We all expect (or, at the very least, should expect) our elected officials in Congress to follow the laws that they impose on the public, prohibitions on insider trading included. A recent investigation by the Securities and Exchange Commission (“SEC”) into suspicious trades on Capitol Hill show that the House of Representatives (the “House”) may not agree, finding themselves to be above the laws that they create.
Recent Study Reveals High Pervasiveness of Insider Trading
Insider trading happens. That statement probably comes as no surprise to most. News of traders such as Raj Rajaratnam and Rengan Rajaratnam show that insider trading occurs, is frequently prosecuted, and many inside traders face high penalties and even jail time for their illegal trades. But just how pervasive is the practice of insider trading? A recent study by two professors from the Stern School of Business at New York University and one professor from McGill University shows that insider trading actually occurs in a shockingly high number of transactions. According to the study, a quarter of all public company deals appear to involve some kind of insider trading.
When Should Vesting of Equity Grants Accelerate?
The importance of time-based vesting for equity and/or rights to acquire equity granted to founders and subsequent employees of venture-backed companies should not be understated. Equally important is what events should cause the agreed upon vesting schedule to accelerate. While the possible permutations for acceleration are endless, three primary flavors arise with great frequency: (i) termination by the company “other than for cause”, (ii) termination as a result of death or disability, and (iii) change of control. (more…)
Firm Insight: U.S. Supreme Court Affirms That Abstract Ideas Are Patent-Ineligible
In a unanimous decision, the U.S. Supreme Court affirmed the Federal Circuit’s en banc decision that petitioner Alice Corporation’s asserted patent claims are invalid for being directed to a patent-ineligible abstract idea. Applying a two-part framework, the Court held that the claims at issue are drawn to an abstract idea and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.
Read the full article here.
Wall Street Reputation Continues to Suffer, According to Recent Study
Makovsky, a communications company, recently interviewed 225 executives from banks, credit card companies, mutual funds, and other financial services providers about their outlook on Wall Street. The study showed that “81% of Financial Service companies continue to struggle with reputational and customer service issues stemming from the financial crisis six years ago.” (more…)
Eighth Circuit Allows NFL Collusion Case to Move Forward
Court Approves Department of Justice Fraud Case Against Bank of America
Firm Advice: Volcker Rule: Observations on Interagency FAQs, OCC Interim Examination Guidelines
More than six months after the release of final Volcker Rule regulations, banking organizations continue to grapple with a long list of interpretive questions and an opaque process for seeking clarity from the Volcker agencies. Regulatory silence broke for a brief moment this past week in the form of a short interagency FAQ and, from the OCC, interim examination guidelines for assessing banking entities’ progress toward Volcker Rule compliance during the conformance period.
Read the full article here.
Washington Redskins trademark canceled by U.S. Patent Office
The National Football League team, the Washington Redskins, has had the trademark protection for its name and logo removed by the U.S. Patent and Trademark Office. On Wednesday, the federal agency ruled that the name is “disparaging to Native Americans” and thus cannot be trademarked. Under federal law, trademarks that “may disparage persons or bring them into contempt or disrepute” cannot be registered.
SEC Approval of Amendments to FINRA Corporate Financing Rules Will Reduce Burdens on Parties in Public Offerings
The Securities and Exchange Commission (SEC) recently approved two proposals by the Financial Industry Regulatory Authority, Inc. (FINRA) to amend FINRA Rules 5110 (the Corporate Financing Rule) and 5121 (the Conflicts of Interest Rule). The amendments include modifications that will affect not only underwriters and issuers in public offerings, but investment banks acting as independent financial advisors to issuers, and investment funds and other investors that are significant stockholders in public companies.