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. (more…)
FED Releases Second Set of FAQs on Durbin Rules
The Federal Reserve Board recently posted a second set of questions and answers to the “Frequently Asked Questions About Regulation II (Debit Card Interchange Fees and Routing)” on the Fed’s website. This current release of FAQs has been merged with the previously published FAQs, with the newer questions annotated with the date added. For a summary of the new issues addressed in the FAQs, please click here to read the Alert published by the Financial Institutions Client Service Group on November 28, 2011.
FinCen Issues FAQs and Holds Webinar on Prepaid Access Rule
The Financial Crimes Enforcement Network ( “FinCEN”) recently released a set of FAQs related to the final rule on prepaid access that was issued on July 29, 2011 (the “Rule”). The FAQs are intended to provide interpretive guidance for the Rule, not supersede or replace any part of it. FinCen also recently gave a webinar presentation on the Rule. The most significant clarifications to the Rule made by FinCen are discussed in an Alert published by the Financial Institutions Client Service Group on November 28, 2011. To read this discussion, please click here.
Supreme Court to Determine Whether Corporations Are Liable in U.S. Courts for Human Rights Violations Committed Abroad
The U.S. Supreme Court may soon decide the extent to which corporations may be sued for alleged human rights violations which arise in connection with their business activities outside the U.S. The Court has granted certiorari petitions in two cases brought against corporations for alleged human rights violations committed abroad. In each case, the claims were discussed by a Court of Appeals on the ground that corporations are immune from such suits. The cases will be argued in tandem, even though different statutes apply. To read more the cases and the statutes being applied, please click here for the Alert published by the Commercial Litigation Client Service Group on November 11, 2011.
NLRB Postpones Effective Date of “Employee Rights” Posting Requirement
The National Labor Relations Board announced on October 5, 2011, the decision to postpone until January 31, 2012 the effective date of its recently published rule requiring employers to post notices informing employees of their rights under the National Labor Relations Act. The NLRB finalized its new notice-posting requirement in August and at that time announced that the rule would take effect on November 14, 2011. However, federal lawsuits were filed challenging the rule and prompting many questions and uncertainty from employers across the nation. To learn more about the rule, please click here to read the Alert published by the Labor & Employment Client Service Group on October 6, 2011.
The Computer Fraud and Abuse Act (CFAA) — The Benefits of a Computer Use Policy That Restricts Employee Access
Employers that provide employees unfettered access to company computer systems may unwittingly forfeit a valuable statutory remedy against the misappropriation of electronic data. Such employers should ensure that they have a computer use policy in place that explicitly distinguishes between authorized and unauthorized use. To learn more about the Act and the federal avenue it provides to pursue employees who have misappropriated electronic information, please click here to read the Alert published by the Labor & Employment Client Service Group on October 27, 2011.
Qualified Retirement Plan Limits for Calendar Year 2012
The IRS has announced its 2012 cost-of-living adjustments for retirement plans. To access a chart reflecting the qualified plan limits for calendar years 2009-2012, please click here for the Alert published by the Employee Benefits & Executive Compensation Client Service Group on October 24, 2011.
FINCEN Issues a Notice of Proposed Rulemaking Requiring Cross-Border Report for Prepaid Cards
The Financial Crimes Enforcement bureau has released a proposed rulemaking that would require consumers holding prepaid cards aggregating more than $10,000 in value to report the cards when crossing into or out of the U.S., in the same way that they report cash, travelers checks and other monetary instruments. Please click here to read the Alert published by the Financial Institutions Client Service Group on October 18, 2011.
Social Media and the National Labor Relations Act: A Trap for Unwary Employers
The use of social media has become one of the most rapidly-changing areas in employment law today. What most employers do not realize is that the National Labor Relations Board has become very active in policing both the substance of social media policies and the actions of employers in addressing social media concerns. Please click here to read an overview of NLRB activity in the area of employee use of social media published by the Labor & Employment and Internet & New Media Client Service Groups on September 23, 2011.
Check It Out and Check It Off: 2012 Group Health Plan Checklist
While the Patient Protection and Affordable Care Act, as amended (“PPACA”), required significant design changes for group health plans in 2010 or 2011, some additional requirements must be implemented for 2012. Please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on September 7, 2011.
IRS Establishes a Voluntary Classification Settlement Program
The IRS recently announced a new settlement program for employers with misclassified workers. Under the new program, employers can get a significant reduction in their federal employment tax liability associated with past nonemployment treatment by agreeing to properly classify their workers for future tax period. The announcement came on the heels of recent announcements that the IRS, Department of Labor and various state agencies are collaborating on examining worker misclassification issues. To learn more about the new program, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on September 30, 2011.
Department of Labor Issues Final Rule Requiring Follow-On Contractors to Hire Their Predecessor’s Employees
The Department of Labor issued a final rule just before Labor Day that, in effect, will given certain employees now performing under Federal government service contracts employment for life or at least for as long as the government continues to contract for those services. Although the rule does not take effect until the Federal Acquisition Regulation Council issues its complementary regulations, matters are sufficiently final that contractors should begin planning for how they are going to comply. To learn more about this new regulation, click here to read the Alert published by the Government Contracts Team on September 8, 2011.
U.S. House Panel Hears Divergent Opinions on SRO Oversight of Investment Advisers
Fund managers and other investment advisers should be aware that Congress is now considering legislation that would significantly alter regulation of the nation’s registered investment advisers. A key House subcommittee has heard widely divergent views on the proposed legislation entitled the “Investment Adviser Oversight Act of 2011.” To learn more about the draft legislation, click here to read the Alert published by the White Collar Defense and Investigations Securities Litigation and Enforcement Client Service Groups on September 20, 2011.
New Patent Reform Bill Poised to Significantly Change U.S. Patent Law
On September 8, 2011, Congress approved the Leahy-Smith America Invents Act of 2011. The Act materially alters a long history of patent law in the United States. Among the provisions addressed by the Act are who is entitled to a patent (“first to file” versus ”first to invent”) and who may file a “false marking” lawsuit. To read more about how the Act alters patent law, please click here to read the Bulletin published by the Intellectual Property Client Service Group on September 12, 2011.
FinCEN Issues Final Rule on Prepaid Access; Extends Compliance Date for Many Aspects of the Final Rule
New anti-money laundering regulations that directly impact retail business that issue or sell gift cards or other prepaid cards were issued by the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), The regulations require the collection and verification of customer information when certain prepaid cards are sold or reloaded. To read an overview of the Final Rule, please click here for the Alert published by the Financial Institutions Client Service Group on September 6, 2011. The Final Rule was set to go into effect on September 27, but FinCEN announced that it has extended the compliance date for most aspects of the regulations. For information on how the compliance dates changed, please click here to read the Alert published on September 12, 2011.
New Dual/Third Country National Rule Continues to Present Challenges
A new rule took effect in August which amended the International Traffic in Arms Regulations (ITAR) to include a new license exemption for the transfer of defense articles to dual/third country national employees of approved non-U.S. licensees under ITAR agreements. To read about the new rule, please click here for International Regulatory Bulletin published September 28, 2011.
DDTC Updates its “Guidelines for Preparing Electronic Agreements” to Implement New Dual/Third Country National Rule
In August, DDTC updated its “Guidelines for Preparing Electronic Agreements” (the “Guidelines”) to reflect implementation of the new rule and provide guidance to exporters preparing ITAR agreements. To learn more, please click here to read the International Regulatory Bulletin published September 28, 2011.
Electronic Payment of Registration Fees
The Directorate of Defense Trade Controls (DDTC) issued an amendment to the International Traffic in Arms Regulations (ITAR) that requires a change in the method of payment for registration fees. Effective September 26, 2011, all registration fees must be paid electronically via Automated Clearing House. To read about the amendment, please click here for the International Regulatory Bulletin published September 15, 2011.
French Working Time for Executives: Lump-Sum Remuneration Agreements Based on a Fixed Number of Working Days Per Year (so-called Forfaits-Jours)
The legal duration of work for employees in France is 35 hours per week, meaning that any hours required to be worked above this limit would normally be considered overtime. Executives are, however, most often not subject to this limit. For an outline of how the French Labor Code distinguishes between three types of executives, please click here to read the September 2011 Briefing published by the Paris Labor & Employment Client Service Group.
The Agency Workers Regulations 2010
UK’s new Agency Workers Regulations come into force on 1 October 2011. The regulations are intended to give agency workers the same basic employment rights and conditions as permanent staff employed directly by the relevant company. To learn about the new regulations, please click here for the September 2011 Briefing published by the London Labour and Employment Client Service Group.
China Announces Legal Changes That May Broaden Power to Investigate Bribery
In August the National People’s Congress of the People’s Republic of China released the draft Criminal Procedure Law Amendment to the public for comment. If passed, the amendment is expected to provide additional protection to the civil rights of accused parties. However, critics say that the amendment would also provide authorities legal cover to utilize secret locations to detain subjects suspected of engaging in acts involving national security, terrorism, or other serious crimes which may include serious bribery. To read about the amendment, please click here for the International Regulatory Bulletin published September 27, 2011.
Federal Judge in Missouri Dismisses Legal Challenge to Health Care Reform
The Judge in the U.S. District Court for the Eastern District of Missouri, Southeastern Division, entered an order dismissing a lawsuit filed by Lt. Gov. Peter Kinder that challenged the Patient Protection and Affordable Care Act. Kinder et al v. Geithner et al. was filed in July 2010 by Kinder, joined in by six other Missouri residents, as a private citizen after the state’s attorney general declined to join other states in challenging the health care law. To read more about the order in this case, please click here to see the Alert published by the Life Sciences and Health Care Client Service Group on May 3, 2011.
FTC Cracking Down on Affiliate Advertisers
In April the FTC filed 10 lawsuits against companies and individuals that run affiliate advertising websites. These lawsuits come within two months of an earlier round of lawsuits targeting affiliate advertising programs. The most recent targets are fake news websites that promote weight loss products. To learn more, please click here to read the Alert published by the Retail Team on May 5, 2011.
Arbitration Clauses May Waive Class Proceedings
The U.S. Supreme Court recently ruled that the Federal Arbitration Act does not allow state law to invalidate class action waivers in arbitration agreements on the basis of unconscionability. While AT&T Mobility v. Concepcion involved consumer claims, the language of the ruling will bolster enforceability of class action waivers in employment related arbitration agreements. To read more about the ruling, click here for the Alert published by the Labor & Employment Client Service Group on May 18, 2011.
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W-2 Reporting of Employer-Provided Health Care Costs
The 2010 health care reform legislation included an obligation for employers to inform employees of the cost of their health coverage. The IRS has now issued Notice 2011-28, which provides interim guidance for employers on W-2 reporting of the cost of coverage. For more information, please click here to read the Alert regarding the Notice published by the Employee Benefits & Executive Compensation Client Service Group on April 5, 2011.
Form I-9: Changes to Accepted Documentation
As of May 16, 2011, the documents employees present to employers for I-9 verification are subject to new regulations. The U.S. Citizenship and Immigration Services of the Department of Homeland Security has issued a final rule concerning the list of acceptable documentation. To learn more about the changes in acceptable documentation, please click here to read the Alert published by the Labor & Employment Client Service Group on April 27, 2011.
Reminder for Plan Administrators to Review Confidentiality Procedures for Qualified Retirement Plans
Plan administrators of plans that offer employer stock as an investment alternative should review the disclosures provided to plan participants. Investment in employer stock represents a significant litigation threat for plan fiduciaries. However, the plan fiduciary may be relieved of liability for participant losses resulting from the decision to invest in employer stock if certain disclosures are provided under ERISA Section 404(c). To learn more, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on April 12, 2011.
Pension Plan Reporting of Foreign Bank and Financial Accounts
Representatives of pension plans with interests in foreign financial accounts may be required to report those accounts to the Internal Revenue Service. On February 24, 2011 the Treasury Department issued final regulations greatly expanding the reporting requirements for individuals and entities that hold interests in foreign accounts. To learn more about the regulations, please click here to read the Alert published April 12, 2011 by the Employee Benefits & Executive Compensation Client Service Group.
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If there is a partial Federal government shutdown due to a failure to reach a budget agreement, what effect would this have on the four main Federal banking agencies? The short answer: None.
None of the Federal Reserve System, the FDIC, the OCC, or the OTS receives appropriations from Congress. Instead, each of these Federal agencies is funded through various other sources, as described below. Thus, none of the services or responsibilities of these Federal agencies will be affected if a budget agreement is not reached.
However, many other Federal agencies may be significantly affected by a Federal government shutdown, including, notably for financial institutions, the SEC. We would recommend that institutions with on-going matters with the SEC reach out to their contact persons at the SEC to discuss their situations.
Election Day Implications
Based on this week’s election results, next year’s Senate ratio will be 51 Democrats, 47 Republicans, and 2 Independents who will most likely caucus with Democrats. Nine races have yet to be called in the House of Representatives, but the final Republican net gain will most likely be 64 seats. The House Republican leadership will most likely consist of John Boehner (OH) as Speaker, Eric Cantor (VA) as Majority Leader, Kevin McCarthy (CA) as Majority Whip, and Greg Walden (OR) as Chairman of the House Leadership. The Democratic leadership in the House has not been determined, but current-Speaker Nancy Pelosi (CA) has announced she will run for Minority Leader, current-Leader Steny Hoyer (MD) has announced he will run for Minority Whip, and current-Whip James Clyburn (SC) has also announced he will run for Minority Whip. The most important committee leadership change impacting the financial services industry will be Rep. Spencer Bachus (R-AL) as the next likely chairman of the House Financial Services Committee. Bachus has indicated his top priorities include GSE reform and oversight of the newly empowered CFTC and CFPA. The other important committee leadership changes for the industry will be Rep. Darrell Issa (R-CA) as the next chairman of the House Government Reform Committee, Rep. Dave Camp (R-MI) as the next chairman of the Ways and Means Committee, and Sen. Tim Johnson (D-SD) as the likely new chairman of the Senate Banking Committee.
Debt Panel Returns for Final Votes on Recommendations
Eight months ago President Obama created the bipartisan “National Commission on Fiscal Responsibility and Reform” charged with proposing spending cuts to Congress. Under the leadership of Erskine Bowles and former-Senator Alan Simpson (R-WY), the eighteen member panel will be reconvening next week to vote on final recommendations to Congress before the committee’s December 1st expiration date. However, expectations remain low that any plan can get the 14-vote supermajority required to send the spending cuts to Congress for a vote in December.
October Jobs Report Released
On Friday, the Department of Labor released its October jobs report showing the domestic economy added 151,000 jobs after four months of job losses. However, nearly 15 million people remain unemployed and actively looking, and the unemployment rate, which remained steady at 9.6 percent, has been relatively flat since May.
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Third Circuit Rules Secured Lender Not Entitled to Credit Bid at Sale of Collateral Under a Cramdown Plan
On March 22, 2010, the Third Circuit in a split decision joined the Fifth Circuit in holding that a debtor may sell its assets under a plan of reorganization without permitting a secured lender to credit bid by offsetting its secured claim against the purchase price. This decision may have major implications for secured lenders and may lead to more contested confirmation hearings and litigation over valuation. For more information, please read the Client Alert published by the Bankruptcy, Restructuring and Creditors’ Rights Client Service Group on March 30, 2010.
Summary of the Federal Reserve Board’s Final Gift Card Rules
On March 23, 2010, the Federal Reserve Board issued its final rule, a summary and analysis of the final rule, and the official staff interpretation of the final rule in connection with Title IV of the CARD Act. The Final Rules are comparable to the proposed rules that were issued in November, and follow the gift card related provisions set forth in the CARD Act. For a brief summary of key provisions of the Rules, please read the Client Alert published by the Financial Institutions Client Service Group on March 29, 2010.
Proposed Amendments to the Federal Sentencing Guidelines Emphasize the Importance of Having an Effective and Compliant Records Management Program – What Every Business Needs to Know
In January, the United States Sentencing Commission published proposed changes to the Federal Sentencing Guidelines. Public hearings on the proposed amendments were held in March. The Commissioners are to take final action on the proposals in April. The amendments will be effective in November, unless Congress intervenes. A major focus of the proposed amendments is on the document retention component of records management. For a discussion of the proposed changes, please read the Client Alert published by the Records Management Team on March 24, 2010.
Yesterday FinCEN announced a new outreach initiative targeted at depository institutions with assets under $5 billion. The outreach initiative builds upon knowledge FinCEN previously gained from its meetings with larger financial institutions. As part of its ongoing outreach efforts, FinCEN is now seeking to engage smaller to moderate size depository institutions who are working to implement the four pillars of the Bank Secrecy Act regulatory regime: (1) policies, procedures and internal controls; (2) designation of a compliance officer; (3) ongoing training; and (4) independent testing.
For more information, please read the client alert published by Bryan Cave LLP’s Financial Institutions Client Service Group on October 15, 2009.