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69(2): 307-392 (February 2014)
A textualist interpretation of the implied private right of action under section 10(b) of the Exchange Act concludes that the right to recover money damages in an aftermarket fraud can be no broader than the express right of recovery under section 18(a) of the Exchange Act. The Act’s original legislative history and recent Supreme Court doctrine are consistent with this conclusion, as is the Act’s subsequent legislative history. Section 18(a), however, requires that plaintiffs affirmatively demonstrate actual “eyeball or eardrum” reliance as a precondition to recovery and does not permit a rebuttable presumption of reliance. Accordingly, if the Exchange Act is to be interpreted as a “harmonious whole,” with the scope of recovery under the implied section 10(b) private right being no greater than the recovery available under the most analogous express remedy, section 18(a), then section 10(b) plaintiffs must either demonstrate actual reliance as a precondition to recovery of damages, or the U.S. Supreme Court should revisit Basic, as suggested by four Justices in Amgen, and overturn Basic’s rebuttable presumption of reliance. A textualist approach thus provides a rationale for either distinguishing or reversing Basic that avoids the complex debate over the validity of the efficient market hypothesis, an academic dispute that the Court is not optimally situated to referee.
69(2): 393-428 (February 2014)
In 2008, this journal published an article noting the difficulty under Delaware law in determining whether defects in stock issuances would render the stock void, and thus incapable of being validated or ratified, or merely voidable, and thus susceptible to cure by ratification. The Delaware legislature has adopted amendments to the General Corporation Law of the State of Delaware, which amendments will become effective on April 1, 2014, that are designed to overrule the existing precedents requiring that defective stock and acts be found void. The amendments expressly provide that defects in stock issuances and other acts render such stock and acts voidable and not void, if ratified or validated in accordance with the new ratification statutes. The amendments provide Delaware corporations with two alternative paths—one involving remedial action taken at the corporation’s initiative, the other involving a court proceeding—to ratify or validate stock and other corporate acts that, due to a defect in authorization, might under prior law have been void and incapable of ratification. In this article, we summarize the reasons why the ratification statutes were necessary, provide an overview of the new Delaware ratification statutes, and discuss examples of circumstances where the ratification statutes could be utilized, specific types of defects that could be validated, which alternative path (self-help or courtassisted) might be appropriate in various circumstances, and the effect of validation.
69(2): 429-474 (February 2014)
This article examines the doctrine of standing as applied to mergers and acquisitions of Delaware corporations with pending derivative claims. Finding the existing framework of overlapping rules and exceptions both structurally and doctrinally unsound, this article proposes a novel reconfiguration under which Delaware courts would follow three black-letter rules: (1) stockholders of the target should have standing to sue target directors to challenge a merger directly on the basis that the board failed to achieve adequate value for derivative claims; (2) a merger should eliminate target stockholders’ derivative standing; and (3) stockholders of the acquiror as of the time a merger is announced should be deemed contemporaneous owners of claims acquired in the merger for purposes of derivative standing. Following these rules would restore order to the Delaware law of standing in the merger context and would advance the important public policies served by stockholder litigation in the Delaware courts.
69(2): 475-476 (February 2014)
This is the summary of the winning entry of in the 2012-2013 Mendes Hershman Student Writing Contest. Deceptive marketing has hurt consumers and business owners since the birth of promotional advertising. As the internet increasingly inspires and dictates our consumption choices, even sophisticated business acumen and technological savvy are not enough to withstand the harmful consequences. Although lawmakers and courts have fashioned remedies applicable to some misleading practices, sly marketers with deep pockets frequently find new ways to trick unsuspecting shoppers and seize market share.
69(2): 477-520 (February 2014)
The Annual Survey Working Group reports annually on judicial decisions that we believe are of the greatest significance to M&A practitioners.
69(2): 521-669 (February 2014)
This is the complete survey that summarizes the significant legal developments Consumer Law and Protection since the Consumer Financial Services Committee’s last survey in 2013.
69(2): 521-526 (February 2014)
The Introduction to the 2013 Annual Survey of Consumer Financial Services Law focused on the many new regulatory initiatives that were set into motion by the CFPB under the numerous mandates requiring such action in the Dodd-Frank Act. The past year saw this process continue, and the coming year promises to see many more new proposed and final rules being promulgated by the CFPB to accomplish the reforms that the Dodd-Frank Act was enacted to achieve
69(2): 527-538 (February 2014)
In January 2013, the CFPB issued final rules under the TILA and its implementing Regulation Z, and the RESPA and its implementing Regulation X, to implement the requirements of the Dodd-Frank Act that are intended to provide borrowers with easier access to, and more timely response from, mortgage loan servicers and to add greater transparency to their servicing and loss mitigation processes.
69(2): 539-550 (February 2014)
On January 10, 2013, the Bureau of Consumer Financial Protection (“CFPB”) released its Ability-to-Repay and Qualified Mortgage Rule, which became effective on January 10, 2014.6 This survey will discuss Congress’s statutory enactments permitting the rule and the rule itself.
69(2): 551-562 (February 2014)
When the CFPB published its loan originator compensation rule in 2013, it added another chapter to the long-running history of this rule.
69(2): 563-572 (February 2014)
This year's Survey covers the updated rules from the CFPB regarding real estate transactions.
69(2): 573-584 (February 2014)
This year, the CFPB and the FTC issued heavily publicized reports detailing consumer reporting practices and the accuracy of information in consumer reports, obtained record civil penalties in key enforcement actions under the Fair Credit Reporting Act, and issued several warning letters and guidance bulletins, with a special focus on nationwide specialty consumer reporting agencies and companies that furnish information to consumer reporting agencies. This survey summarizes these regulatory developments.
69(2): 585-592 (February 2014)
This survey summarizes recent developments affecting deposits and payment systems, including overdraft developments, amendments to rules governing remittance transfers, legislation and new rules concerning ATM disclosures, litigation concerning the debit card interchange and network exclusivity rules, and a proposal to revise telemarketing regulations to restrict the use of remotely created checks and other payment methods frequently used in fraudulent transactions.
69(2): 593-598 (February 2014)
The Credit Card Accountability Responsibility and Disclosure Act of 2009 (“CARD Act”)1 included provisions designed to protect younger consumers. This survey examines recent amendments by the CFPB to Regulation Z’s ability-to-pay requirements, which implemented the CARD Act’s protections for younger consumers.
69(2): 599-608 (February 2014)
This year’s Annual Survey will focus on the most significant changes in the auto finance regulatory environment and review the impact of those changes on the life cycle of auto finance products from origination through servicing and collection.
69(2): 609-622 (February 2014)
The past year saw a curious dichotomy continue as private fair lending litigation based on a disparate impact theory has all but disappeared in the aftermath of the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, while the same theory has formed the basis of continuing enforcement actions by the Civil Rights Division of the DOJ and the HUD.
69(2): 623-632 (February 2014)
Plaintiffs continue to raise substantive issues under the FDCPA, but many of these cases were decided during the past year on procedural issues at the pretrial stage. Additionally, several cases reviewed this year exacerbate or create splits in the circuits on substantive issues. This trend underscores the need for additional guidance for practitioners and the importance of paying attention to the evolving complexities of the FDCPA.
69(2): 633-646 (February 2014)
In recent years, the Telephone Consumer Protection Act of 1991 (“TCPA”) has been transformed through consumer litigation from a statute aimed at restricting the practices of telemarketers and the senders of junk faxes to one that regulates communications between creditors and debt collectors and their customers.
69(2): 647-656 (February 2014)
The enforceability of arbitration agreements with class action waivers and whether such agreements are preempted by the Federal Arbitration Act (“FAA”) continue to be important issues.
69(2): 657-669 (February 2014)
During the last few years, what was formerly an obscure and little-known database registry has become a lightning rod for consumer anger over the unprecedented number of foreclosures resulting from the financial crisis of 2008, and for county recorders’ newfound indignation over a perceived usurpation of their recording duties and the attendant fees. As a result, litigation has arisen across the country challenging the registry system of Mortgage Electronic Registration Systems, Inc. (“MERS”) and its designation as mortgagee or beneficiary in security instruments, its compliance with state recording laws, and its involvement in the foreclosure process.