Banking and Finance Law Commons^™

Irs's Cp-2000 E-Mail Scams - Never In Dubai - Common In Canada & The Uk, Richard Thompson Ainsworth

Faculty Scholarship

On September 22, 2016 the Internal Revenue Service (IRS) and its Security Summit partners issued an alert to taxpayers and tax professionals to be on guard against fake e-mails purporting to contain a tax bill related to the Affordable Care Act. Surprisingly, this e-mail scam works. It really should not.

Modern technology is facilitating many contemporary tax scams. In recent years the US has seen false (refund) return scams, phone scammers impersonation IRS agents, and now e-mail scams with fraudulent CP-2000 notices attached to a demand for payment. The same phone and e-mail frauds have appeared in both Canada and …

Blockchain, Bitcoin, And Vat In The Gcc: The Missing Trader Example, Richard Thompson Ainsworth, Musaad Alwohaibi

Faculty Scholarship

Blockchain is coming to tax administration and will cause fundamental change. This article considers the potential for blockchain technology as it applies to the introduction of a value added tax in the Gulf Cooperation Council.

Blockchain technology disrupts centralized ledgers. Blockchain improves efficiency, security and transparency. Perhaps no centralized ledger system presents more challenges than that of the modern tax administration. The central data storage system of a modern tax authority contains all return, payment, and audit activity for all taxpayers arranged tax-by-tax for three years or longer periods of time.

It is likely that blockchain will come first to …

Bitcoin Versus Regulated Payment Systems: What Gives?, Lawrence J. Trautman, Alvin C. Harrell

Cardozo Law Review

The article explores the evolution and challenges of virtual currencies like Bitcoin, highlighting their potential to transform traditional payment systems while posing significant regulatory and jurisdictional difficulties. It argues that while virtual currencies offer benefits such as reduced transaction costs and financial inclusion, their decentralized nature and association with illicit activities necessitate a balanced approach to regulation. The article emphasizes the importance of adapting legal frameworks to accommodate innovation while addressing risks, ensuring a stable environment for virtual currencies to coexist with traditional monetary systems.

Finding The Pearl In The Oyster: Supercharging Ipos Through Tax Receivable Agreements, Christopher B. Grady

Northwestern University Law Review

A new, “supercharged” form of IPO has slowly developed over the last twenty years. This new form of IPO takes advantage of several seemingly unrelated provisions of the tax code to multiply pre-IPO owners’ proceeds from a public offering without reducing the amount public investors are willing to pay for the stock. Supercharged IPOs use a tax receivable agreement to transfer tax assets created by the IPO back to the pre-IPO ownership, “monetizing” the tax assets. As these structures have become more efficient, commentators have expressed concerns that these agreements deceive shareholders who either ignore or do not understand the …

What Is At Stake With The Fha?, David J. Reiss

Cornell Law Faculty Working Papers

No abstract provided.

The New Era Of Doing Business With Iran: Iran’S International Commercial Transactions And Global Security, John Changiz Vafai

Pace International Law Review

On January 17, 2016, in a statement following his signing of the Joint Comprehensive Plan of Action (JCPOA) with Iran, President Obama addressed that country’s people, stating that “yours is a great civilization, with a vibrant culture that has so much to contribute to the world – in commerce, and in science and the arts.” While the former U.S. President’s evaluation of the Iranian people’s greatness is indisputable, there are questions concerning doing business with Iran which transcend conventional legal issues and commercial problems.

Given the juxtaposition of Iran’s duopolistic government structure and ideologically oriented decision-making processes, questions arise as …

The Potential Effect Of The Department Of Labor’S New Fiduciary Rule On Broker-Dealers And The Middle Income Retirement Investors Who Rely On Them, Nadia Yoon

Catholic University Law Review

On April 6, 2016, the U.S. Department of Labor issued a final rule aimed at increasing the reach of the definition of fiduciary status under the Employee Retirement Income Security Act of 1974 (ERISA). This rule closed a loophole that had allowed broker-dealers to avoid becoming investment advisers under ERISA, allowing them to provide bad advice to their retirement clients without disclosing material conflicts of interest. This note begins by laying out the fiduciary rules and standards under ERISA and the U.S. Securities and Exchange Commission’s oversight regime before the final rule. It then lays out the relevant details of …

The Other Securities Regulator: A Case Study In Regulatory Damage, Anita Krug

All Faculty Scholarship

Although the Securities and Exchange Commission is the primary securities regulator in the United States, the Department of Labor also engages in “securities regulation.” It does so by virtue of its authority to administer the Employee Retirement Income Security Act (ERISA), the statute that governs the investment of retirement assets. In 2016, the DOL used its securities regulatory authority to adopt a rule that, for the first time, designates securities brokers who provide investment advice to retirement investors as fiduciaries subject to ERISA’s stringent transaction prohibitions. The new rule’s objective is salutary, to be sure. However, this Article shows that, …

A Private Ordering Defense Of A Company's Right To Use Dual Class Share Structures In Ipos, Bernard S. Sharfman

Faculty Scholarship

No abstract provided.

Is The Dodd-Frank Act Destroying What Is Left Of U.S. Thrifts?, Scott Deacle

Business and Economics Faculty Publications

I examine data from 1992 to 2015 to assess the Dodd-Frank Act’s impact on the performance of U.S. depository institutions, thrifts in particular. Ceteris paribus, the average FDIC-regulated institution experienced a decline in profitability as measured by pre-tax return on assets (ROA) following the Act’s passage, but the decline was concentrated among commercial banks. Small thrifts increased pre-tax profitability, after controlling for other factors including weak economic growth. Depository institution loan quality improved after Dodd-Frank, less so for small thrifts but more so for large thrifts. Efficiency ratios, which regulatory costs affect, increased, more for thrifts than banks.

Expanding The Base: A Case For Increased Interprofessional Collaboration In Public Health Law And Policy, Heather A. Walter-Mccable, Marea K. Kinney, Stephanie Q. Quiring, Doug Jerolimov

Law Faculty Research Publications

No abstract provided.

Leidos And The Roberts Court's Improvident Securities Law Docket, Matthew C. Turk, Karen E. Woody

Scholarly Articles

For its October 2017 term, the U.S. Supreme Court took up a noteworthy securities law case, Leidos, Inc. v. Indiana Public Retirement System. The legal question presented in Leidos was whether a failure to comply with a regulation issued by the Securities and Exchange Commission (SEC), Item 303 of Regulation S-K (Item 303), can be grounds for a securities fraud claim pursuant to Rule 10b-5 and the related Section 10(b) of the 1934 Securities Exchange Act. Leidos teed up a significant set of issues because Item 303 concerns one of the more controversial corporate disclosures mandated by the SEC—an …

International Commercial Banking: 2016-17, Benjamin Geva

Osgoode Course Casebooks

Course Number 6874

Whistle While You Work: Interpreting Retaliation Remedies Available To Whistleblowers In The Dodd-Frank Act, Max Birmingham

Florida A & M University Law Review

This Article asserts that judicial activism occurs when a court goes beyond the plain meaning of the text that is plain and unambiguous, to promulgate its politics. This Article does not make the argument nor infer that this is the sole definition of judicial activism. Rather, this Article is narrowing the scope by enumerating a specific act that falls within the category of judicial activism.

This argument proceeds as follows. Part I provides context of judicial activism. Part II analyzes how various courts have interpreted the statute, and whether the interpretation is consistent with canons of construction. Part III assesses …

Revisiting The Bank Holding Company Structure: Do Community And Regional Banks Still Need A Bank Holding Company?, Gerard Comizio, Laura E. Bain, Kristin S. Teager

American University Business Law Review

No abstract provided.

The Rule Of Lenity And The Enforcement Of The Federal Securities Laws, Anna Currier

American University Business Law Review

No abstract provided.

The E—2 Treaty Investor Visa Dilemma: Violations Of Law And Limitations On Foreign Investment, Tiana J. Cherry

American University Business Law Review

No abstract provided.

Consumer Credit In America: Past, Present, And Future, Pamela Foohey, Jim Hawkins, Creola Johnson, Nathalie Martin

Articles by Maurer Faculty

In September 2016, in conjunction with Law & Contemporary Problems at Duke University School of Law, we organized a symposium on Consumer Credit in America. We sought to assess the state of consumer credit in America — to review and examine its recent history, to consider arguments for and against regulation, and to discuss the potential for future innovation. This is the introduction to the volume of articles coming out of that symposium.

Financial Technology Law - A New Beginning And A New Future, George Walker

The International Lawyer

No abstract provided.

The Costs Of Trumped-Up Immigration Enforcement Measures, Kari Hong

Cardozo Law Review de•novo

Currently, our country spends $18 billion each year on immigration enforcement, which is nearly $4 billion more than the combined budgets of the FBI, DEA, Secret Service, and ATF. President Trump hopes to substantially increase that annual number with his proposed heightened enforcement measures that result in more arrests, more ICE officers roaming our streets, airports, and courtrooms, more detentions, more deportations, and more wall. This essay begins by examining each of these measures that were outlined in the new executive orders and concludes that all are expensive, ineffective, unnecessary, and inhumane.

Mnuchin, When No One Is Watching, David J. Reiss

Cornell Law Faculty Working Papers

UCLA’s legendary basketball coach John Wooden said that the “true test of a man’s character is what he does when no one is watching.” Steven Mnuchin, another leading citizen of Los Angeles, is now in the spotlight as President-Elect Trump’s nominee to lead the Department of the Treasury. Running the Treasury requires financial know-how, which this former Goldman Sachs banker has in spades. But it also requires character, as a large part of the Treasury Secretary’s job is to embody the good faith that the American people want the rest of the world to have in us.

Mutual Fund Capital Structure, A. Joseph Warburton

Marquette Law Review

The Investment Company Act of 1940 regulates the capital structure of mutual funds in order to restrain their leverage and speculative character. It is often (mistakenly) assumed that the law prohibits open-end mutual funds from borrowing money. This Article (I) analyzes the law governing mutual fund capital structure to reveal when (and to what extent) borrowing is allowed and (ii) examines a novel dataset on mutual fund capital structure that shows borrowing is an unexpectedly common practice.

Using data on all registered investment companies in the U.S. from 1998 to 2013, I find that nearly 8% of open-end mutual funds, …

Too Big To Fool: Moral Hazard, Bailouts, And Corporate Responsibility, Steven L. Schwarcz

Faculty Scholarship

Domestic and international regulatory efforts to prevent another financial crisis have been converging on the idea of trying to end the problem of “too big to fail”—that systemically important financial firms take excessive risks because they profit from success and are (or at least, expect to be) bailed out by government money to avoid failure. The legal solutions being advanced to control this morally hazardous behavior tend, however, to be inefficient, ineffective, or even dangerous—such as breaking up firms and limiting their size, which can reduce economies of scale and scope; or restricting central bank authority to bail out failing …

Summary Narrative Of Chief Compliance Officer Liability, Luke Trompeter

American University Business Law Review

No abstract provided.

Well Enough Alone: Liability For Wrongful Foreclosure, Chad J. Pomeroy

Faculty Articles

Part I of this Article both sets the stage for the current environment, in which banks and their officers and directors are under the spotlight and face an increasing amount of pressure due to their perceived role in the instigation of the Great Recession, and then examines in detail improvident lending and wrongful foreclosure, two of the wrongful acts banks have committed in connection with our current financial crisis that have generated a substantial amount of public interest and comment.

Part II examines the potential of officer and director liability for these disparate elements of the Great Recession, looking first …

Financing The Benefit Corporation, Steven A. Dean, Dana Brakman Reiser

Faculty Scholarship

No abstract provided.

The Dark Side Of Self-Regulation, Benjamin P. Edwards

Scholarly Works

The financial services industry indirectly regulates itself through little discussed, scandal-prone, and structurally-entrenched self-regulatory organizations. FINRA, the most prominent of these self-regulatory organizations, makes regulations and sets enforcement policy that directly affect public welfare. As with other self-regulatory organizations, FINRA's structure poses a continual risk that industry members will subvert its processes to act like a cartel, promoting industry interests at the expense of the public and contributing to the excessive rents collected by financial intermediaries. Although this dark side to self-regulation poses a constant danger, structural reforms may increase the likelihood that FINRA and other self-regulatory organizations will take …

Distributed Governance, Carla L. Reyes, Nizan Geslevich Packin, Benjamin P. Edwards

Scholarly Works

Distributed ledger technology disrupts traditional business organizations by introducing new business entities without the directors and officers of traditional corporate entities. Although these emerging entities offer intriguing possibilities, distributed entities may suffer significant collective action problems and expose investors to catastrophic regulatory and governance risks. Our Article examines key considerations for stakeholders and argues that distributed entities must be carefully structured to function effectively.

This Article breaks new ground by critically examining distributed entities. We argue that a distributed model is most appropriate when distributed ledger technology solves a unique corporate governance problem. We caution against ignoring the lessons painstakingly …

Conflicts & Capital Allocation, Benjamin P. Edwards

Scholarly Works

The regulatory structure for financial advice now tolerates incentives motivating financial advisors to manipulate and deceive retail investors. While scholars thus far have argued for ways to improve investor protections, the literature has largely ignored how these flawed incentives affect the economy.

This Article contends that these flawed incentives cause financial advisors to negatively affect capital allocation throughout the overall economy.

This Article draws on literature about manipulation and deception in principal-agent relationships to show how conflicts of interest cause the market for financial advisor services to generate excessive intermediation, driving harms to the real economy. This Article uses case …

The Utility Of Finance, Shlomit Azgad-Tromer, Eric L. Talley

Faculty Scholarship

Public Utilities Commissions (PUCs) are charged with regulating a public utility’s rates at levels that serve the public’s interest while allowing the utility’s investors to earn a rate commensurate with that expected by businesses facing similar risks. Although the process of adjusting rates for risk is a staple of modern finance, we know surprisingly little about how well accomplish their regulatory mandate when judged against the benchmarks of financial economics. This article analyzes a dozen years’ worth of gas and electric rate-setting decisions from PUCs in the United States and Canada, demonstrating empirically that allowed returns on equity (ROE) diverge …