Private Equity Beware: Securities Exchange Commission (SEC) Official Predicts Increased Scrutiny, Enforcement Action in 2013

The National Law Review recently published an article, Private Equity Beware: Securities Exchange Commission (SEC) Official Predicts Increased Scrutiny, Enforcement Action in 2013, written by Mark T. Carberry with Neal, Gerber & Eisenberg LLP:

Neal Gerber

In late January, the SEC published remarks from a high-ranking SEC official that included projections that the private equity industry would see more scrutiny and enforcement in 2013. “It’s not unreasonable to think that the number of [enforcement] cases involving private equity will increase,” said Bruce Karpati, Chief of the SEC Enforcement Division’s Asset Management Unit.* In his comments, Karpati rooted his prediction in private equity’s “significant growth spurt” preceding the financial crisis, the substantial increase in assets under management, and the fact that only recently have many private equity managers become registered investment advisers.

VALUATION & CONFLICTS OF INTEREST IN CROSSHAIRS

The misconduct that the SEC is most likely to target falls under two broad categories: valuation and conflicts of interest, according to Karpati.

As to valuation, Karpati described one form of manager misconduct that occurs when assets are “written up” during a fund raising period, only to be immediately written down after the fund raising period closes.

Karpati further identified the following common conflicts of interest that require control and disclosure:

  • Conflicts between the profitability of the private equity management firm and the best interests of investors, particularly where the firm is publicly traded;
  • Conflicts that arise when expenses are shifted from the management firm to the funds;
  • Conflicts that arise in charging additional fees to the portfolio companies where allowable fees are poorly defined in the partnership agreement;
  • Conflicts relating to the challenges of managing different clients, different investors and different products “under the same umbrella …,” with the potential that “preferred clients” will be favored at the expense of others;
  • Conflicts generated by a manager’s other business interests, including the possibility of diverting investment opportunities.

COOS/CFOS ‘CRITICAL’ IN MEETING FIDUCIARY DUTIES

Karpati deemed the roles of chief operating officer and chief financial officer “critical” in ensuring a firm satisfies its fiduciary duties to clients. This is true due to the unique, broad perspective they enjoy in running the business of the manager.

Karpati specified a number of “best practices” that private equity firms should consider:

  • Compliance risk explicitly should be integrated in overall, enterprise risk management;
  • COOs, CFOs and compliance personnel should proactively identify and resolve practices giving rise to conflicts of interest;
  • Firms should implement a set of compliance procedures appropriate for the particular business model in place;
  • COOs and CFOs should act as investor advocates, and be sufficiently empowered in the firm by, for example, securing membership on important, decision-making firm committees.

Karpati concluded his remarks by encouraging collaboration with legal and compliance resources whenever potential conflict of interest issues are identified.

Note:  The Asset Management Unit is one of five specialized units within the SEC’s Division of Enforcement, each designed to address specific areas of the financial markets. The other units are the Market Abuse Unit, the Structured and New Products Unit, the Foreign Corrupt Practices Act Unit, and the Municipal Securities and Public Pension Unit.

© 2013 Neal, Gerber & Eisenberg LLP

Rainmaker Retreat: Law Firm Marketing Boot Camp

The National Law Review is pleased to bring you information about the upcoming Law Firm Marketing Boot Camp:

rainmaker ad January 2013

WHY SHOULD YOU ATTEND?

Have you ever gone to a seminar that left you feeling motivated, but you walked out with little more than a good feeling? Or taken a workshop that was great on style, but short on substance?

Ever been to an event that was nothing more than a “pitch fest” that left a bad taste in your mouth? We know exactly how you feel. We have all been to those kinds of events and we hate all those things too. Let me tell you right up front this is not a “pitch fest” where speaker after speaker gets up only trying to sell you something.

We have designed this 2 day intensive workshop to be content rich, loaded with practical content.

We are so confident you will love the Rainmaker Retreat that we offer a 100% unconditional money-back guarantee! At the end of the first day of the Rainmaker Retreat if you don’t believe you have already received your money’s worth, simply tell one of the staff, return your 70-page workbook and the CD set you received and we will issue you a 100% refund.

We understand making the decision to attend an intensive 2-day workshop is a tough decision. Not only do you have to take a day off work (all Rainmaker Retreats are offered only on a Friday-Saturday), but in many cases you have to travel to the event. As a business owner you want to be sure this is a worthwhile investment of your time and money.

WHO SHOULD ATTEND?

Partners at Small Law Firms (less than 25 attorneys) Solo Practitioners and Of Counsel attorneys who are committed to growing their firm. Benefits you will receive:

Solo practitioners who need to find more clients fast on a shoe-string budget. In addition to all the above benefits, solo attorneys will receive these massive benefits:

Law Firm Business Managers and Internal Legal Marketing Staff who are either responsible for marketing the law firm or manage the team who handles the law firm’s marketing. In addition to all the above benefits, Law Firm Business Managers and Internal Legal Marketing Staff will also receive these benefits:

Of Counsel Attorneys who are paid on an “eat what you kill” basis. In addition to all the above benefits, Of Counsel attorneys will also receive these benefits:

Associates who are either looking to grow their book of new clients in the next 6-12 months or want to launch their own private practice. In addition to all the above benefits, Associates will also receive these benefits:

New Children’s Product Testing and Certification Rule Set to Impact Manufacturers and Importers on February 8

The National Law Review recently published an article written by Charles A. Samuels and Matthew Cohen with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding Children’s Product Testing:

MintzLogo2010_Black

 

On February 8, 2013, manufacturers and importers of children’s products (a consumer product designed or intended primarily for children 12 years of age or younger) will be required to follow certain testing and certification protocols established by the U.S. Consumer Product Safety Commission (“CPSC”).1 The new rule provides guidance on how to ensure a product meets all applicable safety standards over continued production. Understanding the new testing and certification rule is critical for all manufacturers and importers of children’s products. The deadline to be in compliance with the rule comes at a time when the safety of children’s products continues to receive heightened scrutiny by the federal government.

Brief Background

The Consumer Product Safety Act2 (as amended by the Consumer Product Safety Improvement Act of 2008) requires that nearly all children’s products undergo third party testing. The law also mandates that manufacturers, importers and private labelers certify that their children’s products meet all applicable CPSC rules. Therefore, third party testing serves as the basis for a company to certify, via a “Children’s Product Certificate,” that its children’s products meet all such requirements.

In 2011, the CPSC enacted a final rule establishing protocols with respect to initial and continued testing and certification for children’s products. This rule has been called by some the “reasonable testing rule” because it establishes standards for testing and certification programs. Importantly, on February 8, 2013, this rule will become effective and apply to all children’s products manufactured after that date. By this time, children’s product manufacturers and importers must have a documented testing and certification program, and all products must be made per the terms of this program.

Third Party Testing and Certification

There are three types of third party testing discussed in the new rule: (1) initial testing; (2) material change testing; and (3) periodic testing. It is critical to have an understanding of each phase of testing and certification, and how they affect manufacturing and testing processes.

  • Initial Testing: Manufacturers of children’s products must submit “a sufficient number of samples” to an accredited CPSC third party laboratory to ensure compliance with all applicable product safety rules. The manufacturer or importer must issue a Children’s Product Certificate to their retailers and distributors (or to the government upon request) based on these third party laboratory test results.
  • Material Change Testing: If a material change is made to a children’s product (or to a component part of that product) after initial testing and certification, then the product or component part needs to be retested by a third party laboratory and a new certificate needs to be issued.
  • Periodic Testing: Finally, manufacturers must now document a “periodic testing plan” to any continuing production of a children’s product. If a children’s product initially is tested and certified, and then additional production continues, effective February 8, 2013, periodic testing is required for all the applicable children’s product safety rules, even if there are no material changes to the product. The periodic testing plan must provide the manufacturer with a “high degree of assurance” that its children’s products manufactured after the issuance of a Children’s Product Certificate comply with the CPSC rules. Typically, periodic testing must be conducted at least once per year, although the time interval may vary depending on the product and other factors such as high variability in testing results, consumer complaints, or the manufacturing process itself.

A Written Testing and Certification Plan

As of February 8, 2013, manufacturers must also develop a written plan for periodic testing of their children’s products, which must include the tests to be conducted, the intervals at which the tests will be conducted, and the number of samples to be tested. The rule also requires that companies include in their plan a protocol to address a material change in product design or manufacturing process, procedures to safeguard against the exercise of undue influence on a third party laboratory, policies regarding employee training, and a recordkeeping plan, among others.

How Can You Ensure that You are Complying with the New Rule?

Firms may need to seek experienced counsel to:

  • Assess your current product testing and certification practices and policies and how to bring them into compliance with all CPSC requirements.
  • Advise your company on the many other CPSC regulations, guidance documents and enforcement policies, including those dealing with the lead paint and substrate limits; limits on phthalates in certain children’s products; whistleblower protection for employees of product makers and sellers; new restrictions on the exportation of potentially violative products; a new CPSC public database of consumer complaints; and the transformation of voluntary into mandatory standards by the CPSC.
  • Advocate for your company or industry group before the CPSC to ensure that your interests and rights under the law are fully protected.

Mintz Levin has assembled a team that is devoted to CPSC-administered laws and regulations. We stand ready to advise and assist clients to anticipate and respond to compliance issues arising under federal, state, and international product safety laws. Practice leader Chuck Samuels has represented clients in the product safety arena for almost 30 years. We are presently advising trade associations, manufacturers, retailers, and importers on how to not only prevent problems from arising, but capitalize on new opportunities.

1 This rule entitled “Testing and Labeling Pertaining to Product Certification” is codified at 16 C.F.R. § 1107.

2 15 U.S.C. §§ 2051- 2089.

©1994-2013 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

ABA Gaming Law Minefield Conference – February 14-15, 2013

The National Law Review is pleased to bring you information about the upcoming ABA Gaming Law Minefield Conference:

ABA Gaming Law Feb 14-15, 2013

When

February 14 – 15, 2013

Where

  • Green Valley Ranch Resort & Spa
  • 2300 Paseo Verde Pkwy
  • Las Vegas, NV 89101
  • United States of America
 
The program will discuss revolutionary legal, regulator, and ethical issues confronting both commercial and Native American gaming.  Attendees will learn about global anti-corruption initiatives, Internet gaming, and the challenges faced by commercial and Native American gaming.

Recent Consumer Financial Protection Bureau “CFPB” Mortgage Rules to Absorb and Implement

Barnes & Thornburg LLP‘s Financial Institutions Practice Group recently had an article, Recent Consumer Financial Protection Bureau “CFPB” Mortgage Rules to Absorb and Implement, featured in The National Law Review:

Barnes & Thornburg

 

January 2013 was a very busy month for the Consumer Financial Protection Bureau in promulgating rules relating to consumer mortgage lending. The CFPB promulgated seven rules pertaining to consumer mortgage lending during January 2013:

  • Ability to Repay (ATR) and Qualified Mortgage (QM) Standards under TILA/Regulation Z
  • Escrow Requirements for Higher-Priced Mortgages Under TILA/Regulation Z
  • High-Cost Mortgage and Homeownership Counseling Amendments to TILA/Regulation Z and Homeownership Counseling Amendments to RESPA/Regulation X
  • RESPA/Regulation X and TILA/Regulation Z Mortgage Servicing
  • Appraisals for Higher-Priced Mortgage Loans (issued jointly with other agencies)
  • Disclosure and Delivery Requirements for Copies of Appraisals and Other Written Valuations Under ECOA/Regulation B
  • Loan Originator Compensation Requirements Under TILA/Regulation Z

    With so many new CFPB rules, there is much to be learned and absorbed by loan originators, mortgage brokers, mortgage lenders, and mortgage servicers between now and the dates on which such rules will go into effect. With the exception of the High-Cost Mortgage and Homeownership Counseling Amendments to TILA/Regulation Z, the Homeownership Counseling Amendments to RESPA/Regulation X and the Escrow Requirements for Higher-Priced Mortgages rule, which will go into effect on June 1, 2013, and certain limited provisions contained in the Loan Originator Compensation rule, which will also go into effect on June 1, 2013, all of these rules have effective dates in January 2014, one year after their respective promulgation dates.

    Although each of these rules is important and poses certain compliance challenges, we will summarize in this Alert two of the most significant rules (largely due to their very widespread applicability and their overall complexity).  These are (1) the ATR and QM Standards rule; and (2) the Loan Originator Compensation rule.

    ATR and QM Standards

    The ATR and QM Standards rule, together with accompanying preamble, explanations and commentary, is over 800 pages long. The rule, among other things, implements a Dodd-Frank Act amendment to TILA requiring a consumer mortgage creditor, before originating a mortgage loan, to consider the borrower’s ability to repay.  The new rule allows a creditor to satisfy this requirement by: (1) satisfying the general ATR standards, which would require the creditor to consider eight different and discrete factors relating to the borrower’s ability to repay (generally using reasonably reliable third-party records to verify the information considered); (2) refinancing a “non-standard mortgage” into a “standard mortgage”; (3) originating a “rural balloon-payment QM” if, but only if, the creditor qualifies under a rigorous standard under which few creditors would qualify (creditors must have less than $2 billion in assets, must originate no more than 500 first-lien mortgages, and must originate at least 50 percent of the first-lien mortgages in counties that are rural or underserved); or (4) originating a QM.

    The advantage of meeting the QM standards is that, in general, the creditor will obtain an irrebuttable presumption of the borrower’s ability to repay the mortgage, which would block most lawsuits.  However, if the mortgage is a “higher-priced mortgage,” the creditor obtains only a rebuttable presumption of the borrower’s ability to repay the mortgage, which makes such loans more easily challenged in court.  A “higher-priced mortgage” is one which is priced 1.5 percentage points higher than a comparable loan in Freddie Mac’s Primary Mortgage Market Survey. This distinction will likely make “higher-priced mortgages,” or so-called subprime loans, less available.  In this regard, some pundits have predicted that, in the future, only mortgages meeting the QM standards and that are not “higher-priced mortgages” or “high-cost mortgages” will be generally available.

    To qualify as a QM the mortgage loan must satisfy the following standards:

    • provide for regular periodic payments that are substantially equal (except for ARMs and step-rate loans) that do not result in negative amortization or allow the borrower to defer repayment of principal, or result in a balloon payment (except for balloon-payment QMs);
    • have a term no greater than 30 years;
    • have total points and fees that do not exceed the permitted percentage of the loan amount (which is generally three percent (3%), subject to a few exceptions and refinements);
    • be underwritten taking into account the monthly payment and any mortgage related obligations, using the maximum interest rate that may apply during the first five years and periodic payments that will repay either (i) the outstanding principal and interest over the remaining term of the loan after the interest rate adjusts to the five-year maximum or (ii) the loan amount over the loan term;
    • for which the creditor considers and verifies the income or assets, and current debt, alimony, and child support obligations; and
    • for which the consumer’s debt-to-income ratio does not exceed forty-three percent (43%) when the loan is consummated.

    Notwithstanding these stringent QM standards, on a temporary basis, and for a period not to exceed a maximum of seven years, the CFPB created a second category of QMs that meet some, but not all, of the general QM standards. Simply stated, to qualify under this second category, the loan must meet the general product feature prerequisites for a QM and also satisfy the underwriting standards for purchase, guaranty, or insurance (as applicable) of either (i) the GSEs, as long as they operate under Federal conservatorship or receivership, or (ii) HUD, the VA, the USDA, or the Rural Housing Service.

    This rule also implements a provision of the Dodd-Frank Act that prohibits prepayment penalties, except for certain fixed-rate QMs where the penalty meets certain restrictions and the creditor offered the consumer an alternative mortgage loan without the penalty.

    Loan Originator Compensation

    In connection with the CFPB’s new Loan Originator Compensation rule, the CFPB published over 500 pages of background and prefatory material, explanations, and commentary. In this rule, the CFPB both expands and clarifies existing provisions in Regulation Z regulating loan originator compensation.  Many, if not most, of the provisions in the final rule have substantially identical counterparts in current Regulation Z § 1026.36(d) and the related Official Staff Commentary.

    However, the final rule has expanded treatment regarding the prohibited use of “proxies” for a term of a transaction in awarding loan originator compensation.  In this regard, the final rule clarifies the definition of a proxy as a factor that consistently varies with a transaction over a significant number of transactions, and the loan originator has the ability, directly or indirectly, to add, drop, or change the factor in originating the transactions.

    While retaining current Regulation Z’s general prohibition against subsequent downward adjustments to a loan originator’s compensation based upon changes in the transaction terms (e.g., to match or better the terms of a competitor), the final rule, unlike current Regulation Z, allows loan originators to reduce their compensation to defray certain unexpected increases in estimated settlement costs.

    Although the final rule generally prohibits loan originator compensation based upon the profitability of a transaction or a pool of transactions, it makes certain limited exceptions to this general rule with respect to various kinds of tax-advantaged retirement plans and other profit-sharing plans.  In this regard, mortgage-related business profits can be used to make contributions to certain tax-advantaged retirement plans and to provide bonuses and contributions to other plans that do not exceed 10 percent of the individual loan originator’s total compensation (but employers can elect whether or not to include contributions to tax-advantaged retirement plans in the “total compensation” calculations).

    Regulation Z currently provides that, where a loan originator receives compensation directly from a consumer in connection with a covered mortgage loan, no loan originator may receive compensation from another person in connection with the same transaction.  The Official Staff Commentary to current Regulation Z indicates, however, that this prohibition does not prohibit the employer of a loan originator from paying such loan originator a salary or an hourly wage in that instance.  As a pleasant surprise, the final rule permits mortgage brokers to pay their employees or independent contractors a commission on the particular mortgage loan, so long as the commission is not based upon the terms of such mortgage loan.

    The CFPB has elected not to issue a rule implementing a provision of the Dodd-Frank Act prohibiting consumers from paying upfront points or fees on a transaction if the loan originator’s compensation is paid by a person other than the consumer (either to the creditor’s own employee or to a mortgage broker).  Instead, the CFPB elected to grant a temporary exemption from this prohibition while it explores the potential effects of such a prohibition.

    The final rule also contains some provisions unrelated to loan originator compensation.  Specifically, in furtherance of other provisions in the Dodd-Frank Act, the final rule (1) prohibits mandatory arbitration clauses in connection with both residential mortgage loans and HELOCS; (2) prohibits the application or interpretation of provisions in residential mortgage loans and HELOCS and related agreements that would have the effect of barring claims in a court in connection with an alleged violation of Federal law; and (3) prohibits the financing of any premiums or fees for credit insurance (such as credit life insurance) in connection with a consumer credit transaction secured by a dwelling (but allows for credit insurance to be paid on a monthly basis).  These are the only provisions of the final rule which have a June 1, 2013, effective date.

    Other provisions in the final rule address (1) the additional obligations imposed on depository institutions in ensuring that their loan originator employees meet character, fitness, and criminal background standards similar to existing SAFE Act licensing standards and are properly trained; and (2) expanded recordkeeping requirements pertaining to loan originator compensation applicable to both creditors and mortgage brokers.

    Recess Appointment of Richard Cordray

    The Jan. 25, 2013 decision of the D.C. Circuit Court of Appeals invalidating recess appointments to the National Labor Relations Board, calls into question the recess appointment of Richard Cordray as head of the CFPB.  What impact this potentially invalid appointment will have on the CFPB regulations promulgated in January 2013 is undetermined at this time.

© 2013 BARNES & THORNBURG LLP

9th Annual Clean Tech Investor Summit – February 6-7, 2013

The National Law Review is pleased to bring you information about the upcoming 9th Annual Clean Tech Investor Summit:

The Clean-Tech Investor Summit chaired by Technology Partners’ Ira Ehrenpreis and produced by International Business Forum, is the premier clean-tech investment and innovation summit of the year. Held each winter in Palm Springs, CA, at the Renaissance Esmeralda Resort & Spa, the event brings together leading investors, Fortune 500 executives, entrepreneurs, and service providers for two days of high-level presentations, conversations, and networking. Hosting a national audience at this destination location has fostered the optimal networking experience.  General registration is $1,995, but National Law Review readers can use discount code CTNLR and pay only $1,495!

DOL, IRS, and HHS Put the Brakes on Stand-Alone Health Reimbursement Arrangements Used to Access Health Insurance Coverage in the Individual Market

The National Law Review recently featured an article regarding Health Reimbursement Arrangements written by Alden J. Bianchi and Gary E. Bacher of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.:

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In a set of Frequently Asked Questions1 (FAQs) posted to the Department of Labor’s website on January 24, the Departments of Health and Human Services, Labor, and Treasury (the “Departments”) put a stop to an approach to health plan design under which employers furnish employees with a pre-determined dollar amount (a “defined contribution”) that employees can apply toward the purchase of health insurance coverage in the individual health insurance market.

An arrangement under which an employer provides an amount of money to employees to pay for unreimbursed medical expenses or for individual market premiums is itself a “group health plan.” Such an arrangement is referred to and regulated under the Internal Revenue Code as a “health reimbursement arrangement” or “HRA.”2 The HRA approach described above is referred to as a “stand-alone HRA” to distinguish it from arrangements in which the HRA is paired with an employer’s group health plan. This latter HRA design is referred to as an “integrated HRA.”

The rules governing HRAs stand in contrast to cafeteria plans and medical flexible spending arrangements, which pave the way for employee contributions to be paid with pre-tax dollars. Where employee contributions are limited to premiums, the cafeteria plan is referred to colloquially as a “premium-only” plan. Where employees can set aside their own money to pay for certain medical expenses including co-pays and co-insurance with pre-tax dollars, the arrangement is referred to as a “medical flexible spending arrangement” or “medical FSA.” Medical FSAs can include employer money (typically in the form of “flex credits”), but they cannot be used to pay health insurance premiums.

While some vendors have begun to market stand-alone HRAs, it was never clear that HRAs used to access individual market coverage could pass muster under the Patient Protection and Affordable Care Act (the “Act”) or other applicable laws. The regulatory hurdles, both before and after 2014, include the following:

  1. Before 2014, carriers issuing coverage in the individual market are free to impose all manner of underwriting conditions, which raise the specter of discrimination based on health status in violation of Title I of the Health Insurance Portability and Accountability Act (HIPAA). These concerns disappear commencing in 2014 as a consequence of the Act’s comprehensive overhaul of health insurance underwriting practices.
  2. The Act generally prohibits group health plans and health insurance carriers from imposing lifetime or annual limits on the dollar value of essential health benefits. In prior guidance, the regulators gave a “pass” to integrated HRAs, but not to stand-alone HRAs.
  3. Because individual market products are age rated, the same coverage will cost more in the hands of an older employee than in the hands of a similarly-situated younger employee. Before 2014, the variations in premium costs are a matter of state law; from and after 2014, the Act establishes a federal floor under “modified community rating” rules that permit a disparity of no more than 3:1. Under either regulatory regime, a flat dollar amount is thought to raise questions under the Age Discrimination in Employment Act (ADEA). Under the ADEA, variations in premiums are permitted only where the added cost charged to an older employee is justified by the actuarially-adjusted cost of providing the benefits to the older employee.

The FAQs cite the Act’s ban on lifetime and annual limits as the basis for their objection to stand-alone HRAs used to access individual market coverage. Specifically, the FAQs note that—

“[A]n HRA is not considered integrated with primary health coverage offered by the employer unless, under the terms of the HRA, the HRA is available only to employees who are covered by primary group health plan coverage provided by the employer. …”

The Departments state their objections unequivocally: an HRA used to purchase coverage in the individual market cannot be considered integrated with that individual market coverage. Therefore, such an arrangement does not satisfy the requirements Act prohibiting group health plans and health insurance carriers from imposing lifetime or annual limits on essential health benefits. The Departments also made clear that an employer-sponsored HRA may be treated as integrated with other coverage only if the employee receiving the HRA is actually enrolled in that coverage. Thus, if an HRA credits additional amounts to an individual only when he or she does not enroll in the employer’s group health plan, the HRA will not comply with the Act.

Recognizing the potential hardship to existing stand-alone HRAs, the FAQs include a special rule for amounts credited or made available under HRAs in effect prior to January 1, 2014. Whether or not an HRA is integrated with other group health plan coverage, unused amounts credited before January 1, 2014 may be used after December 31, 2013 to reimburse medical expenses without running afoul of the Act. If the HRA did not prescribe a set amount or amounts to be credited during 2013, then the amounts credited cannot exceed the amount credited for 2012.

©1994-2013 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

White Collar Crime Institute – March 6-8, 2013

The National Law Review is pleased to bring you information about the upcoming White Collar Crime Institute:

White Collar Crime March 6-8 2013

The program will provide an in-depth analysis of three recent high visibility trials by the lawyers involved in the cases.  The many topics covered will include: ethical pitfalls and blunders in white collar practice, conducting global investigations (including issues of competing laws), data privacy and blocking statutes, trial tactics in white collar cases, Brady obligations, international issues in white collar practice (including obtaining evidence abroad), handling of, and dealing with, issues related to electronically stored materials, sentencing guidelines and arguing for a departure, updates and trends in securities and FCPA enforcement, and more!

2013 ADA Pool Lift Compliance Deadline: Has Your Business Complied?

The National Law Review recently published an article by Tara L. Tedrow with Lowndes, Drosdick, Doster, Kantor & Reed, P.A. regarding, Pool Lifts:

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January 31, 2013 marks the date for compliance with the Americans with Disabilities Act (“ADA”) Standards for Accessible Design related to installing fixed pool lifts for swimming pools, wading pools and spas.  Though the Department of Justice (“DOJ”) previously changed its hard deadline for compliance with the installation requirements from March 15, 2012 to January 31, 2013, entities covered by Title III of the ADA should not rely on any more extensions.  If complying with the new ADA requirements fell off your to-do list, it’s time to start planning.

Here are a few questions to ask yourself when understanding how these rules could affect you:

Are you a Title III entity?

Whether you even have to worry about the fixed pool lift requirements depends on whether you are a Title III entity.  Title III prohibits discrimination on the basis of disability by places of public accommodation, including many private businesses, and places with accessibility requirements on such businesses.  Title III entities are businesses such as a hotel and motel, health club, recreation center, public country club or other business that has swimming pools, wading pools and spas.  If you fall under that category, the 2010 Standards apply.

What is this pool lift requirement? 

The 2010 Standards require that newly constructed or altered swimming pools, wading pools, and spas have an accessible means of entrance and exit to pools for those people with disabilities.  However, providing accessibility is conditioned on whether providing access through a fixed lift is “readily achievable.”  The technical specifications for when a means of entry is accessible are available on the DOJ website. Other requirements, based on pool size, include providing a certain number of accessible means of entry and exit, which are outlined in Section 242 of the Standards.  However, businesses should consider the differences in application of the rules depending on whether the pool is new or altered, or whether the swimming pool was in existence before the effective date of the new rule.  Full compliance may not be required for existing facilities; Section 242 and 1009 of the 2010 Standards outline such exceptions.

What exactly is a “fixed pool lift”?

A fixed lift is one that is attached to the pool deck or apron in some fashion.  Conversely, a non-fixed lift is not attached in any way.  Many businesses with pools have purchased or own portable (i.e. non-fixed) pool lifts.  If that portable lift is attached to the pool deck, then it could be considered a fixed lift and compliant under the rules.  Thus, owners of a portable lift may be able to comply with the ADA requirements by affixing lifts to the pool deck or apron.  Moreover, owners of such portable lifts will be required to affix the lifts as a means of compliance if it is readily achievable.  This exception for certain non-fixed lifts stemmed from confusion over the new regulations, spurring the DOJ to grant exceptions to certain entities that purchased an otherwise compliant non-fixed lift before March 15, 2012.  Those exceptions apply only if the non-fixed lifts comply with the 2010 Standards and if the owners keep the portable lifts in position for use at the pool and operational during all times that the pool is open to guests.

What is the “readily achievable” standard?

The ADA does not require providing access to existing pools through a fixed lift if it is not “readily achievable,” meaning that providing access is easily accomplishable without much difficulty or expense.  The DOJ has specified that this standard is a flexible, case by case analysis, so that the ADA requirements are not unduly burdensome.  However, businesses cannot simply claim that installing a fixed pool lift is not readily achievable.  Rather, factors such as the nature and cost, the overall financial resources of the site and the effect on expenses and resources are all considered and evaluated when determining the application of the standard. Though for some businesses immediate compliance may seem impossible because of issues such as the backorder on pool lifts, it is not a valid excuse for non-compliance.  Businesses are still required to comply with the 2010 Standards through other means, as specified in the Standards.

Should I shut my pool down if I haven’t complied?

If accessibility is not readily achievable, businesses should develop plans for providing access into the pool when it becomes readily achievable in the future.  Businesses that are worried about their current status of compliance should consult with legal counsel or call the ADA Information Line to speak with an ADA Specialist regarding any further questions.

Though compliance to the pool lift requirements may seem onerous, it is necessary to prevent legal and financial liability on the part of a Title III covered business.  These requirements also potentially affect tax breaks under the IRS Code, insurance coverage, ongoing maintenance and accessibility obligations and staff training requirements, all of which are even more of a reason to take compliance seriously.

© Lowndes, Drosdick, Doster, Kantor & Reed, PA

2013 National Law Review Law Student Writing Competition

The National Law Review is pleased to announce their 2013 Law Student Writing Competition

NLR-Writing-Competition-2013

The National Law Review (NLR) consolidates practice-oriented legal analysis from a variety of sources for easy access by lawyers, paralegals, law students, business executives, insurance professionals, accountants, compliance officers, human resource managers, and other professionals who wish to better understand specific legal issues relevant to their work.

The NLR Law Student Writing Competition offers law students the opportunity to submit articles for publication consideration on the NLR Web site.  No entry fee is required. Applicants can submit an unlimited number of entries each month.

  • Winning submissions will be published according to specified dates.
  • Entries will be judged and the top two to four articles chosen will be featured on the NLR homepage for a month.  Up to 5 runner-up entries will also be posted in the NLR searchable database each month.
  • Each winning article will be displayed accompanied by the student’s photo, biography, contact information, law school logo, and any copyright disclosure.
  • All winning articles will remain in the NLR database for two years (subject to earlier removal upon request of the law school).

In addition, the NLR sends links to targeted articles to specific professional groups via e-mail. The NLR also posts links to selected articles on the “Legal Issues” or “Research” sections of various professional organizations’ Web sites. (NLR, at its sole discretion, maydistribute any winning entry in such a manner, but does not make any such guarantees nor does NLR represent that this is part of the prize package.)

Why Students Should Submit Articles:

  • Students have the opportunity to publicly display their legal knowledge and skills.
  • The student’s photo, biography, and contact information will be posted with each article, allowing for professional recognition and exposure.
  • Winning articles are published alongside those written by respected attorneys from Am Law 200 and other prominent firms as well as from other respected professional associations.
  • Now more than ever, business development skills are expected from law firm associates earlier in their careers. NLR wants to give law students valuable experience generating consumer-friendly legal content of the sort which is included for publication in law firm client newsletters, law firm blogs, bar association journals and trade association publications.
  • Student postings will remain in the NLR online database for up to two years, easily accessed by potential employers.
  • For an example of  a contest winning student written article from Northwestern University, please click here or please review the winning submissions from Spring 2011.

Congratulations to our 2012 and 2011 Law Student Writing Contest Winners

Fall 2012: October Contest

Spring 2012:

Winter 2012:

Fall 2011:

Content Guidelines and Deadlines

Content Guidelines must be followed by all entrants to qualify. It is recommended that articles address the following monthly topic areas:

March 2013 Suggested Topic:

Labor Law

  • Submission Deadline:  Monday, March 4, 2013

Articles covering current issues related to other areas of the law may also be submitted. Entries must be submitted via email to lawschools@natlawreview.com by 5:00 pm Central Standard Time on the dates indicated above.

Articles will be judged by NLR staff members on the basis of readability, clarity, organization, and timeliness. Tone should be authoritative, but not overly formal. Ideally, articles should be straightforward and practical, containinguseful information of interest to legal and business professionals. Judges reserve the right not to award any prizes if it is determined that no entries merit selection for publication by NLR. All judges’ decisions are final. All submissions are subject to the NLR’s Terms of Use.

Students are not required to transfer copyright ownership of their winning articles to the NLR. However, all articles submitted must be clearly identified with any applicable copyright or other proprietary notices. The NLR will accept articles previously published by another publication, provided the author has the authority to grant the right to publish it on the NLR site. Do not submit any material that infringes upon the intellectual property or privacy rights of any third party, including a third party’s unlicensed copyrighted work.

Manuscript Requirements

  • Format – HTML (preferred) or Microsoft® Word
  • Length – Articles should be no more than 5,500 words, including endnotes.
  • Endnotes and citations – Any citations should be in endnote form and listed at the end of the article. Unreported cases should include docket number and court. Authors are responsible for the accuracy and proper format of related cites. In general, follow the Bluebook. Limit the number of endnotes to only those most essential. Authors are responsible for accuracy of all quoted material.
  • Author Biography/Law School Information – Please submit the following:
    1. Full name of author (First Middle Last)
    2. Contact information for author, including e-mail address and phone number
    3. Author photo (recommended but optional) in JPEG format with a maximum file size of 1 MB and in RGB color format. Image size must be at least 150 x 200 pixels.
    4. A brief professional biography of the author, running approximately 100 words or 1,200 characters including spaces.
    5. The law school’s logo in JPEG format with a maximum file size of 1 MB and in RGB color format. Image size must be at least 300 pixels high or 300 pixels wide.
    6. The law school mailing address, main phone number, contact e-mail address, school Web site address, and a brief description of the law school, running no more than 125 words or 2,100 characters including spaces.

To enter, an applicant and any co-authors must be enrolled in an accredited law school within the fifty United States. Employees of The National Law Review are not eligible. Entries must include ALL information listed above to be considered and must be submitted to the National Law Review at lawschools@natlawreview.com. 

Any entry which does not meet the requirements and deadlines outlined herein will be disqualified from the competition. Winners will be notified via e-mail and/or telephone call at least one day prior to publication. Winners will be publicly announced on the NLR home page and via other media.  All prizes are contingent on recipient signing an Affidavit of Eligibility, Publicity Release and Liability Waiver. The National Law Review 2011 Law Student Writing Competition is sponsored by The National Law Forum, LLC, d/b/a The National Law Review, 4700 Gilbert, Suite 47 (#230), Western Springs, IL 60558, 708-357-3317. This contest is void where prohibited by law. All entries must be submitted in accordance with The National Law Review Contributor Guidelines per the terms of the contest rules. A list of winners may be obtained by writing to the address listed above. There is no fee to enter this contest.

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