A federal judge in the Southern District of New York recently issued an opinion providing guidance concerning the viability of data breach claims, particularly in the context of a breach of employee information. Sackin v. Transperfect Global, Inc. involves a purported class action filed on behalf of Transperfect employees whose personally identifiable information (PII) was disclosed as a result of a cyber attack. In January 2017, a targeted phishing email was sent to a Transperfect employee designed to look like it had come from the company’s CEO, requesting payroll information regarding Transperfect employees. The Transperfect employee fell for the scheme and sent unencrypted PII to the attacker including names, addresses, Social Security Numbers, and bank account numbers for Transperfect employees. According to the complaint, the disclosure involved thousands of employees. Read more at Cyber News.
By: Gwenn Barney
The United Kingdom government proposed changes to its rules on mergers and acquisitions this week to give itself more oversight over deals that have national security implications.
The proposed rule will allow the government to intervene in a merger or acquisition involving a UK company with at least £1 million ($1.32 million) in revenue in the industries of military or dual use product design and manufacture, computer chip design, and quantum technology. Prior to this proposal, the turnover threshold for such an intervention was £70 million ($92.21 million) or where the effective market share of the combined business reached 25 percent or more.
By: Michael Psathas
Initial coin offerings, or “ICOs”, have exploded in 2017 and in some cases have led to significant financial returns for speculative investors in the nascent industry. Companies from across the world have raised more than $1.6 billion this year according to CB Insights. However, it has been a challenging month for investors and other stakeholders expecting a laissez-faire regulatory environment both in the United States and abroad. (more…)
Chairman Jay Clayton of the U.S. Securities and Exchange Commission (SEC) announced two new initiatives on September 25, 2017. The Commission has created a Cyber Unit that will focus on cyber-related misconduct and a Retail Strategy Task Force to help protect retail investors.
The announcement concerning the Cyber Unit follows a statement made several days earlier by Chairman Clayton in which he noted that the SEC “is focused on identifying and managing cybersecurity risks and ensuring that market participants – including issuers, intermediaries, investors and government authorities – are actively and effectively engaged in this effort and are appropriately informing investors and other market participants of these risks.” (more…)
When negotiating investments in target companies, a private equity firm will almost assuredly attempt to negotiate the best possible deal for itself and its investors. Any professional that has been a part of such negotiations and transactions understands that in addition to the valuation of the target company and the size of the investment, private equity firms can negotiate director seats, board observer rights, dividends, warrant protection, management services agreements, the right to buy additional securities at a fixed price in the future, and redemption rights. A recent opinion by the Delaware Chancery Court, however, may force some private equity firms to give pause before using their clout over company management to “cash-in” on these negotiated terms. (more…)
Provisions designating the law governing contractual disputes are commonplace. However, designation of the governing law does not necessarily establish the jurisdiction within which the dispute must be decided. Parties who do not appreciate this distinction may be surprised that they cannot litigate their dispute in the jurisdiction they selected for the governing law. (more…)
Delaware recently revised its General Corporation Law (DGCL) to provide specific authority for Delaware corporations to use networks of electronic databases, including the nascent “blockchain” database technology, for the creation and maintenance of corporate records. (more…)
Early stage investing has seen a prolific form of capital raising enter the market over the last couple of years, called the “initial coin offering” or “initial token offering” (ICO). ICOs provide issuers with an alternative form of fundraising through the offering of tokens or coins that are virtual currencies or cryptocurrencies. In its simplest form, a company attracts investors looking to get in on the exploding returns in the cryptocurrency market by selling its own digital currency in an offering that looks a lot like crowdfunding. However, cryptocurrency has been headline news lately because of the high level of fraud in the market and the great volatility in value of such currencies.
In private mergers and acquisitions transactions in the United States, it has long been customary to exclude certain kinds of fraudulent conduct from negotiated limits of liability and exclusivity of legal remedies for losses arising out of the transaction, on the theory that the party that is defrauded should not be subject to such negotiated liability limits or be limited in its remedies. Traditionally, “fraud” was simply excluded from the coverage of the liability allocation provisions of the definitive agreement. More recently, however, parties have revisited this so called “fraud carve-out,” including the types of fraud and circumstances in which fraud should be excluded from a liability cap and who should be responsible for such uncapped liability. Without specificity, there is the potential for unintended consequences to the parties of converting claims that ostensibly are covered by the negotiated liability/remedy scheme into uncapped claims and the perceived unfairness of allocating that liability to investors not involved in the operations. The recent case of EMSI Acquisition Inc. v. Contrarian Funds, LLC, et al. is illustrative, particularly for transactions governed by Delaware law.
“Taking Care of Business” is a new blog from White and Williams’ Corporate and Securities Group. With the help of our friends in Cyber Law and Data Protection, Tax, Real Estate and Finance, Bankruptcy, Intellectual Property, Labor & Employment and Commercial Litigation, TCB will focus on emerging issues impacting the business community at every stage of the lifecycle from formation to growth and to exit. Whether it be important updates on day-to-day operational matters such as tax planning, employee benefits, commercial contracts, corporate finance, intellectual property, regulatory and data privacy and cybersecurity, or best practices and recent trends or legal developments of note applicable to transactional matters including acquisitions, strategic alliances, private equity and venture capital financings and debt financings, we’ve got you covered. And of course, we will keep you posted on any recent developments on the litigation and bankruptcy fronts too. In short, TCB will be a “one stop shop” for insights and commentary on everything relevant to owning and operating a business.
To give you a sense of the breadth of topics to be covered, today’s blog highlights five current legal issues that are on the minds of many of our clients. (more…)
- Delaware Supreme Court Rejects the Trial Court’s Statutory Appraisal Analysis in Aruba Networks
- Tax Freedom Day
- Delaware Chancery Court Opens Discussion of Enhanced-Independence Director Deference for Controller Transactions
- JPM Coin and the Future of Commercial (and Maybe Consumer) Transactions
- New Amendment to NJ Law Against Discrimination Renders Common Employment Agreement Provisions Unenforceable