Can You Hear Me Now? Appeals Court Permits Bulk Collection of Metadata for One More Month

By Martin Salvucci, J.D. Candidate 2018 | Posted on

In a narrow ruling last week, a federal appeals court declined to enjoin the National Security Agency (NSA) from the bulk collection of metadata on domestic phone conversations. Controversy has dogged the once-secret bulk collection program since its existence was first revealed by Edward Snowden. Earlier this year, the same three-judge panel of the United States Court of Appeals for the Second Circuit had ruled that bulk collection fell outside the ambit of the USA PATRIOT Act. Amid heated debate this summer, Congress enacted companion legislation, the USA Freedom Act, which sought a groundwork for an alternative phone records program and proscribed bulk collection after a “transition period” of 180 days.

Although the federal government had obtained permission from the Foreign Intelligence Surveillance Court to operate the bulk collection program for the duration of this transition period, the American Civil Liberties Union (ACLU) sought injunctive relief against the N.S.A. on the theory that bulk collection violates the Fourth Amendment of the United States Constitution. In declining to intervene, the Second Circuit also punted on this constitutional question, suggesting that it would be unwise to address such a complex and weighty topic for the sake of a transition period that is, by definition, finite.

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Mistrial Declared in Dewey & LaBoeuf Case

By Kevin Jones, J.D. Candidate 2018 | Posted on

People v. Davis, the Manhattan criminal trial for three former senior executives from big-time law firm Dewey & LeBoeuf LLP, ended in a mistrial due to a hung jury. The jury of seven women and eight men acquitted each defendant on several counts of falsifying records and remained deadlocked 8-4 on the remaining 93 charges relating to fraud, larceny, and conspiracy. Defendants Steven H. Davis, Stephen DiCarmine and Joel Sanders were originally charged with a total of 151 counts, ranging from minor felonies to grand larceny, a charge that would have potentially made each of them face a prison sentence of 25 years.

According to the prosecution, the three defendants had allegedly stolen over $200 million from insurers and financial firms in a fraudulent scheme that involved manipulating the firm’s accounting reports in an attempt to cover up its dire financial situation. Dewey & LeBoeuf LLP then collapsed and filed bankruptcy in 2012. Experts estimated the firm owed about $245 million to creditors.  Defense counsel rebutted the allegations, contending the demise of the firm related to mass departures of “greedy” partners and that the defendants never had any intention to defraud investors.

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Recap: “The Scott Carey Speaker Series—The Real Estate Lawyer”

By Patrick Atchison, J.D. Candidate 2018 | Posted on

On October 29, 2015, the Berkeley Business Law Journal and the UC Berkeley Department of City & Regional Planning welcomed Leo Pircher ’57, a founding partner at Pircher, Nichols & Meeks, for a Q&A discussion about his career as an industry leading real estate attorney and changing dynamics in real estate law.

A graduate of UC Berkeley ‘54 and UC Berkeley School of Law ‘57, Mr. Pircher began his legal career working in a variety of practice areas including tort litigation, wills & estates, and tax.  After several years of firm work, Mr. Pircher joined J&B Reedly Corporation, which at the time was the largest private equity real estate company in the nation. As corporate counsel, Pircher innovated real-estate tax structures and legal techniques for real estate transactions that remain industry standards to this day.

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All Cash Is Not Created Equal: Basel III’s Liquidity Coverage Ratio & its Effects

By Leke Badivuku, J.D. Candidate 2018 | Posted on

The banking industry, served with a cocktail of financial re-regulation and an anticipated interest rate increase, may be in for a headache.

The banking industry has gradually been adapting itself to the regulation regime introduced by Basel III, introduced after the 2008 Financial Crisis to account for its deficiency in focusing only on capital requirements. The older Basel II regime has been reformed to increase not only the levels of certain “tiers” of capital in capital requirements, but also to encapsulate two additional areas for regulation: liquidity and leverage. Leverage regulations are further set to change. Questions, however, arise as to whether liquidity regulation in this environment is the best time for financial re-regulation.

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Tesla’s Unreliability: Instead of Correcting Issues, Focus Shifts to New Model 3

By Matt Kempf, J.D. Candidate 2017 | Posted on

After Consumer Reports released its annual survey of vehicle reliability on October 20, Tesla Motors Inc.’s stock prices took a significant hit, dropping 6.6 percent that day, and have continued to fluctuate since.

Tesla is no stranger to this type of fluctuation nor to the impacts of publicity. In fact, in May 2013, after Consumer Reports gave the Model S the best review of any car in the magazine’s history, stock prices soared over 40 percent within days. In October of that same year, when reports of two Tesla vehicle fires became public,  stock prices dropped by 10 percent within two days, and when a third fire was reported in November of that year, prices again plummeted. Despite the fluctuations, Tesla has responded with spectacular customer service, innovation, introductions of its vehicles in new markets, and a showing of strong growth.

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Tough Law for Investment Banks in Delaware Courts

By Alan Parker, LLM Candidate 2016 | Posted on

Investment banks are having a rough time litigating in Delaware Courts, and the horizon does not look any clearer. As the presence of investment banks in major merger deals in US becomes almost mandatory, it is easy to observe an ever-growing number of disputes related to alleged conflicts of interests between the investment banks and the multiple parties involved in such transactions. These disputes are mostly resolved in Delaware courts, which are the main venues for merger disputes, as most of the publicly-traded companies are incorporated in such state.

One of the latest lawsuits discussing this kind of conflict of interests is In Re Zale Corporation Stockholders Litigation. As explained in this comprehensive article published by Prof. Steven Solomon, in this case Merrill Lynch (“ML”) was retained by the Board of Directors of Zale Corporation (“Zale”) to advise it on the latter’s buyout by Signet Jewelers Limited (“Signet”) in a $1.4 billion transaction. However, before being retained by Zale, ML pitched to advise Signet on the very same deal, and the former only disclosed that it had previously pitched Signet after the closing of the transaction. Zale accepted a price per share of $21.00, which represented a 41% premium, exactly within the price range suggested by ML’s pitch to Signet.

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Recap: “Practitioner Speaker Series – Life of a Corporate Finance Attorney: A Conversation with Philip Jonathan Tendler, Partner in Pillsbury’s SF Office”

By Vartika Jain, LL.M. Candidate 2016 | Posted on

On October 22, 2015, the Berkeley Center for Law, Business, and the Economy (BCLBE) welcomed Philip J. Tendler, Partner in Pillsbury’s SF Office, for a Q&A discussion about his career and how law school can arm students with the skillset needed to succeed in the wild world of debt finance.

A former equity securities analyst in the Global Energy and Power Group at Schroders, Mr. Tendler joined Pillsbury after graduating from Boalt in 2000.

Travelling back in time, Mr. Tendler reflected on the things he learned in law school that helped him demystify the concepts and themes of finance in his practice. The conversation was weaved around two anecdotes that he shared from his time at Boalt.

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Volkswagen’s U.S. CEO Blames “Individuals” for Dieselgate

By Ben Hinshaw, J.D. Candidate 2017 | Posted on

Volkswagen’s cheating scandal began in September when emissions data gathered from multiple studies of its vehicles found that additional emissions were present during road tests compared to lab tests. It was discovered that several of Volkswagen’s models contained software that switches to a low-emission compliant mode when it detects an ongoing emissions test. Consequently, multiple high-ranking Volkswagen officials have resigned, including the CEO Martin Winterkorn, and the value of the company’s shares dropped significantly since September.

On October 8, 2015, the head of Volkswagen America, Michael Horn, testified in a House of Representative’s hearing about the emissions scandal. Horn claimed that the use of the software was not a corporate decision, but rather something a few employees engineered. As a result, Volkswagen has begun firing or suspending top engineers involved with the diesel engine development.

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Uber Investigates Connection between Data Breach and Lyft CTO

By By Brigid McCurdy, J.D. Candidate 2017 | Posted on

The rivalry between ride-sharing companies Uber and Lyft continues, as Uber probes further into the identity of the hacker responsible for the company’s driver data breach.

In February, Uber announced that a hacker improperly downloaded the names and license numbers of about 50,000 of the company’s drivers. Shortly after announcing the breach, Uber filed a “John Doe” suit in federal court in San Francisco, alleging that the unknown hacker violated provisions of the federal Computer Fraud and Abuse Act. Uber then filed a subpoena request for Comcast’s records, claiming that an unidentified individual using a Comcast IP address had access to the security key that was used in the data breach. U.S. Magistrate Judge Laurel Beeler granted Uber’s subpoena request for Comcast’s records, reasoning that the records would be “reasonably likely” to help find the responsible hacker.

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Square Discloses IPO Plans

By Dori Kojima, J.D. Candidate 2016 | Posted on

On October 14, 2015, Square, the mobile payments start-up, made public its prospectus for its initial public offering. Private investors valued Square at $6 billion and more than two million merchants accepted five or more Square transactions last year. Even so, Square’s recent filing to raise up to $275 million revealed new information on its business and profitability.  While Square reported a revenue jump to $850 million last year, a 54 percent increase from a year earlier, its losses increased to $154 million in 2014. The company also reported a loss of $77 million on $561 million in revenue over the first six months of this year. This means that Square will be pitching investors at a time when the company is unprofitable and investors’ interest in IPO’s may be weakening.

Founded in 2009, San Francisco-based Square freely distributes a square-shaped piece of hardware for mobile devices that enables simple, portable credit card processing by businesses.  Square collects 2.75 percent on each transaction with a share going to credit card networks and other financial intermediaries.

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