisdictional thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will be increased.  Pursuant to statutory amendments made in 2000, the thresholds are annually adjusted based on changes in gross national product.  One key effect of this year’s indexing is that transactions will only be reported if the Size of Transaction exceeds $68.2 million, an increase over last year’s $66 million threshold.  To read more about the 2012 thresholds, please click here for the Alert published by the Antitrust and Competition Client Service Group on January 27, 2012.

SEC Changes Settlement Policy for Enforcement Actions With Parallel Criminal Proceedings

The SEC announced in January a significant change in its settlement policy for civil enforcement actions in which the defendant is also subject to parallel criminal proceedings.  Under the SEC’s new policy, any defendant who has admitted to or been found guilty of criminal conduct cannot settle parallel SEC charges without also admitting the SEC’s allegations.  For more information on the new policy, please click here to read the Alert published by the White Collar Defense & Investigations and Securities Litigation & Enforcement Client Service Groups on January 13, 2012.

NAD Reviews Use of Facebook’s “Like” Feature in Promotions

In 2010, Facebook offered its users the ability to click a button indicating that they “like” a company or a product.  Once clicked, the “liked” product appears on a user’s Facebook Wall and the user’s screen name or icon could also appear on the company’s Facebook page along with other users who liked the product.   Companies quickly realized the benefit of being “liked,” and encouraged consumers to “like” their products by making incentives available only to those who liked the product.  This practice is often referred to as a “like-gated” promotion.  The use of these promotions has raised consumer protection questions, and the National Advertising Division of the Council for Better Business Bureaus (“NAD”) has recently issued its first decision involving a like-gated promotion.  To learn more about the decision and allegations considered, please click here to read the Bulletin published by the Internet & New Media Group on January 3, 2012.  

FTC Guidance on How to Incentivize Bloggers

One of the advantages of the new media is that it permits others to help advertise a retailer’s products.  The Federal Trade Commission (FTC) takes the position that if a company provides bloggers with a gift, that fact must be disclosed by the blogger to consumers.   The FTC has now provided some guidance on how companies can comply with this obligation.  According to a letter released by the FTC in connection with an investigation, Hyundai’s advertising agency provided bloggers with gift certificates as an incentive to talk about Hyundai’s forthcoming Super Bowl ad.  Although some bloggers disclosed they had received free gift certificates, others did not.  To read more about the FTC’s decision in this matter and how to avoid liability when incentivizing bloggers, please click here to read the January 10, 2010 Bulletin published by the Internet & New Media group.

IRS Announces New Off-Shore Voluntary Disclosure Program Without a Deadline

On January 9, 2012, the IRS announced a third voluntary disclosure program designed to bring offshore money back into the U.S. tax system and to help people with undisclosed income from hidden offshore accounts become current with their taxes.  Unlike the 2009 and 2011 programs, this program will be open for an indefinite period of time.  To learn more, please click here for the Tax Advice and Controversy Client Service Group’s January 2012 Bulletin.

SEC Advisory Committee Recommends Relaxing Restrictions on Solicitation and Advertising in Private Offerings

On January 6, 2012, the Advisory Committee on Small and Emerging Companies established by the Securities and Exchange Commission (SEC) recommended that the SEC take immediate action to permit general solicitation and general advertising in private offerings of securities under Rule 506 of Regulation D where securities are sold only to accredited investors.  For more information on the recommendation and its implications, please click here to read the January 6, 2012 Alert published by the Corporate Finance and Securities Client Service Group.

Third Circuit Issues Opinion in New Jersey Abandoned Property Litigation

The Third Circuit has issued a long-awaited decision in the New Jersey Abandoned Property litigation, NJ Retail Merchants Association v. Andrew Sidamon-Eristoff.  The court affirmed the District Court’s decision in this important escheat case with broad implications for members of the prepaid industry.  As background, in 2010 New Jersey passed an abandoned property law that, if upheld, would have been devastating for gift card and prepaid card issuers doing business in New Jersey.  To learn more about the NJ abandoned property law and the decision in this case, please click here to read the Alert published by the Financial Institutions Client Service Group on January 27, 2012.

‘Tis the Season for Reporting and Commenting

The first quarter of 2012 brings several reporting deadlines required by the Directorate of Defense Trade Controls (DDTC), Bureau of Industry and Security (BIS) and Office of Antiboycott Compliance (OAC).  To learn more about some of the reporting requirements coming up in the first quarter of 2012, please click here to read the International Regulatory Bulletin No. 492 published January 10, 2012.

The New U.S. Sanctions Against Iran

The new economic sanctions legislation signed by the President on December 31st is part of a 565 page defense authorization bill.  In signing the legislation, the President issued a statement saying that the legislation’s Iranian sanctions provisions “would interfere with my constitutional authority to conduct foreign relations by directing the Executive [Branch] to take certain positions in negotiations or discussions with foreign governments” and “that should any application of these provisions conflict with my constitutional authorities, I will treat the provisions as non-binding.”    To learn more about the main provisions of the legislation, please click here to read a January 10, 2012 Memorandum published by the International Trade group.

 Investors Beware:  Dividends from Proceeds of Bribes at Risk

In a civil recovery proceeding under the UK’s Proceeds of Crime Act, a London court has approved an order agreed by Mabey Engineering (Holdings) Ltd with the Serious Fraud Office to repay dividends derived from contracts won by its subsidiary through unlawful conduct.  Please click here to read more in the International Regulatory Bulletin No. 493 published January 13, 2012.