Client Alerts & Publications Archive

Federal regulators approved final regulations implementing the “Volcker Rule” on December 10, 2013.

In Anderson v. Krafft-Murphy Company, Inc., the Delaware Supreme Court held, inter alia, that (1) contingent contractual rights such as insurance policies may be considered the “property” of a dissolved corporation so long as such rights are capable of vesting and (2) that the Delaware General Corporation Law does not impose a generally applicable statute of limitations that would time-bar claims against a dissolved corporation. The Court reversed the holding of the Chancery Court of the State of Delaware that the relevant dissolution provisions of the DGCL operate to extinguish a dissolved corporation’s liability after ten years from the date of dissolution.

Recent legislative tax reforms proposed by Senate Finance Committee Chairman Max Baucus could have far reaching tax and other economic consequences to many holders of interests in real estate and tangible personal property, whether as investors, lessors, or other business users.

Congressional budget negotiators have agreed on a budget proposal to avoid another looming government shutdown. The budget proposal would increase discretionary spending for fiscal years 2014 and 2015, but would not affect the mandatory sequester amounts for Build America Bonds (BABs) (including Recovery Zone Economic Development Bonds (RZEDBs)) and other direct pay bonds, such as Qualified Zone Academy Bonds (QZABs), Qualified School Construction Bonds (QSCBs), Qualified Energy Conservation Bonds (QECBs) and New Clean Renewable Energy Bonds (NCREBs), for fiscal years 2014 and 2015.

On November 22, 2013, Duke Energy Renewables, Inc., a subsidiary of Duke Energy Corp., plead guilty to criminal charges for violating the Migratory Bird Treaty Act in connection with the deaths of protected birds at its “Campbill Hill” and “Top of the World” wind farm projects in Converse County, Wyoming.

Companies today are being called upon by their shareholders and other stakeholders to not only boost the bottom line, but also to help address some of the country’s most challenging problems, including those concerning economic development and the environment.

Institutional Shareholder Services Inc., a leading provider of proxy advisory and corporate governance services, recently released 2014 updates to its U.S. corporate governance policies.

Under current bankruptcy law, units of local government cannot voluntarily petition for municipal bankruptcy under Chapter 9 without express and specific authority from the state.

The SEC’s final municipal advisor registration rules will become effective on January 13, 2014. The SEC rules have created controversy within the municipal bond community about whether an underwriter will continue to be able to visit clients and pitch ideas without being prohibited from underwriting a resulting bond issue under MSRB Rule G-23.

The majority of power generated in the United States historically has been, and continues to be, generated by large-scale, centrally located generation facilities.

The staff of the Securities and Exchange Commission’s Division of Investment Management recently published guidance to clarify the obligations of registered investment companies when using fund names that suggest safety or protection from loss.

The SEC’s final municipal advisor registration rules will be published in the Federal Register on November 12, 2013, with an effective date of January 13, 2014.

On November 5, 2013, the Securities and Exchange Commission charged the Greater Wenatchee Regional Events Center Public Facilities District, a municipal issuer in the State of Washington, a staff member of the District, a private developer and the president of the Developer with misleading investors in connection with a 2008 offering of Bond Anticipation Notes.

In this issue:

• OCC Guidance on Third-Party Risk Management “Life Cycle”
• Interagency Statement on Fair Lending
• Mortgage Rules Update: CFPB Guidance and Interim Final Rule for Certain Mortgage Servicing Rules

The Government Finance Officers Association recently published a statement of best practices for the use of bank loans (broadly defined as fixed-rate loans with defined maturities and variable rate loans or lines of credit with flexible payment provisions) by state and local governments.

On October 24, 2013, the Board of Governors of the Federal Reserve Board released a proposed rule that introduces a liquidity coverage ratio requirement that will test a bank's ability to withstand "liquidity stress periods." 

The Securities and Exchange Commission recently published a Notice of Filing of a Proposed Rule Change in the Federal Register, seeking comments on the Municipal Securities Rulemaking Board’s recent rule proposals that focus on fair dealing obligations of dealers in municipal securities.

On October 4, 2013, a Chicago bankruptcy court judge decided a case which establishes favorable precedent for the securitization market.

The Financial Industry Regulatory Authority, Inc. recently issued a report providing general observations, commentary and descriptions of effective practices in the area of broker-dealer firms’ conflicts management practices.

On September 18, 2013, the Securities and Exchange Commission unanimously approved final rules for the registration of municipal advisors under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

On September 13, the Securities and Exchange Commission issued a cease and desist order against Public Health Trust of Miami-Dade County, which operates Jackson Health Systems, one of the largest hospital systems in the United States.

Chapman's August 15 Client Alert on PCAOB proposed new auditing standards was published in the October 2013 issue of Financial Fraud Law Report. 

The Financial Industry Regulatory Authority, Inc. recently issued Regulatory Notice 13-31 summarizing the typical approach of FINRA examinations on suitability compliance and highlighting effective practices used by member firms to meet suitability obligations under FINRA Rule 2111.

The Internal Revenue Service Office of Tax Exempt Bonds has announced a new sequester reduction in amounts paid to issuers of direct pay bonds for which issuers elected to receive a direct payment from the U.S. Treasury pursuant to Section 6431 of the Internal Revenue Code.

The Municipal Securities Rulemaking Board recently filed several rule proposals with the Securities and Exchange Commission that focus on fair dealing obligations of dealers in municipal securities.

In today’s mobile society, individuals change their place of residence for a number of reasons: a new job opportunity, a new place for treatment or care, retirement or simply a desire for a change in life.

Pursuant to the American Taxpayer Relief Act of 2012, qualified facilities that begin construction before January 1, 2014 will be eligible to receive the renewable electricity production tax credit under section 45 of the Internal Revenue Code or, in lieu thereof, the energy investment tax credit under section 48 of the Code.

On September 20, 2013, the Environmental Protection Agency proposed regulations aimed at reducing carbon pollution from new fossil-fuel power plants.

On September 18, 2013, the Securities and Exchange Commission adopted final rules for registering municipal advisors.

On September 18, 2013, in accordance with provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Securities and Exchange Commission proposed an executive compensation disclosure rule that, if adopted, will require public companies to calculate and disclose in certain SEC filings (1) the median annual total compensation of all employees of the company, excluding the chief executive officer, (2) the annual total compensation of the company’s CEO and (3) the ratio of those two figures, such figures and ratio hereinafter referred to collectively, as the CEO pay ratio.

The market for distressed investment opportunities in the U.S. has shrunk considerably over the last few years. As a result, U.S. hedge funds have looked to Europe, but they have been disappointed by the minimal and highly selective opportunities.

On August 28, 2013, the Joint Regulators issued a comprehensive re-proposal of the risk retention rules required under Section 941 of Dodd-Frank.

Today the IRS published, in the Federal Register, proposed arbitrage regulations that are applicable to tax-exempt bonds and other tax-advantaged bonds (such as certain tax credit bonds, including qualified zone academy bonds).

 In this issue:

• Foreign Branch Deposits: FDIC Insurance and Depositor Preference
• Business Lending: Compliance with the Spousal Guaranty Provisions of the Equal Credit Opportunity Act
• Payroll Cards
• Fannie and Freddie Exempt from Chicago Ordinance

On August 28, 2013, the Joint Regulators issued a comprehensive re-proposal of the risk retention rules required under Section 941 of Dodd-Frank. 

The Securities and Exchange Commission recently lifted the longstanding prohibition against using general solicitation and general advertising in certain private offerings of securities, as mandated by the Jumpstart Our Business Startups Act.

Governor Patrick Quinn recently signed into law Senate Bill 56, which requires those acquiring foreclosed residential property to honor existing leases or give tenants adequate time to make a safe move.

In this issue:

• Update on Telephone Consumer Protection Act Rules and Recent Cases
• Update on Fair Lending and Indirect Auto Lending
• Mortgage Rules Update

The Securities and Exchange Commission, Commodity Futures Trading Commission and Financial Industry Regulatory Authority recently compiled a set of best practices and lessons learned on business continuity plans and disaster recovery procedures and released an advisory summarizing those findings.

The Municipal Securities Rulemaking Board recently requested comment on proposed rule changes that would consolidate the registration requirements of brokers, dealers, municipal securities dealers and municipal advisors into a single rule.

In an attempt to mitigate damages to tenants and communities as a result of foreclosures, improve rental property and prevent occupied properties from becoming vacant after foreclosures, the City of Chicago has promulgated the Protecting Tenants in Foreclosed Property Ordinance, effective September 3, 2013.

The staff of the Securities and Exchange Commission recently announced that it would not require advisers of private investment funds to hold non-transferable stock certificates or certificated LLC interests obtained in a private placement with a “qualified custodian” under the Investment Advisers Act of 1940 custody rule.

States play an important role in assisting municipalities in times of financial distress. Traditionally, states have attempted to supervise local government financing and limit volatility through the enactment of debt limitations and laws that permit the refunding of municipal obligations.

On June 5, 2013, the SEC proposed certain amendments to Rule 2a-7, which is the primary rule governing money market mutual funds under the Investment Company Act of 1940.

The Commodity Futures Trading Commission recently adopted final rules regarding compliance obligations for commodity pool operators of investment companies registered under the Investment Company Act of 1940.

On August 13, 2013, the Public Company Accounting Oversight Board proposed two auditing standards aimed at increasing the informational value of the audit report to promote the usefulness and relevance of the audit and the related audit report.

The Municipal Securities Rulemaking Board recently requested comment on whether to require dealers to seek “best execution” of customer orders for municipal securities and provide detailed guidance to dealers on how best execution concepts would be applied to municipal securities transactions. 

The Municipal Securities Rulemaking Board recently requested public comment on a consolidated fair pricing rule. The rule change would consolidate the requirements of current MSRB Rule G-18, Rule G-30 and related interpretive guidance into a single general fair pricing rule, Rule G-30. The MSRB proposal seeks to preserve the substance of the existing fairpricing requirements.

The Securities and Exchange Commission recently adopted amendments to the broker-dealer annual reporting, audit and notification requirements of Rule 17a-5 under the Securities Exchange Act of 1934.