Legal Developments

CFPB Adopts Strict Liability Standard for Debt Collectors Who Sue or Threaten Suit Over Time-Barred Debt

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On January 19, 2021, the Consumer Financial Protection Bureau (CFPB) published its final debt collection rules in the Federal Register, including 12 C.F.R. § 1006.26(b), which prohibits collections of time-barred debt. Under the new rules, collectors who sue or threaten to sue consumers for time-barred or “zombie” debts ‒ debts for which the statute of limitations already expired ‒ violate the Fair Debt Collection Practices Act (FDCPA).

Dismissal of Chapter 11 Case Calls Into Question Bankruptcy Protections for Cannabis Companies

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Despite a company’s claim that it deals only in legal hemp products, in January, a federal court denied the company’s access to relief under the Bankruptcy Code. U.S. Bankruptcy Court Judge Joseph Rosania, Jr., of the District of Colorado, dismissed United Cannabis Corporation’s (UCANN) Chapter 11 bankruptcy filing, a move that could cause concerns for cannabis companies that may be seeking bankruptcy relief, particularly in the midst of a global pandemic.

The Compliance Monthly: The Outlook for Enforcement Actions Under a Biden Administration

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There was a perception in 2017 when then President-elect Trump took office that white collar enforcement actions under the US Department of Justice (DOJ) might drop dramatically. Many expected the Republican administration to effect policy changes or resourcing decisions that would keep corporations out of the spotlight when it came to major investigations and massive penalties. But, in surveying the last four years, the opposite happened.

SEC Adopts Modernized Framework for Fund Valuation Practices

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On December 3, the SEC adopted Rule 2a-5 under the Investment Company Act of 1940, as amended. Under Rule 2a-5, determining fair value in good faith with respect to what a fund will require: (1) the periodic assessment and management of material risks associated with the determination of the fair value of the fund’s investments,

There’s An App (But Maybe Not A Copyright) For That

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With the software copyright case Google LLC, v. Oracle America, Inc. now being decided by the Supreme Court after hearing oral arguments on October 7, 2020, software developers and the general public may wonder about the potential impact a decision in the case may have on the tech industry. At stake for the parties are the copyright protections afforded to Oracle’s application programing interface (API) previously used by Google to provide the functionality of Google’s highly popular Android mobile operating system installed on billions of mobile devices worldwide.

SEC Proposed Exemption Provides Regulatory Clarity For Unregistered Finders

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On October 7, 2020, the Securities and Exchange Commission (SEC) voted to provide much needed clarity to the regulatory status of so-called “finders” who assist small businesses in raising capital. In a 3-to-2 vote, the SEC proposed a Finder exemption to the broker-dealer registration requirements of Section 15(a) of the Securities Exchange Act of 1934 to allow unregistered natural persons, referred to as finders, to engage in certain limited activities to assist issuers in raising capital from accredited investors.

Executive Private Misconduct

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A file folder with the word "Private" on the front

In recent years, private misbehavior of corporate executives like Harvey Weinstein, Steve Wynn, Leslie Moonves, and Elon Musk has outraged many people around the world. Such misconduct – when made public – has frequently damaged the executives’ public reputations, diminished the value of their companies’ stock, and raised some serious legal and policy issues. Part of the challenge in dealing with misbehaving business executives is that the two bodies of law and regulation that govern much of American business – state corporate law and federal securities law – were largely designed to address the professional duties of executives and not their personal lives. Temple Law Professor Tom Lin proposes an original and workable roadmap for conceptualizing, navigating, and addressing executive private misconduct.

Publication of the Model Business Corporation Act Annotated (5th edition)

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The 5th edition of the MBCAA of course contains the full text of the Model Act, reflecting all amendments and Official Comments through July 1, 2020, including the substantial revisions effected by the 2016 revision of the Model Act, and more recent additions such as the provisions authorizing virtual-only shareholder meetings and public benefit corporations. Extensive additional resources, however, distinguish the newly published MBCAA from other published versions of the Act and, indeed, from other corporate law treatises.