“SEC Loses Again” - and its Stubbornness Begets Bad Publicity

SEC is dealt fresh blow.” “SEC Loses Again.” These are headlines reporting on a New York federal judge’s order granting an injunction1 forbidding the SEC from continuing its internal case against an S&P executive, Barbara Duka, who is accused of giving bonds backed by mortgage debt higher ratings than deserved. The details of the charges are not as important as the fact that a federal judge has again publicly prohibited the SEC from trying a case before its own Administrative Law Judges, rather than in court. In June, the SEC was handed a similar loss in federal court in Atlanta, in an insider trading case against investor Charles Hill.2 Prior to Dodd Frank, all such cases had to be brought in federal court; now that the SEC is flexing its muscle to bring these cases on its home turf,3 it is experiencing significant blow back.

Forum Selection Clauses: Inadvertently Blocking Access to Federal Court?

Among the dense boilerplate language lawyers routinely add towards the end of contracts is a forum (or venue) selection clause. The idea is straightforward: if the parties end up in court, they have already agreed on where to go to court. If I, in New Jersey, have a contract with you, in Arizona, it makes sense for us to agree on where to go to court ahead of time, rather than later spending time and money fighting - in court - about whether we are in the proper state.

Is Your Intern Legally Entitled to Minimum Wage?

Businesses large and small, and especially in those in the creative industries, have long relied on the work of unpaid interns. Young people, eager to get a look inside of these businesses and hoping to create the connections to score full time employment, happily work for free. An additional part of the equation are college programs awarding academic credits for internships and sometimes requiring internships as part of a course of study.

Contractual Magic Words: Beware of the Word “Seal”

People sometimes look at contracts and worry they will be tripped up by “magic words” surreptitiously inserted by a lawyer. It shouldn’t be this way, and contract drafting has evolved from a focus on precise, often Latin or arcane, terminology and towards a focus on accurate content, irrespective of the terminology used. “Witnesseth” need not scare you, and “Representations and Warranties” are effectively synonymous with “guaranties that the following is true.” Unfortunately, though, “Seal” has retained its magic word quality in some states, greatly lengthening the time in which one may sue to enforce a contract. If you see the word “Seal” in a contract, especially near the line for your signature, be very wary of signing it.

Agreeing to Extend the Statute of Limitations

Last month, Delaware Chancery issued a decision casting new light on the operation of statutes of limitations. Simply put, statutes of limitations dictate how long one has to file a lawsuit. The time limits vary widely from state to state and within each state for various types of lawsuits. (For example, in New York, to sue a local government for a personal injury a notice must be filed within 90 days of the injury,

Insider Trading: When is the Information No Longer Secret?

Insider trading is a matter of common law. There is no statute, no law passed by Congress, which decrees that “no person shall trade on the basis of insider or non-public information.” Rather, a web of court decisions has grown interpreting the statutory language of §10(b) of the Exchange Act

Employee or Consultant? NJ Supreme Court Addresses the Issue

Can we classify this worker as a consultant? This is a common question for many businesses. Hiring a consultant rather than an employee can be attractive due to saving on employment taxes and other regulatory burdens. Understanding these calculations, governments have broadly defined the term employee, and periodically audit businesses to ensure compliance.

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