Business Commons^™

Cryptoassets And Their Regulation Under Uk And Eu Law In The Post-Brexit Uk, Sarah Jane Hughes, Sara Kobal

Articles by Maurer Faculty

Cryptoassets are used increasingly as stores of value, means of making payments in domestic and cross-border transactions(including person-to-person (“P2P”) payments), and as enterprise solutions for speedier execution of trades in financial instruments or other commerce. Their emergence from the work of Satoshi Nakamoto to real-world applications has prompted attention from legislatures, regulators including law enforcement agencies, service providers and adopters.

The UK, as well as other nations, has used its legislative and regulatory authority to attract crypto-businesses and other financial-services innovators to its shores. Because some nations seek to entice financial innovations and others remain sceptical, tensions will arise between …

Maryland’S Digital Tax And The Itfa’S Catch-22, David Gamage, Darien Shanske, Christopher Moran

Articles by Maurer Faculty

In this installment of Academic Perspectives on SALT, the authors examine whether statelevel taxes on digital advertising — like Maryland’s new tax — are barred by the Internet Tax Freedom Act and discuss how the act’s prohibition against “discriminatory” taxes on electronic commerce should be construed narrowly.

Developments In The Law Affecting Electronic Payments And Financial Services, Sarah Jane Hughes, Stephen T. Middlebrook, Tom Kierner

Articles by Maurer Faculty

This short article surveys developments in the law affecting electronic payments and financial services from June 1, 2017 to June 1, 2018. During this period, significant developments occurred that affected the regulation of initial coin offerings (ICOs), the Office of the Comptroller of the Currency’s proposal to issue “special purpose national bank charters” to FinTech companies, the CFPB’s final regulation of prepaid, general-purpose cards, state regulation of payroll cards, and how lawyers taking cryptocurrencies from clients as payment for services or for safekeeping should protect them. The survey also presents newly issued BitLicenses under the New York Department of Financial …

Taxing E-Commerce In The Post-Wayfair World, David Gamage, Darien Shanske, Adam Thimmesch

Articles by Maurer Faculty

No abstract provided.

Property, Agency, And The Blockchain: New Technology, And Longstanding Legal Paradigms, Sarah Jane Hughes

Articles by Maurer Faculty

This article, presented first as the keynote address at the February 2019 Symposium “The Emerging Blockchain and the Law” at Wayne State, explores the need for repetitive considerations of how blockchain technology affects our traditional concepts of property and agency. The article concludes that well-tested norms of property and agency may matter more, not less, when new technologies such as blockchain are used.

More Steps Toward Fully Electronic Interbank Check Collection And Return: Amendments To Federal Reserve Board Regulation Cc And A Regulatory Resolution Of A Circuit Split, Sarah Jane Hughes

Articles by Maurer Faculty

This article analyzes two actions in 2017 and 2018, respectively, by the Board of Governors of the Federal Reserve System that amend Regulation CC, which governs expedited deposit availability and collection of checks generally and implements the Expedited Funds Availability Act of 1987 and the Check Clearing for the 21st Century Act of 2003. It selects examples from the two sets of amendments that highlight regulatory strategies being used by the Board to facilitate faster payments through the movement of electronic images of checks or electronic information among banks in the check-collection process. Those strategies involve creation of new forms …

Conceptualizing The Regulation Of Virtual Currencies And Providers: Friction Points In State And Federal Approaches To Regulating Providers Of Payments Execution And Custody Services And Products In The United States, Sarah Jane Hughes

Articles by Maurer Faculty

This essay evaluates the state of regulation by the United States government and State legislatures of participants in emerging virtual-currency businesses. It points to friction points as both the federal government and the States experiment with their own regulatory authority over virtual-currency businesses and provides a taxonomy of differing approaches to regulating such businesses. The essay takes the position that the States need to act in the near term if they wish to maintain their longstanding role as regulators of non-depository providers of financial products and services--or they risk being preempted by Congress or federal regulatory actions. This essay also …

Public Regulation And Private Enforcement In A Global Economy: Strategies For Managing Conflict, Hannah L. Buxbaum

Articles by Maurer Faculty

No abstract provided.

"Gatekeepers" Are Vital Participants In Anti-Money-Laundering Laws And Enforcement Regimes As Permission-Less Blockchain-Based Transactions Pose Challenges To Current Means To "Follow The Money", Sarah Jane Hughes

Articles by Maurer Faculty

Two phenomena dominate reports about blockchain-based transactions—that they will disrupt and displace legacy banking, securities, and trade intermediaries, and that they present new or greater opportunities for hiding proceeds of crimes or corruption. This essay does not deal with the former topic. Rather, the organizers of the symposium at George Mason University’s Antonin Scalia School of Law asks me to consider the latter question. It proved to be a tough assignment.

This essay looks at the separate questions of (1) the degree to which permission-less blockchain transactions will disrupt current anti-money laundering (AML) regimes and enforcement efforts, and (2) what …

Two Steps Forward, One Step Back: Developments In The Law Affecting Electronic Payments And Financial Services, Sarah Jane Hughes, Stephen T. Middlebrook, Tom Kierner

Articles by Maurer Faculty

Our past surveys have observed that frequent changes in the rules surrounding electronic payments-spurred by both regulation and enforcement actions create uncertainty and make forward progress difficult for many providers. This survey year is no exception: regulators have taken "two steps forward, one step back" on a number of fronts. This survey reports on (1) the proposal by the Office of the Comptroller of the Currency ("OCC") regarding "fintech" charters, which states have challenged in actions still pending- (2) changes to Regulation CC regarding remote check deposit and disputes over altered or forged checks-(3) the Supreme Court's decision in Expression …

Wayfair And The Retroactivity Of Constitutional Holdings, David Gamage, Adam Thimmesch, Darien Shanske

Articles by Maurer Faculty

This essay analyzes the issue of retroactivity with respect to the Supreme Court case of South Dakota v. Wayfair.

Blockchain Versus Data Protection, Fred H. Cate, Christopher Kuner, Orla Lynskey, Christopher Millard, Nora Ni Loideain, Dan Jerker B. Svantesson

Articles by Maurer Faculty

No abstract provided.

Efficiency Engines: How Managed Services Are Building Systems For Corporate Legal Work, William D. Henderson

Articles by Maurer Faculty

No abstract provided.

Talent Systems For Law Firms, William D. Henderson

Articles by Maurer Faculty

irtually every large US law firm owes its rise and success to a talent system it adopted several decades ago. These talent systems were effective because they created highly skilled business lawyers in a way that aligned the interests of partners, associates, and clients. The most prominent example is the Cravath System, though other business lawyers throughout the US were making similar discoveries at roughly the same time. The tremendous forward momentum of these first-generation talent systems has created the problem of ahistorical partners — owners who collect the late-stage benefits of a talent system approach without understanding its original …

Developments In The Law Affecting Electronic Payments And Financial Services, Sarah Jane Hughes, Stephen T. Middlebrook, Tom Kierner

Articles by Maurer Faculty

No abstract provided.

Ceo Side Payments In Mergers And Acquisitions, Brian J. Broughman

Articles by Maurer Faculty

In addition to golden parachutes, CEOs often negotiate for personal side-payments in connection with the sale of their firm. Side-payments differ from golden parachutes in that they are negotiated ex post in connection with a specific acquisition proposal, whereas golden parachutes are part of the executive’s employment agreement negotiated when she is hired. While side-payments may benefit shareholders by countering managerial resistance to an efficient sale, they can also be used to redistribute merger proceeds to management. The current article highlights an overlooked distinction between pre-merger golden parachutes and merger side-payments. Similar to a legislative rider attached to a popular …

Benchmark Regulation, Gina-Gail S. Fletcher

Articles by Maurer Faculty

Benchmarks are metrics that are deeply embedded in the financial markets. They are essential to the efficient functioning of the markets and are used in a wide variety of ways-from pricing oil to setting interest rates for consumer lending to valuing complex financial instruments. In recent years, benchmarks have also been at the epicenter of numerous, multi-year market manipulation scandals. Oil traders, for example, deliberately execute trades to drive benchmarks lower artificially, allowing the traders to capitalize on the manipulated benchmarks. This ensures that later trades relying on the benchmarks will be more profitable than they otherwise would have been. …

Agora: Reflections On Rjr Nabisco V. European Community: The Scope And Limitations Of The Presumption Against Extraterritoriality, Hannah Buxbaum

Articles by Maurer Faculty

No abstract provided.

Labor Law 2.0: The Impact Of New Information Technology On The Employment Relationship And The Relevance Of The Nlra, Kenneth G. Dau-Schmidt

Articles by Maurer Faculty

The NLRA system of collective bargaining was born during the industrial age of the early twentieth century. As a result, key terms in the statute such as "employee," "employer," and "appropriate bargaining unit" were first interpreted in the context of long-term employment and large vertically integrated firms that dominated this era. Beginning in the late 1970s, the new information technology wrought a revolution in the organization of production increasing short-term contingent employment and the organization of firms horizontally in trading and subcontracting relationships across the globe. To maintain the relevance of collective bargaining to the modern workplace, the interpretation of …

Advancing A Framework For Regulating Cryptocurrency Payments Intermediaries, Sarah Jane Hughes, Stephen T. Middlebrook

Articles by Maurer Faculty

This Article looks at competing models for regulating providers of services to individuals and businesses that take cryptocurrencies in payment for goods and services, including operators of online wallets and exchanges, and other cryptocurrency market intermediaries whose functions resemble "money service businesses" or "money transmission." We conclude that, in addition to whatever "money services" or "money transmission "prudential regulation the States or federal government may adopt, the operation of wallets and exchanges requires a new commercial law that lays out rights and liabilities of cryptocurrency users in a robust and transparent fashion. We use Article 4A of the Uniform Commercial …

Are These Game Changers? Developments In The Law Affecting Virtual Currencies, Prepaid Payroll Cards, Online Tribal Lending, And Payday Lenders, Sarah Jane Hughes, Stephen T. Middlebrook

Articles by Maurer Faculty

In the year since our last survey, there have been significant legal developments in the areas of virtual currencies, prepaid payroll cards, online tribal lending, and payday lending. What connects some of these topics is an increasingly common strategy by federal banking regulators to influence and control the actions of entities that are not directly subject to their supervision through the relationships such entities have with regulated financial institutions. These developments also demonstrate robust state legislative and regulatory action relating to the provision of electronic payments and financial services, and document class actions alleging violations of federal and state laws. …

Did New York State Just Anoint Virtual Currencies By Proposing To Regulate Them, Or Will Regulation Spoil Them For Some?, Sarah Jane Hughes

Articles by Maurer Faculty

This Essay previews issues raised by the general subject of regulating virtual currencies and the specific efforts of New York State’s Department of Financial Services’ proposed Virtual Currency Regulatory Framework (the BitLicense) in particular. It focuses on five topics in the proposal and their interplay with the current regulation of “money services” and “money transmission” in other states, using the Commonwealth of Virginia and the State of Washington approaches on a few common topics for comparison purposes. It also asks whether regulation of virtual currencies is likely to cause more widespread adoption of virtual currencies or to frustrate the proponents …

Human Capital Accounting, William D. Henderson

Articles by Maurer Faculty

No abstract provided.

A Potential Game Changer In E-Commerce Taxation, David Gamage, Andrew J. Haile, Darien Shanske

Articles by Maurer Faculty

In this essay, we evaluate recent legislative proposals for Congress to authorize state taxation of e-commerce. We argue that these proposals contain a potential game-changing innovation — the requirement that states provide remote sellers with “adequate software” for calculating use tax due within the state. Properly implemented, we explain how this innovation could force states to internalize the compliance costs of levying tax collection obligations on remote sellers, thereby incentivizing the states to simplify their sales and use tax statutes and resolving concerns about states overburdening interstate commerce.

Carrots And Sticks: How Vcs Induce Entrepreneurial Teams To Sell Startups, Brian J. Broughman, Jesse M. Fried

Articles by Maurer Faculty

Venture capitalists (VCs) usually exit their investments in a startup via a trade sale. But the entrepreneurial team – the startup’s founder, other executives, and common shareholders – may resist a trade sale. Such resistance is likely to be particularly intense when the sale price is low relative to VCs’ liquidation preferences. Using a hand-collected dataset of Silicon Valley firms, we investigate how VCs overcome such resistance. We find, in our sample, that VCs give bribes (carrots) to the entrepreneurial team in 45% of trade sales; in these sales, carrots total an average of 9% of deal value. The overt …

Independent Directors And Shared Board Control In Venture Finance, Brian J. Broughman

Articles by Maurer Faculty

In most VC-backed firms neither the entrepreneurs nor the VC investors control the board. Instead control is typically shared with a mutually appointed independent director holding the tie-breaking seat. Contract theory, which treats control as an indivisible right held by one party, does not have a good explanation for this practice. Using a bargaining game similar to final offer arbitration, I show that an independent director as tie-breaker can reduce holdup by moderating each party’s ex post threat position, potentially expanding the range of firms which receive external financing. This project contributes to the literature on incomplete contracting and holdup, …

Marketing And Outreach In Law Libraries: A White Paper, Amanda Runyon, L. Cindy Dabney, Carol A. Watson, Liz Mccurry Johnson, Emily Lawson, Shira Megerman, Jamie Summer, T.J. Striepe, Michele Thomas

Articles by Maurer Faculty

In recent years, libraries have turned to marketing and outreach to better educate library users about services and resources while gaining an understanding of their needs. Marketing and outreach are relatively new concepts in academic law libraries, and librarians tasked with these functions have found resources and examples of this type of work to be lacking. Though focused on academic law libraries, the article identifies the challenges facing all law libraries, explains why libraries need marketing and outreach plans, and provides examples of marketing and outreach successes.

Vendor Compensation As An Approach For State "Amazon" Laws: Part 2, David Gamage, Devin J. Heckman

Articles by Maurer Faculty

In this essay, the second of a two-part series, we propose an approach for the U.S. states to tax interstate e-commerce. If the states adequately compensate remote e-commerce vendors for all tax compliance costs, we argue that the states can constitutionally impose use tax collection obligations on the remote vendors in a manner compatible with the Quill framework.

Vendor Compensation As An Approach For State "Amazon" Laws: Part 1, David Gamage, Devin J. Heckman

Articles by Maurer Faculty

In this Essay, the first of a two-part series, we analyze the approaches U.S. states have been using in their attempts to tax interstate e-commerce. We argue that these existing approaches are unlikely to be effective. In our companion Essay, the second in the series, we outline a novel approach that states might employ in order to more effectively tax interstate e-commerce – based on adequately compensating remote vendors for all tax compliance costs. But before we can argue for our new approach, we must first survey the current constitutional and statutory landscape.

The Saga Of State "Amazon" Laws: Reflections On The Colorado Decision, David Gamage, Darien Shanske

Articles by Maurer Faculty

We analyze the Colorado district court’s decision in Direct Marketing Association v. Huber – a decision that permanently enjoined Colorado’s "Amazon" law. Had it not been enjoined, the Colorado law would have mandated information reporting by remote e-commerce vendors so that Colorado could levy its sales and use tax on the e-commerce purchases made by Colorado residents. We evaluate the applicability of the Tax (Anti-)Injunction Act and whether the Colorado statute and regulations should be reviewed as a tax or as a regulation. We also suggest alternative approaches that state legislatures might use in order to levy taxes on remote …