In American Express Co. v. Italian Colors Restaurant (June 20, 2013) (“Amex”), the Supreme Court reaffirmed that the Federal Arbitration Act (FAA) makes arbitration “a matter of contract,” requiring courts to “rigorously enforce arbitration agreements according to their terms. In Amex, Italian Colors Restaurant, along with other merchants, sued American Express in a class action lawsuit. The plaintiffs alleged that American Express violated antitrust law by compelling merchants to accept American Express credit cards and pay exorbitant rates.
Bank of England Curbs Funding for Lending Scheme to Focus on Small Business Lending
Effective beginning 2014, the Bank of England will scale back the Funding for Lending Scheme (FLS), which was introduced on July 13, 2012, by removing funding supplied to banks for the purpose of stimulating mortgage lending. By doing so, it aims to refocus the program solely towards stimulating business loans for small firms.
The FLS program was originally designed to “[incentivize] banks and building societies to boost their lending to the UK real economy.” Participating banks may borrow UK Treasury Bills in exchange for eligible collateral, which consists of all collateral eligible in the Bank’s Discount Window Facility. According to the Bank, “[l]ending to smaller businesses in 2014 will continue to be encouraged by allowing banks to draw £5 in the scheme for every £1 of net lending to SMEs. The fee for all drawings from the FLS extension will be set at 25 basis points, which is the lowest point of the previous fee scale.”
The U.S. Supreme Court Declines to Hear Internet Tax Law Appeal by Amazon.com and Overstock.com
On Monday, December 2, the U.S. Supreme Court denied petitions for certiorari by Amazon.com and Overstock.com in their cases against the New York State Department of Taxation and Finance. Both appeals challenged the constitutionality of New York Tax Law Section 1101(b)(8)(vi), the 2008 “Internet tax law” sometimes referred to as an “Amazon law” or a “click-through nexus” law, because it affects only the largest internet retailers. The section at issue requires out-of-state Internet retailers that employ in-state web marketing affiliates, such as Amazon.com, to collect state taxes on all sales to New Yorkers, even if the company has no physical presence in the state.
SEC & DOJ: Friends Or Foes In Civil Securities Litigation?
The U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”), have found themselves fighting in the same arena this year as the DOJ aggressively tackled two high profile civil cases. The overlap has sparked speculation as to why the DOJ is poaching territory that is usually under the SEC’s purview.
Potential Cable Industry Megamerger?
News has been spreading in the cable industry about a potential merger or buyout of Time Warner Cable (TWC). Speculation surrounding the possible buyout has been fueled by interest from companies like Comcast, Charter Communications, and Cox.
Supreme Court’s Review of Halliburton: Potential Turn in the Foundations of Securities Class Actions
On November 15, 2013 the Supreme Court agreed to hear Halliburton Co. v. Erica P. John Fund, Inc., a case that has the potential to overturn one of the foundations of securities class actions. In Halliburton, the Court will decide whether to continue applying the fraud-on-the-market doctrine to securities class actions.
CFPB Unveils New Integrated Disclosures Under RESPA and TILA
On November 20, 2013, in a broadcast streamed live on the internet, the CFPB unveiled the long awaited final rule that contains the Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (“RESPA”), Regulation X, and the Truth-In-Lending Act (“TILA”), Regulation Z.
A Pension Dispute Could Have Billion-Dollar Implications for Private Equity Investors
The Obama administration has been fighting to eliminate a “tax loophole” that benefits private equity executives by taxing their profits from investments in companies (“carried interest”) by the capital gains rate of 20 percent instead of the regular income rate of nearly 40 percent. Congress has kept this from happening, but the decision in a recent case by the Federal Court of Appeals for the First Circuit in Massachusetts might put enough power in the hands of the Treasury Department and the Internal Revenue Service to win the fight.
IM Guidance Update Clarifies Stance on Aggregating the Investments of Certain Investors Across Funds to Satisfy Qualified Client Standard
In November 2013, the Division of Investment Management of the Securities and Exchange Commission (the “SEC”) issued an IM Guidance Update regarding the status of certain investors in private funds (including hedge funds and private equity funds) as “qualified clients” as defined in Rule 205-3 under the Investment Advisers Act of 1940 (the “Advisers Act”).
Dodd-Frank’s Aftermath: Moody’s Lowers Credit Ratings
According to Moody’s, Dodd-Frank is the main culprit for its recent downgrade of four major United States banks’ credit ratings. On November 14, the credit rating agency released a report announcing that it lowered the credit ratings of Morgan Stanley, Goldman Sachs, JPMorgan, and Bank of New York Mellon by one notch. To explain, the agency pointed to the new framework implemented by the FDIC under Title II of the Dodd-Frank Act, which “reduce[s] the likelihood and predictability of systemic support” in the event of a bank holding company’s insolvency by shifting costs from the public sector to the private sector, increasing the risk of default.