The American Banker’s Association (ABA) filed a petition on December 24, 2013, in the United States Court of Appeals for the District of Columbia challenging a provision of the recently approved final version of the Volcker Rule (the Final Rule) requiring community banks to divest their holdings in a commonly held debt instrument known as Collateralized Debt Obligation backed by Trust-Preferred Securities or TruPS-backed CDO.
2013: The Year of Corporate Venture Capital
Corporate venture capital on the rise
Looking back, 2013 has been the year of corporate venture capital (CVC). Corporate venture capital is a special form of investment of corporate funds directly in external target start-up companies. Corporations decide to pursue CVC projects not only for financial reasons, but also to create a ‘window on technology’, which enables them to early spot and follow innovations.
Corporations have realized that pumping millions of dollars into R&D projects might not be the best way to keep pace in their industries. The fall of tech giants like Kodak and Nokia, who did not sense the winds of innovation, are evidence of the failure of traditional R&D investment. Nowadays, there is another way for corporations to innovate and generate profits at the same time – by becoming active participants in the startup game.
SEC Issues New Guidance On “Bad Actor” Disqualification From Rule 506 Offerings
On December 4, 2013, the staff of the Securities and Exchange Commission (SEC) Division of Corporation Finance issued new guidance regarding the “bad actor” disqualification provisions of Rule 506(d) of Regulation D under the Securities Act of 1933 (Securities Act) and the related disclosure requirements of Rule 506(e) through an update to its Securities Act Rules Compliance and Disclosure Interpretations (C&DIs). The 14 new CD&Is provide important clarification to the final rules approved by the SEC earlier this year and additional guidance to issuers seeking to comply with the new requirements of Rules 506(d) and 506(e) of Regulation D under the Securities Act. This advisory summarizes some of the more significant of these new CD&Is.
Click here to read the entire Advisory.
JoS. A. Bank Thwarts Men’s Wearhouse “Pac-Man” Defense
JoS. A. Bank Clothiers, Inc. turned down a $1.5 billion takeover bid from Men’s Wearhouse, Inc. last week in a move that extinguished the latest, and only, live offer between the two rival men’s clothing retailers.
JP Morgan’s $13 billion settlement with DOJ
JP Morgan will pay $13 billion, the largest settlement any private firm has ever paid to the Justice Department, to settle civil claims about the sale of mortgage backed securities. The firm admitted misrepresenting to investors that mortgage loans complied with underwriting guidelines when, in actuality, these loans were not suitable for securitization. Because the sale of these securities contributed to the 2007 financial crisis, prosecutors sought accountability for the banks that sold such securities. U.S. Attorney General Eric Holder said, “without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown.”
FRB, FDIC and OCC Propose Addendum to Income Tax Allocation Policy; Agencies Provide Standard Provision to be Included in Tax Allocation Agreements
The FRB, FDIC and OCC (the “Agencies”) jointly issued a Goodwin Procter proposed addendum (the “Proposed Addendum”) to the Interagency Policy Statement on Income Tax Allocation in a Holding Company Structure (the “Policy Statement”).
Master Limited Partnerships, newly re-discovered investment structures, are on the rise
A Master Limited Partnership (MLP) is a publicly traded partnership (PTP). It is essentially a partnership, or a limited liability company (LLC) that has chosen partnership taxation, that trades on a public exchange (NYSE, NASDAQ, etc.) or over the counter market.
AAA Makes Substantial Revisions to Commercial Arbitration Rules
The American Arbitration Association (“AAA”) issued new Arbitration Rules and Mediation Procedures governing commercial disputes for AAA commercial arbitrations initiated on or after October 1, 2013. Arbitration proceedings filed prior to October 1, 2013 continue to be governed by the Arbitration Rules & Mediation Procedures amended and effective June 1, 2010. There are a number of significant changes to the Commercial Rules, many of which appear designed to add increased flexibility to the parties and retain arbitration’s promise of a streamlined, cost-effective alternative to traditional litigation.
Facebook Officially Joins S&P 500
After a secondary stock offering, Facebook officially joined the S&P 500, effective as of the close of trading on Friday, December 20. Facebook announced the secondary offering, consisting of 70 million shares of its Class A stock, on Thursday, December 19. Co-founder and CEO Mark Zuckerberg will sell 41.35 million shares; board member Marc Andreessen will sell 1.6 million shares; and Facebook is offering 27.05 million newly issued shares.
Simplification Package Contacts brings some improvement to the EU merger control process – but also increases the burden for business
On 5 December 2013, the EU Commission (the Commission) published revised versions of the filing forms that companies are required to fill out when asking the Commission to authorize a merger or acquisition under the EU Merger Regulation. Specifically, the Commission has revised (i) the standard “Form CO” filing form, (ii) the “Short Form CO” used in unproblematic cases under the simplified review procedure and (iii) the “Form RS” referral request form that merging companies can use to ask for permission to file a transaction below the EU filing thresholds to the Commission or, vice versa, to file a transaction caught by the EU Merger Regulation to specific Member States.