Mayer Brown (United States)

PurposeTo introduce blockchain in simple terms for business lawyers to be able to spot the right issues and ask the right questions.Design/methodology/approachThis article provides an overview of blockchain, identifies two example use cases, and highlights some of the most pressing legal issues, including issues to address in on-chain programming, off-chain agreements and other issues when determining whether to implement a blockchain solution.FindingsThis article concludes that there has been a significant growth in investment and interest in blockchain. Numerous companies across different sectors have developed blockchain proof-of-concepts, with some heading towards production deployments. At this point, commercial blockchain is largely in the pilot or proof-of-concept stage across a wide range of use cases, with payments and supply chain being two of the most promising use cases. This article also identifies possible legal issues associated with blockchain.Practical implicationsDespite the growing interest in blockchain, it is still a novel topic to many business lawyers. It is very important that lawyers are able to identify the right issues and ask the right questions.Originality/valuePractical guidance from experienced lawyers in the Technology Transactions and Financial Services Regulatory & Enforcement practices.

PurposeThe purpose of this paper is to explain the SEC's new dollar threshold tests under the qualified client standard.Design/methodology/approachThe paper explains the amendments to the dollar thresholds, which provide for inflation adjustments to the assets under management and net worth tests every five years; the exclusion of net equity in the primary residence from the net worth calculation; and certain transitional provisions designed to allow investment advisers and their clients to maintain performance fee arrangements that existed when they entered into advisory contracts.FindingsThe paper finds that these increased dollar thresholds codify the increased thresholds that the Commission issued in its July 12, 2011 order as required by the Dodd‐Frank Act.Originality/valueThe paper provides practical guidance from an experienced financial services lawyer.

For decades, the federal government has played a significant role in promoting healthy eating. In the early 1900s, the United States Department of Agriculture (USDA) promoted a foundational diet of milk, proteins, fruits and vegetables, and grains. Most Americans are at least somewhat familiar, although perhaps confused, with the more nuanced healthy eating recommendations contained in the food pyramid - first employed in 1992. And virtually every American has experienced the federally supported school lunch program. In the first half of 2011, these two iconic programs underwent significant change as part of a stepped-up effort to improve the health of the country through better food choices. Part I of this article describes the "MyPlate" initiative that replaces the iconic USDA food pyramid and menu revisions to the national school lunch and school breakfast programs. This section also profiles administrative decisions in two school districts to ban, on health grounds, brown- bag lunches in favor of school- provided lunches. Finally, this section describes some of the challenges of implementing a rule for chain restaurant menu labeling under the Patient Protection and Affordable Care Act.

PurposeThe purpose of this paper is to describe interpretive and compliance issues arising under the Labor Department's interim final regulations under the statutory exemption for the provision of services provided by Section 408(b)(2) of ERISA, which will become effective on January 1, 2012.Design/methodology/approachThe paper analyzes the published interim final regulations and considers significant comments filed in response to the proposed regulations.FindingsEffective January 1, 2012, covered service providers who rely on the statutory exemption for the provision of services provided by Section 408(b)(2) must begin complying with the interim final amendments to the regulations under Section 408(b)(2) (the “Regulation”). Among other changes, the Regulation will require service providers to provide additional disclosures of direct and indirect compensation and to identify whether they expect that they will be providing services as a fiduciary or as a registered investment adviser. The primary purpose of the Regulation is to assist plan sponsors in evaluating service provider relationships, including total compensation that will be received by the service provider and conflicts of interests to which the service provider may be subject. The Regulation will apply to both new and existing service provider arrangements on January 1, 2012. Failure to comply with the Regulation may result in the assessment of excise taxes under Section 4975 of the Internal Revenue Code unless other exemptive relief is available. Service provider arrangements may be eligible for exemptive relief under certain other statutory and administrative exemptions.Originality/valueThe paper describes possible compliance issues that may arise under the Regulation and identifies and evaluates interpretive and compliance issues that have been noted since the proposed amendments were published.

PurposeThe purpose of this paper is to examine the impact the US Supreme Court's Tellabs decision has had on Section 10 (b) cases generally and on cases related to subprime mortgage‐backed securities.Design/methodology/approachThe paper provides background including provisions of Section 10(b) of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act (PSLRA) of 1995. Analyzes the decision in Tellabs, Inc. v. Makor Issue & Rights, Ltd, recent decisions since Tellabs by the the Second, Seventh, and Ninth Circuits, and decisions in two recent subprime securities cases in which defendants moved to dismiss pursuant to Tellabs; and draws preliminary conclusions from cases that have applied Tellabs so far.FindingsThe PSLRA raised the bar for pleading scienter by requiring a “strong inference”, but the courts of appeals have differed in applying the standard. The Tellabs decision asserted that the PSLRA requires consideration of competing inferences in determination of whether scienter is adequately pleaded. The Supreme Court's “prescription” said the inference of scienter must be more than merely “reasonable” or “permissible”; it must seem to a reasonable person to be at least as cogent and compelling as any opposing inference. One lesson of Tellabs and the Seventh Circuit's decision on remand is that the “plausibility” of scienter allegations requires a fact‐specific inquiry. The Ninth Circuit court found that “deliberate recklessness” is sufficient to allege scienter. In one of the subprime cases, In re 2007 Novastar Financial, Inc., a district court found that a deterioration of a company's business was not evidence of wrongdoing. It is difficult – and premature – to draw firm conclusions from cases that have applied Tellabs so far, but requiring courts to consider competing inferences, requiring the pleadings in question to satisfy more “adjectives”, and requiring the “weighing” of inferences at the pleadings stage would all appear to help defendants. However, Tellabs could help plaintiffs by reversing previous practice in which a “tie” between competing inferences automatically resulted in a victory for the defendant.Originality/valueThe paper offers practical guidance by experienced securities lawyers.

On June 29, 2005, the U.S. Securities and Exchange Commission (SEC) adopted a sweeping set of rules under the Securities Act of 1933 designed to modernize the process for registering and offering securities, including asset-backed securities (ABS) and mortgage-backed securities (MBS). These rules, known collectively as "Securities Offering Reform," took effect on December 1, 2005, and will have a profound effect on the manner in which ABS and MBS are offered and sold to investors. This article summarizes the five basic rules for securities offerings under the Securities Act and discusses how those rules are affected by Securities Offering Reform. The article also describes how ABS and MBS securitization transactions will be affected by Securities Offering Reform. <bold>TOPICS:</bold> <ext-link>Exchanges/markets/clearinghouses</ext-link>, <ext-link>real assets/alternative investments/private equity</ext-link>, <ext-link>MBS and residential mortgage loans</ext-link>

Before you learn to play a new game, you probably ask some questions. What are the rules? What is the objective of the game? How do you win? What are the best strategies? How do you avoid being thrown out of the game?

A structured financing that was closed in late 2003 for the new St. Louis Cardinals Stadium was the largest private placement of debt for a Major League Baseball (MLB) stadium, the first MLB stadium transaction using a bankruptcy-remote structure, the first set of cash flows from a baseball stadium to be rated investment grade by both Moody?s and Standard and Poor9s and insured to ‘AAA’ by Ambac Assurance, and only the third privately financed MLB home stadium. A special-purpose vehicle formed by the Cardinals will originate the contracts giving rise to the contractually obligated income (COI) pledged to support the ballpark financing. The SPV holds the naming rights, rights to conduct concession activities, rights to license luxury suites, and certain sponsorship (signage) rights, all collectively called dedicated property. The Cardinals conduct MLB games under a license agreement with the SPV. The dedicated property is isolated from the credit risk of the Cardinals because it is not owned by the Cardinals. COI from the dedicated property pledged to bondholders was sufficient to earn the bonds an investment-grade credit rating.