Client Alerts & Publications Archive

Compliance with the Telephone Consumer Protection Act has never been simple, and a number of conflicting and confusing rulings over the last several years have made it that much more difficult. The TCPA contains a confusing array of regulations depending on what kind of phone is being called, who is calling and what purpose the call serves, and whether the person being called has given permission.

The Delaware Court of Chancery recently found that restrictions on the transfer of stock that were not noted on the certificates representing such stock were unenforceable against a stockholder that did not have knowledge of the restrictions at the time the stock was issued.

The Department of Labor recently issued another set of FAQs, focusing on advisors to 401(k) plans. The FAQs generally address two issues. 

In a court filing on August 9, the Department of Labor notified the court that it recently submitted proposed amendments to the three exemptions to its fiduciary rule to the Office of Management and Budget.

This paper, published by the National Association of Bond Lawyers, identifies various issues that arise in connection with the structuring and negotiation of direct purchase transactions, and explores some of the more commonly encountered provisions present in direct purchase documents.

In February 2017, the staff of the Securities and Exchange Commission’s Division of Investment Management issued guidance providing additional clarity on Rule 206(4)-2 under the Investment Advisers Act of 1940.

The former Director of Finance for Ramapo, New York, was found guilty by a federal jury of 20 counts of conspiracy, securities fraud and wire fraud in connection with municipal bonds issued by the Town and by the Ramapo Local Development Corporation, a local not-for-profit corporation to further economic development in the Town.

Effective May 14, 2018, amendments to Municipal Securities Rulemaking Board Rule G-15 and Financial Industry Regulatory Authority Rule 2232 will subject firms to new transaction-related disclosure requirements to retail investors for certain fixed income securities. 

More than a year after the Consumer Finance Protection Bureau submitted a proposed rule to limit consumer financial services contract arbitration clauses, the CFPB sounded the death knell on July 10, 2017, when it released its long-awaited final rule.

On June 12, the Department of Treasury issued the first report in a series regarding regulation of the financial system. The report recommends that high-grade municipal bonds be categorized as Level 2B liquid assets instead of generally being excluded as HQLA currently.
 

On June 12, the Department of Treasury issued the first report in a series regarding regulation of the financial system in a manner consistent with Core Principles set forth in Executive Order 13772 signed by President Trump on February 3, 2017.

In a unanimous decision on June 12, the United States Supreme Court held that a purchaser of defaulted debt who pursues repayment is not a “debt collector” under the Fair Debt Collection Practices Act.

This update includes: 

• Congress Returns from Recess to Tackle Health Care Reform; Obamacare Marketplace Insurer Participation Deadline Looms
• Hospitalist Group Pays $4.2 Million to Settle Upcoding Allegations
• $155 Million Settlement Demonstrates That Failure to Comply with Meaningful Use Certification Requirements May Expose IT Vendors to FCA “False Certification” Liability

The Securities and Exchange Commission announced that it is requesting comments from retail investors and other interested parties on the standards of conduct applicable for broker-dealers and investment advisers.

This update includes:

• CBO Releases Score of House’s American Health Care Act
• United States Files Second False Claims Act Complaint against UnitedHealth This Month 
• Missouri Hospital and Clinic to Pay $34 Million to Settle Allegations That Compensation Paid to Oncologists Violated the Stark Law

Labor Secretary Alexander Acosta confirmed in an Op-Ed in the Wall Street Journal that the Department of Labor fiduciary rule will become applicable on June 9. Along with the Op-Ed, the DOL issued new Conflict of Interest FAQs related to the June 9, 2017 to January 1, 2018 transition period and Field Assistance Bulletin No. 2017-2.

In a recent case, the Sixth Circuit held that under Michigan law a properly perfected assignment of rents bars a debtor from using the rents to fund its operations in a Chapter 11 reorganization.

The Supreme Court continues to redefine the scope of the Fair Debt Collection Practices Act, with one highly anticipated ruling issued this week and another expected before the Court adjourns for the summer in late June.

On December 7, 2016, Public Act 99-0906 was enacted into law, with an effective date of June 1, 2017. The Act calls for updates to Illinois’ Renewable Portfolio Standard, net metering, and energy efficiency standards, as well as a new zero emissions credits plan. 

The American Bar Association’s Section of Taxation submitted a white paper on the history of the tax-exemption of interest on state and local bonds to the Internal Revenue Service.

The May 2015 decision of the U.S. Court of Appeals for the Second Circuit in Madden v. Midland Funding, LLC sent shockwaves through the marketplace lending industry, and nearly two years later the questions generated by this case remain largely unanswered. These questions have been further complicated by the long-awaited remand decision from the U.S. District Court for the Southern District of New York.

This article discusses a financial institution’s obligation to manage risks of its HELOC Home Equity Line of Credit portfolio, focusing on the applicable regulatory requirements and restrictions on the ability to freeze or reduce HELOCs during the draw period.

The Future Energy Jobs Bill was enacted into law on December 7, 2016, as Public Act 99-0906, with an effective date of June 1, 2017. The Act calls for updates to Illinois’ renewable portfolio standards, net metering, and energy efficiency standards, as well as a new zero emissions credits plan.

11 U.S.C. § 1111(b)(1)(A) provides that a creditor holding a non-recourse lien on real property possesses a claim against a debtor’s bankruptcy estate upon the filing of the bankruptcy petition. But what happens to the secured creditor’s non-recourse claim when the property securing the loan has been sold via foreclosure?

This update includes:

• American Health Care Act Passes House, but May Be Stalled in the Senate
• Three HIPAA Corrective Actions Announced in April; First Settlement with Wireless Health Services Provider Costs $2.5 Million
• Blood Testing Laboratory to Pay $6 Million to Settle Allegations of Kickbacks and Unnecessary Testing 

The Financial Industry Regulatory Authority, Inc. recently released additional guidance on social media and digital communications. FINRA previously issued guidance on the use of social media communications in Regulatory Notice 10-06 and Regulatory Notice 11-39.

The Uniform Commercial Code affects financial institutions in countless ways. From duties of care for customers to the banks’ inspection of checks, familiarity with the UCC is critical when examining legal disputes. This alert discusses recent developments in UCC law that provide insight into how courts examine these rules and financial institutions’ responsibilities under the UCC.

On May 1, Tax Notes published a flurry of revocations of private letter rulings that had been issued to regulated investment companies. In each of the revocations, at least one of the rulings requested in the original private letter ruling was that the income from a commodity linked note was qualified income for the purposes of Internal Revenue Code § 851.

On April 19, the House Financial Services Committee posted a “discussion draft” of a revised version of the CHOICE Act. The discussion draft contains most of the provisions in last year’s bill with a number of important changes.

The Municipal Securities Rulemaking Board recently withdrew a proposed rule from consideration by the Securities and Exchange Commission. The rule would have prohibited a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the minimum denomination of the issue stated in offering documents.

This white paper addresses pay for success legislation that has been adopted at the state level, pointing out the various functions of the pay for success financing structure and how individual states have treated these components within their legislation.

The Financial Industry Regulatory Authority, Inc. recently released three Regulatory Notices related to its ongoing review of its members’ involvement in the capital formation process. 

The Financial Industry Regulatory Authority, Inc. recently requested comments on proposed amendments to FINRA Rule 2241 (on equity research) and FINRA Rule 2242 (on debt research) that would create a safe harbor for trading desk commentary distributed to eligible institutional investors subject certain conditions.

2016 was a record year for filings under the Telephone Consumer Protection Act of 1991. In 2016, litigants filed 4,860 TCPA lawsuits, an increase of nearly 32% from 2015. But what does 2017 hold? What can companies who call customers to service or collect debts expect?

This update includes: 

• As Genetic Testing Booms and Fraud and Abuse Scrutiny Increases, Providers Need to Keep Medical Necessity in Mind
• House Republican Leaders Attempt to Revive the American Health Care Act with Risk-Sharing Fund Amendment
• Failure to Conduct a HIPAA Security Risk Assessment Results in Fine and Corrective Action Plan for Federally Qualified Health Center 

On March 27, the U.S. Supreme Court granted certiorari in the case of In re the Village at Lakeridge LLC, under which an appeals court held that a claim of an “insider,” which is not counted for the purpose of creating an accepting impaired class for the purpose of “cramming down” a plan of reorganization over the opposition of a rejecting class, does not retain its status as a claim of an insider for that purpose once transferred to a noninsider third party.

Yesterday the Department of Labor released the final rule delaying the applicability of the DOL fiduciary rule and the related prohibited transaction exemptions to June 9, 2017. The rule was originally set to become applicable on April 10, 2017.

This update includes:

• Amid Deep Program Cuts, President’s Budget Blueprint Increases Health Care Fraud and Abuse Enforcement Spending by 10 Percent
• CMS Rolls Out New Stark Law Self-Disclosure Form
• Kansas Governor Vetoes Medicaid Expansion; Legislature Fails to Override

Since the U.S. Supreme Court’s 2010 decision in Citizens United, which effectively invalidated restrictions on certain corporate political contributions, various shareholder activists and corporate governance advocates have increasingly sought corporate disclosure of such contributions.

The Tax Exempt and Government Entities Division of the Internal Revenue Service announced changes to the information document request process in tax-exempt bond and tax-advantaged bond examinations.

This update includes: 

• Favorable OIG Advisory Opinion Provides Helpful Roadmap in Structuring a Patient Lodging/Meals Assistance Program that Complies With Federal Law
• Kansas Votes to Expand Medicaid, Embracing a Key Measure of the Affordable Care Act; Veto Possible 
• With AHCA Withdrawn, What’s Next for Health Care Reform?  

Since the U.S. Supreme Court’s 2010 decision in Citizens United, which effectively invalidated restrictions on certain corporate political contributions, various shareholder activists and corporate governance advocates have increasingly sought corporate disclosure of such contributions.

On March 1, the Securities and Exchange Commission issued a release seeking comments on proposed amendments to Rule 15c2-12 under the Securities Exchange Act of 1934, as amended.

This update includes:

• American Health Care Act Moves Through House Committees; Floor Vote Scheduled for Thursday
• Large FCA Judgment Against Nursing Home Operators Could Trigger Cross-Default Provisions of Loan Providing Operating Capital to 183 Non-Defendant Co-Obligors
• HIPAA Settlement Underscores Importance of Audit Controls and Timely Mitigation of Issues Identified in Security Risk Assessments
• OIG Reports that State Medicaid Fraud Control Units Recovered $1.9 Billion in FY 2016

On March 13, the Congressional Budget Office released its highly anticipated score of the American Health Care Act, the Republican-proposed replacement bill for the Affordable Care Act.

Before purchasing any debt, distressed investors need to be mindful of what unrestricted subsidiaries are and how they may impact the overall credit of a company or debt recoveries.

This update includes:

• Five Things to Know as the American Health Care Act Moves Through the House
• Hospital Associations and American Medical Association Oppose ACA Replacement Bill 

In a stark reminder to the bankruptcy community of the old adage that “you can run but you can’t hide,” the U.S. Bankruptcy Court for the Southern District of New York recently denied an Austrian bank’s motion to dismiss for lack of personal jurisdiction.

The Department of Labor announced a proposed 60-day delay of the applicability date of the DOL fiduciary rule and related exemptions. The DOL has allowed a 15-day comment period providing all interested parties an opportunity to comment on the proposed delay.