On November 4th, 2013, the SEC announced that it would impose a record-setting $1.2 billion fine on SAC Capital Advisors.1The fine stemmed from a multi-year investigation into allegations of insider trading at the hedge fund.2 US Attorney Preet Bharara described the insider trading at SAC as “substantial, pervasive and on a scale without precedent in…
Category: Blog Articles
Unsustainable Burn Rates
“No one’s fearful, everyone’s greedy, and it will eventually end.”1 Startup companies are burning through cash at unsustainable levels. Almost all failed startups cease to exist because cash runs out, and nearly all startups get close to running out of cash at some point, regardless of outcome.2 Every startup company is fueled by cash investments.3…
New Chapter for Fraudulent Conveyance in LBOs?
In the wake of the 2008 financial crisis, many companies that were the targets of Leveraged Buyouts (LBOs) filed for bankruptcy.1 In an LBO, creditors secure their loans against the target company’s assets, subordinating the claims of the target’s pre-LBO creditors. Thus, should the LBO fail and the target company file for bankruptcy, its pre-LBO…
Citi Faces (a Very Minor) Slap on the Wrist
In response to the financial crisis of 2007-2008, Congress passed the Dodd-Frank Act to bolster financial regulations and monitor Wall Street behavior. Included in the Act were amendments to Rule 506 of the Securities Act of 1933.1 Rule 506 is part of the Regulation D exemption, which allows issuers to raise capital for private offerings….
Non-Competes: Worth Competing For?
The West Coast has a reputation for being more relaxed than the East, and in at least one respect that is certainly true. California has all but done away with non-compete clauses in employment contracts, a legislative change that is loved by the startup community in Silicon Valley and despised by others around the country…
Fundrise for Everyone
Rise Companies Corporation, also known as Fundrise, acts as a crowdfunding and real estate investment platform based out of Washington, D.C. to promote local investment in real estate developments nationwide.1 Officially founded in 2012 –five years after the collapse of America’s financial and housing markets – Fundrise has put real estate crowdfunding on the charts.2…
Feds Increase Scrutiny of Leveraged Loans
The leveraged loan industry has experienced significant growth over the years and reached a record high of $450 billion in 2013.12 As the popularity of these loans increase, so too has the interest in government regulation.3 In March 2013, the Federal Reserve (“Fed”), the Office of the Comptroller of the Currency (“OCC”), and the Federal…
Proposed Staples-Office Depot Merger Will Depend on Relevant Product Market
In 1996, Staples proposed a merger with Office Depot to the FTC and Department of Justice.1 The FTC, however, opposed the merger on the grounds that it “would violate federal antitrust laws by substantially reducing competition in the retail sale of office supply superstores in various markets throughout the country where each firm directly competes…
As Apple Pay Is Set to Launch, Will It Become the Apple of CFPB’s Eye?
As Apple looks to replace the wallet with its new Apple Pay feature, is the technology giant unwittingly exposing itself to regulation from the Consumer Financial Protection Bureau (CFPB)? Apple Pay allows iPhone users to store their credit and debit cards on their phones and pay for purchases using their phones as well—essentially making plastic…
Asian Companies Battle US Companies in Social Messaging War
Giving a new acquaintance your phone number so you can text each other is soon to be a relic of the past. It is now much easier to communicate using social media apps, where users can create group chats, send media files, and even call each other just by using a Wi-Fi connection.1 Exactly why…