On April 5, 2012, U.S. District Court Judge Rosemary Collyer approved the $25 billion settlement negotiated on February 9, 2012, between 49 states and the federal government and five banks – Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and Ally Financial. The deal, the largest multistate settlement since the Tobacco Settlement in 1998, settles federal and state claims against five of the largest banks in the United States for what has become known as “robo-signing”: signing foreclosure related documents outside of the presence of a notary public and without ensuring the documents were correct.
$25 Billion Foreclosure Settlement Approved: What’s Next?
The Network Lecture Series: The Optimal Corporate Bailout – A Presentation by Professor Eric Talley
By Joseph Santiesteban, J.D. Candidate 2013, U.C. Berkeley School of Law, with contribution by Professor Eric Talley, Rosalinde and Arthur Gilbert Professor of Law; Director, the Berkeley Center for Law, Business, and the Economy
Introduction
In 2008-09, when the government spent $350 billion dollars bailing out corporations that it deemed systemically important, it confronted several issues. First, which companies should be bailed out? Second, what should the terms of the bailout be? And third, how should the program be funded. On March 20th at Berkeley Law’s weekly Law and Economics Workshop, Berkeley Law Professor Talley Eric Talley presented “A Model of Optimal Corporate Bailouts,” a paper he co-authored with UCLA Business School Professors Antonio Bernardo and Ivo Welch, which attempts to confront these issues with a theoretical model and compare their results to the Troubled Asset Relief Program (TARP).
Benefit Corporations: A New Corporate Benefit to Society
California is joining a wave of states that have enacted legislation creating new corporate forms that allow for the creation of for-profit companies with a general or specific public benefit. During the 2011 legislative session, California enacted legislation allowing for the creation of a flexible purpose corporation and a benefit corporation. As of January 2012, companies can choose between two new corporate forms that provide directors with the flexibility to pursue social and environmental objectives, while profiting from the corporate decisions. The two new corporate forms differ in many ways despite both benefiting from a legal protection conferred by state statute to pursue social benefits. This article specifically looks at the advantages of a Benefit Corporation.
(more…)
Op-Ed: All Against One – Judge Rakoff’s Lonely Crusade
Since November 28,2011 Judge S. Rakoff of the Federal District Court in Manhattan has been the man of the hour. His refusal to approve a $285 million settlement of the Securities and Exchange Commission (SEC) with Citigroup Global Markets has attracted the attention of all parties involved in alike cases pursued by the SEC. It is not the disapproval itself but rather the reasoning that causes the SEC and future defendants to fear the effectiveness of settlements.
Flexible Purpose Corporation: California’s New Corporate Form
Beginning January 1, 2012, California will be the first state in the country to authorize Flexible Purpose Corporations (FPC)— a new corporate form that will allow a corporation to integrate the for-profit philosophy of the traditional corporation with a special purpose mission that is similar to a charitable purpose. As authorized through the Corporate Flexibility Act of 2011 (SB 201), California companies will have greater flexibility to combine profitability with a broader social or environmental purpose. Entrepreneurs and investors will have the opportunity to organize a company to pursue both economic and social objectives, allowing investors to have multiple or blended objectives. (more…)
FTC Revisits Online Privacy Rules For Businesses Targeting Children
Appealing to children can help to ensure lifetime brand loyalty, as well as provide a fairly direct means of accessing parents’ disposable income. But the interactive environment of the internet creates incentives for businesses not only to transmit messages to children, but also to collect information from them. To counteract the perceived threat to the privacy of children targeted by commercial sites, Congress enacted the Children’s Online Privacy Protection Act (COPPA) in 1998. Now, the FTC is revisiting the Rule implementing the Act, accepting public comment on the proposed changes until November 28, 2011.
Europe’s Debt Crisis – Reasons, Solutions, Perspectives
Parallel to the downgrade of America’s credit rating and its aftermath, there has been another predominant topic in the recent economic news: the European sovereign debt crisis. What appeared to be an internal Greek problem at first glance in early 2010 has now transformed into a serious European issue calling out for a diligent denouement. Considering that continental boundaries are not an obstacle to the spread of a financial crisis, the effects of Europe’s recent struggle on the U.S economy should be considered. (more…)
The Legal And Economic Implications Of The ECJ’s Decision On The Brüstle Patent
The European Court of Justice (ECJ) in Luxemburg ruled on Tuesday, October 18, 2011 in a landmark decision in the case C-34/10 Oliver Brüstle v Greenpeace e.V. and barred a broad range of human embryonic stem cell patents in a market consisting of more than half a billion people. In its ruling, the Court said that “a process which involves removal of a stem cell from a human embryo at the blastocyst stage, entailing the destruction of that embryo, cannot be patented. The use of human embryos for therapeutic or diagnostic purposes which are applied to the human embryo and are useful to it is patentable, but their use for purposes of scientific research is not patentable.”
The Galleon Insider Trading Case: How To Sentence a Seemingly Victimless Crime?
In May 2011, Raj Rajaratnam, founder of the Galleon Group hedge fund, was found guilty on fourteen counts of insider trading. After having initially postponed the sentencing decision, US District Judge Richard Howell sentenced Rajaratnam to 11 years in prison on October 13th. This constitutes the longest prison sentence ever imposed in an insider trading case, though well short of the prosecutions requested 20 to 24 year sentence.
Copyright Slappdown: Could Businesses Use IP Law to Nuke Bad Online Reviews?
In the social media fueled economy, forward-thinking businesses are obligated to be concerned about their reputation on the web – drawing negative heat on a popular site can impact the bottom line.Until recently, a defamation suit against the user was the primary legal prophylactic for bad online buzz.But that was an unappetizing fix, not only because the Communications Decency Act (CDA) places the deep third-party pockets out of reach, but also because such suits carry the risk of running afoul of state anti-Slapp statutes.Now, businesses may have a new tactic – contractually acquiring prospective intellectual property rights in their customers’ online commentary.