As some recent incidents have shown, sometimes smart contracts might not be “smart” (i.e., flawless) enough to achieve what people intend them to achieve, and sometimes even an unintended error in smart contracts could result in substantial, unbearable losses to developer teams and/or investors.
The increasing popularity of online shopping is placing e-commerce businesses—specifically those in the alcohol beverage industry—in legal crosshairs. In lockstep with a recent uptick in website accessibility cases, plaintiff firms are sending pre-suit demand letters to alcohol suppliers and, in some cases, even filing a state or federal court lawsuit. These lawsuits—which are typically filed in California or New York—involve claims that a supplier’s website is not accessible to individuals who are blind in violation of Title III of the Americans with Disabilities Act (ADA) and related state laws. In these cases, plaintiffs seek attorneys’ fees, damages (only under state law) and injunctive relief that would require the website to conform with the Web Content Accessibility Guidelines (WCAG) standards, which have been broadly adopted by courts and regulators.
In CIC Services, LLC v. IRS, the U.S. District Court for the Eastern District of Tennessee invalidated Notice 2016-66 and ordered the IRS to return disclosure documents obtained from taxpayers and material advisors who participated in micro-captive insurance arrangements.
On May 17, 2022, the European Commission (Commission) announced it had conducted so-called “dawn raids” (i.e., unannounced inspections) at multiple undisclosed companies in the fashion industry in several European Union Member States.
Francis J. Serbaroli discusses additional liabilities that lawyers should be aware of when settling Medicare or Medicaid fraud cases for their clients.
Like the federal government, many states have adopted False Claims Act (FCA) provisions that exclude tax matters from coverage. The federal model makes clear that matters under the Internal Revenue Service are not covered by the law, and in the vast majority of cases, states also explicitly exclude tax from coverage. However, there is a growing number of states seeking to extend FCA liability to tax cases in which “knowing” causes of action apply to any person that knowingly conceals, avoids or decreases an obligation to pay the state. In such states, FCA liability, including punitive penalties and damages, will be argued to create liability for certified public accountants (CPAs) and other tax professionals who advise clients to take a favorable tax position on a tax return or simply file a return with an “error.” Under a “knowing” standard, an “error” is asserted to exist when the taxpayer’s position differs from someone else’s view of the law—the reasonableness of the position simply does not matter.
On January 15, 2022, the New York City Council enacted Local Law 32 of 2022 (Wage Transparency Law or Law) to amend the New York City Human Rights Law (NYCHRL) to require that most employers include compensation data in their job advertisements. The Law was supposed to take effect on May 15, 2022, however, it faced criticism over a number of ambiguities, including undefined penalties. In response, on April 28, 2022, the New York City Council passed an amendment to the Wage Transparency Law. Among the biggest changes is that employers now have until November 1, 2022—more than six months—to ensure compliance with the Law’s requirements. If Mayor Eric Adams signs the Law, which he is expected to do, New York City will become the second jurisdiction in the country (the first being Colorado) to require employers to include minimum and maximum potential salary amounts for open positions in job postings.
In our report published on April 26, 2022, we discussed the New York Department of Financial Services’ (NYDFS) Circular Letter No. 5 in which it reminded the industry that acquiring less than 10% of an insurer’s voting securities does not necessarily mean that the acquirer (1) is not a “controller” and (2) does not have to submit a Form A application to the insurer’s home state or domestic regulator seeking approval for the change of control. This topic is one of several related matters that various committees, task forces and working groups of the National Association of Insurance Commissioners (NAIC) are studying and will continue to study over a multiyear period (the Project).
On March 28, 2022, the Securities Exchange Commission (SEC) issued a press release regarding two proposed rules, Rules 3a5-4 and 3a44-2 under the Securities Exchange Act of 1934 (the Act). These proposed rules intend to further define the phrase “as part of a regular business” to identify certain activities that would cause a firm to be considered a “dealer” or a “government securities dealer.” Any firm considered as such, absent exemption, is subject to the registration requirements of Sections 15 and 15C of the Act, and would be required to register with the SEC as well as to become a member of a self-regulatory organization (SRO) such as the Financial Industry Regulatory Authority (FINRA). The firm would then be required to comply with all federal securities laws, as well as applicable SEC, SRO, and Treasury rules and requirements.
On March 30, 2022, the U.S. Securities and Exchange Commission (SEC) approved, by a 3-to-1 vote, a 372-page proposal of numerous rules regarding disclosures and procedural requirements for special purpose acquisition companies (SPACs). SEC Chair Gary Gensler stated that their purpose was to impose many of the regulations applicable to traditional initial public offerings (IPOs) on SPACs, stating that SPAC investors “deserve the protections they receive from traditional IPOs, with respect to information asymmetries, fraud, and conflicts, and when it comes to disclosure, marketing practices, gatekeepers, and issuers.”
The regulations implementing the CCPA require that a business verify the identity of a consumer that submits a specific-information access request to a “reasonably high degree of certainty.”
The Financial Industry Regulatory Authority (FINRA) in November 2022 released a targeted exam letter pertaining to communications for crypto products and services.
It has been a long and heated debate as to whether NFTs and certain cryptocurrencies can be deemed as securities under applicable laws and precedents.
In a prior post, we wrote about the importance of reviewing the terms governing the sale of an NFT to determine what rights, if any, are included in the sale in order to commercially exploit the asset associated with the NFT, and the confusion that emerges in interpreting such terms through the lens of copyright law.
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