Cryptocurrencies and open blockchain networks have made possible a new way to raise money to develop and maintain novel products and services—whether devices on the Internet of Things, new cloud services on the Internet, or even financial products and investments. This unprecedented form of crowdfunding, colloquially known as "Initial Coin Offerings," raises various legal and policy questions, and developers and investors are eager to have answers to these questions so that they can safely take advantage of this innovative model.
In a case of first impression in the Third Circuit, the court was called on to interpret the statutory definition of "investment adviser" and the precise scope of what "for compensation" means under the Investment Advisers Act of 1940. The issue rose in the appeal of a criminal conviction for selling phoney promissory notes and then squandering the investors' money. At sentencing, the defendant received an upward enhancement under the sentencing guidelines when the lower court found he qualified as an "investment advisor." [Read More]
The Corporations, Securities & Antitrust panel on Thursday was all about constitutional law. With new authority from Dodd-Frank, the SEC has been having certain enforcement actions determined by ALJs, which previously would have had to have been brought in federal courts. Stephen Crimmins described the changed landscape and challenges facing defendants and their counsel. Then the three of us academics covered the jurisdictional and constitutional issues being raised by defendants—specifically, the Appointments Clause, the removal issues, due process, and the Seventh Amendment right to jury trial. The moderator, Scott Kieff, a Commissioner at the International Trade Commission, then described the different dynamics within administrative agencies and the incentives influencing ALJs. The audio of the panel discussion has been posted.
The Countdown to the Convention series previews some of the outstanding panels and events at our upcoming 2015 National Lawyers Convention. Join us November 12-14, 2015 in Washington, DC for three days of debates, discussions, and networking with preeminent legal minds. 13 days to go...
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The Securities and Exchange Commission's growing tendency to resort to enforcement before its administrative law judges rather than Article III judges has given rise to several constitutional challenges to the use of ALJs at the SEC and elsewhere. At least one of these challenges prevailed in Hill v. SEC (N.D.Ga.) See legal press coverage hereand here. Several constitutional issues raised in Hill and in similar other cases will be the topic of a Federalist Society National Lawyers Convention panel organized by the Corporations, Securities and Antitrust practice group. [Read More]
On Monday, October 5, the Supreme Court declined to wade into the issue of what constitutes “insider trading.” The Court’s decision to deny the Solicitor General’s petition for certiorari makes sense—the lower court’s decision is probably correct so far as it goes, there were vehicle problems in the case, and there is not a clear or deep division among the circuits. But eventually, the Supreme Court will need to grapple with the headless monster that the crime of “insider trading” has become. [Read More]