Senate, House Bills Offer Banks Clarity On Treatment of Securities Under Volcker
Jan. 10 –Senate Republicans, following lawmakers in the House, have introduced legislation meant to protect community banks from “unintended consequences” brought about by the Volcker rule.
Sens. Mark Kirk (R-Ill.), Mike Crapo (R-Idaho), Pat Toomey (R-Pa.), John Barrasso (R-Wyo.), Mike Enzi (R-Wyo.), Jerry Moran (R-Kan.) and Roger Wicker (R-Miss.) introduced S. 1907, which would amend a provision of bank holding company law regarding prohibitions on investments in certain funds to clarify that such provision shall not be construed to require the divestiture of certain collateralized debt obligations (CDOs) backed by trust-preferred securities or debt securities of collateralized loan obligations (CLOs).
Sens. Warren, Coburn Introduce Bill To Widen Agency Settlement Disclosures
Jan. 8 –A bipartisan pair of U.S. senators introduced a bill Jan. 8 that would require federal enforcement agencies to reveal more details about the settlements they reach when investigating corporate misconduct.
Sens. Elizabeth Warren (D-Mass.) and Tom Coburn (R-Okla.) introduced the Truth in Settlements Act of 2014, to require agencies to publicly post the terms of settlements they make with businesses and individuals, in an effort to bolster government transparency.
Robots, Other Technology Benefit Economy, Don’t Hurt Job Growth, Think-Tank Head Says
Jan. 9 –The argument that rapid technological development is destroying jobs and slowing employment growth is “a very dangerous idea,” the head of the Information Technology and Innovation Foundation said Jan. 9.
“That’s what we would call the Luddite fallacy,” Robert Atkinson, ITIF president, told members of the National Economists Club in Washington, D.C. “From an economic perspective, it’s simply not accurate.”
Israel Considers “Google Tax” on Search Engines for Copyrighted Web Content
Jan. 8 –Israel’s parliament is advancing a legislative proposal to impose a seven percent royalty on Google and other search engine companies that link to locally produced internet content.
Eventually, the law will also apply to social media like YouTube that derive advertising revenue from their Israeli links, Erel Margalit, the bill’s parliamentary sponsor, told Bloomberg BNA Jan. 1.
SEC Enforcement Will Be Aggressive, But Lack of Clarity Problematic, Panel Says
Jan. 8 –The Securities and Exchange Commission will be more aggressive in pursuing individuals in fraud cases this year, but the effectiveness of changes in overall enforcement standards remains to be seen, a panel of lawyers and consultants said Jan. 8.
The SEC will likely expand the kinds of entities and individuals it targets and continue its work in several high-profile cases, according to panelists on a Securities Docket webcast recapping the SEC’s major activities in 2013 and looking ahead to this year. The panel disagreed on how accounting fraud cases have changed over time.
Motorola’s Infringement of Expired Microsoft Patent at ITC Will Carry Over to District Court
Jan. 7 — Motorola Mobility LLC will have to live in district court with a patent infringement decision of the U.S. Court of Appeals for the Federal Circuit as to an International Trade Commission litigation, according to a Jan. 3 nonprecedential order (Microsoft Corp. v. Int’l Trade Comm’n, Fed. Cir., No. 2012-1445, 01/03/14).
New Jersey Bill Mandating Accommodations In Workplace for Pregnancy Goes to Governor
Jan. 7 — The New Jersey Assembly has given final legislative approval to a bill (S. 2995) that says it would expand employment protections for women affected by pregnancy, childbirth or related medical conditions.
The measure, which was approved unanimously in the state Senate Nov. 18, 2013, and by a 78-1 margin in the Assembly Jan. 6, now advances to the desk of Gov. Chris Christie (R).
Black U.S. Bankruptcy Trustee Employee Fails In Bid to Revive State Law Race Bias Claim
Jan. 2 — A federal bankruptcy trustee in Louisiana was entitled to dismissal of a former employee’s race discrimination claim because he wasn’t an “employer” as defined by Louisiana employment bias law, the U.S. Court of Appeals for the Fifth Circuit ruled Dec. 30 (Bell v. Thornburg, 2013 BL 358320, 5th Cir., No. 13-30155, 12/30/13).
States See Little Revenue From Online Sales Tax Laws, Keep Pressure on Congress
Jan. 3 — Most states are seeing scant revenue from their varied attempts to collect tax from online retailers on sales to their residents, but they will continue to push for state laws until Congress or the U.S. Supreme Court settle legal questions about their collection authority on remote sales, state officials and stakeholders told Bloomberg BNA in interviews in November and December.
SEC Staff Issues New Guidance to Clarify ‘Beneficial Owner’ in Bad Actor Provision
Jan. 3 –The Securities and Exchange Commission Division of Corporation Finance Jan. 3 issued new guidance to clarify what constitutes a “beneficial owner” for purposes of the bad actor provision in 1933 Securities Act Regulation D Rule 506.
The bad actor provision–Rule 506(d)–was adopted at the same time that the SEC finalized regulations to eliminate its general solicitation prohibition for private placements under Rule 506 and Rule 144A (129 SLD, 7/5/13).
Law Firm Sanctioned Under Rule 9011 For Filing ‘Baseless’ Adversary Complaint
Dec. 31 –The U.S. Bankruptcy Court for the Central District of California Dec. 11 held that sanctions of $5,000 under Federal Rule of Bankruptcy Procedure 9011 are appropriate against a law firm for filing a “baseless” and frivolous adversary complaint against a Chapter 7 debtor, and failing to conduct a “reasonable and competent inquiry” prior to filing the proceeding (Target Nat’l Bank v. Nelson (In re Nelson), 2013 BL 342730, Bankr. C.D. Cal., No. 6-12-ap-01480, 12/11/13).
Court Revives Claims Based on Boss’s Taunts About Nationality, Disabilities, Veteran Status
Jan. 3 –A communications worker who claims he was treated less favorably and mocked by his boss and others based on his Mexican American national origin, military veteran status and speech impediment raised triable disparate treatment and harassment claims under the Washington Law Against Discrimination, a state appeals court decided Dec. 31 (Alonso v. Qwest Commc’ns Co., 2013 BL 359006, Wash. Ct. App., No. 43703-1-II, 12/31/13).
IRS Says PFIC Shareholder Reporting Not Due for Years Prior to 2013
Dec. 30 –Under temporary rules released by the Internal Revenue Service, U.S. taxpayers will have to file a Form 8621 reporting their investments in passive foreign investment companies under Section 1298(f) for tax years ending on Dec. 31, 2013.
Partial Success for Institut Pasteur in Appeal Of Rejection of Genetic Engineering Patents
Dec. 30 –At least one genetic engineering patent owned by Paris, France-based Institut Pasteur & Universite Pierre et Marie Curie was revived from a Patent and Trademark Office rejection after a Dec. 30 ruling by the U.S. Court of Appeals for the Federal Circuit (Institut Pasteur v. Focarino, Fed. Cir., No. 2012-1485, 12/30/13).
Citing Compliance Difficulties, ACLI Seeks New Extension of FATCA Implementation Date
Dec. 27 –The American Council of Life Insurers has asked the Internal Revenue Service to delay the July 1, 2014, implementation date of the Foreign Account Tax Compliance Act by another six months.
The IRS should extend the start date at least to Jan. 1, 2015, ACLI said. “A July 2013 implementation date is too early a date for government and withholding agents alike when all aspects are taken into consideration,” the group said in a Dec. 26 comment letter on Notice 2013-43, which announced the first six-month delay to the FATCA start date .
Credit Raters Improving in Compliance But Problems Remain, SEC Staff Report Says
Dec. 26 –While nationally recognized statistical rating organizations are improving in meeting their compliance obligations, the Securities and Exchange Commission staff continues to identify problems during examinations of the entities.
In a Dec. 24 report, staff in the SEC Office of Credit Ratings said they found, among other problems, that one larger and five smaller NRSROs did not follow their rating procedures and methodologies in certain instances. In addition, one larger NRSRO did not follow its rating criteria development policies and procedures in some instances.
Trustee May Avoid Debtor’s Entire Transfer To Charity if More Than 15 Percent of GAI
Dec. 27 –A bankruptcy court incorrectly ruled that if a restricted debtor transfers more than 15 percent of his gross annual income to a qualified religious or charitable organization, the trustee may only avoid the portion exceeding 15 percent, the U.S. Court of Appeals for the Tenth Circuit held Dec. 16, on an issue of first impression in the circuit (Wadsworth v. Word of Life Christian Ctr. (In re McGough), 10th Cir., No. 12-1142, 12/16/13).
IRS Unveils Final Agreement for Banks To Sign Up for Direct FATCA Reporting
Dec. 26 — The Internal Revenue Service unveiled the eagerly awaited final agreement for foreign financial institutions (FFIs) that want to sign up for direct reporting of their U.S.-owned accounts under the Foreign Account Tax Compliance Act in Rev. Proc. 2014-13.
District Court Misapplied Standards for TM Abandonment in Wells Fargo-ABD Proceeding
Dec. 23 –A federal district court abused its discretion by determining that Wells Fargo had abandoned the “ABD” trademark after buying out ABD and changing the name to “Wells Fargo,” the U.S. Court of Appeals for the Ninth Circuit ruled Dec. 20 in an opinion designated as not for publication (Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc., 9th Cir., No. 13-15625, unpublished opinion12/20/13). Reversing denial of a plaintiff’s motion for a preliminary injunction, the court also criticized the lower court for failing to separately analyze Wells Fargo’s false advertisement claim for the purposes of showing a likelihood of success on the merits of its claims.
Airline Fees Could Be Target for Additional Taxes, but Move Unlikely to Be Successful
Dec. 23 –Major air carriers lost a battle in the bipartisan December budget deal over a mandated increase in a federal government user fee and may face an even bigger fight in 2014 as some in Congress
push proposals to tax ancillary fees.