On October 26, 2016, Yahoo made a request to US Director of National Intelligence James Clapper to declassify a surveillance order received by Yahoo in 2015. In early October, Reuters broke news that Yahoo had built a special software to scan customer emails at the direction of the National Security Agency or FBI. The program ran briefly in 2015 before Yahoo’s internal security was able to locate and remove it.
$14.7 Billion Settlement in Volkswagen Dieselgate Scandal
Last Tuesday, October 25, 2016, marked a major step forward in a prolonged ordeal for the hundreds of thousands of Volkswagen diesel owners who have been waiting for over a year to see the scandal resolved.
Fed Governors Have Grown More Exposed To Politics
On October 5, 2016, President and CEO of the Federal Reserve Bank of Richmond,
Jeffrey M. Lacker delivered a speech in which he discussed the U.S. central bank’s governance. He warned that members of the U.S. Federal Reserve’s Board of Governors in Washington can be subject to political influence because they are “less insulated from the political process.”
California’s Draft Regulations Concern Autonomous Vehicle Developers
On the heels of a progressive new bill that will allow Contra Costa Transportation Authority to test autonomous vehicles without human oversight, California issued a regulatory proposal for autonomous vehicle testing that has some members of the automotive industry concerned. On October 19, California’s Department of Motor Vehicle (DMV) met to discuss the current proposal, which automakers have contested on the grounds that certain terms could hinder the further development of autonomous vehicle technology.
Anti-Inversion Regulations Announced
In the last week of September, the U.S. Treasury submitted proposed regulations to the White House Office of Management and Budget to prevent U.S. companies from engaging in so-called “earning stripping”. This practice consists of a foreign controlled-domestic company making loans to its U.S. subsidiary with purposes of accruing deductible interests from its overall earnings. In so doing, the U.S. entity creates a tax expense that reduces its income tax base and shifts its earnings overseas.
EU Opens In-Depth Antitrust Review of Merger between London Stock Exchange and Deutsche Börse
European antitrust regulators announced on September 28, 2016 that they would open an in-depth investigation into the proposed all-stock merger between the London Stock Exchange (LSE) and Deutsche Börse (DB). If the merger goes ahead, LSE shareholders will own 45.6% of the new holding company with the rest being held by DB shareholders. The $28 billion deal was first discussed in May 2000, but the parties didn’t reach a final agreement until March of this year. Shareholders from both exchanges approved the deal in July. The deal is expected to produce £215 million in annual cost savings over five years.
Vitamin C Antitrust Judgment Overturned
CMS Restricts Arbitration Clauses in Nursing Homes
On October 4, 2016, the Centers for Medicare and Medicaid Services (CMS), an agency within the U.S. Department of Health and Human Services (HHS), issued new regulations, providing the first major reform to nursing homes since 1991. The regulations include a ban on pre-dispute arbitration clauses in resident contracts. The regulations, which apply to long-term care facilities that accept Medicare and Medicaid, may affect as many as 1.5 million residents in over 15,000 long-term care facilities.
The Theory of the SEC’s Case Against Leon Cooperman
On September 21, 2016, the Securities & Exchange Commission filed a complaint alleging Leon G. Cooperman, the billionaire hedge fund manager of Omega Advisors, “generated significant illegal profits” due to insider trading. The trading arose when Cooperman purchased additional securities in Atlas Pipeline Partners, a company in the Omega Advisor portfolio, after receiving information that Atlas intended to sell a large portion of its assets. When Atlas announced the sale, its stock price jumped 31%. The SEC alleges that Cooperman agreed to keep the information confidential, and that by trading on it, he violated insider trading laws.
Airbnb Fights New Law on Short-Term Rentals in New York
On October 21, 2016, Airbnb launched a legal battle in the Southern District of New York against the Mayor of New York City, the City of New York, and the state attorney general after Governor Andrew Cuomo signed a bill into law that possesses the potential to significantly impact the company. Airbnb provides an online platform for residential hosts to directly advertise rental listings for their properties and for guests to make reservations for these properties. Airbnb gains revenue by charging service fees on hosts and guests for the booking process. Airbnb asserts that it helps the middle class by providing a supplemental source of income that can be gained from renting out properties via this online platform.