June 15, 2016

Stroock Attorneys and Practices Recommended by The Legal 500 United States 2016

PRESS RELEASE | Stroock & Stroock & Lavan LLP, a national law firm with offices in New York, Los Angeles, Miami and Washington, DC, announced The Legal 500 United States has recommended 47 attorneys across 15 practice categories and honored two attorneys as "Leading Lawyers."


Stroock Attorneys to Speak at Lorman's "METRO2, E-Oscar and the New FCRA/CFPB Compliance Requirements" Webinar

Stroock Partner Stephen Newman and Associate Julieta Stepanyan will be speaking at Lorman's "METRO2, E-Oscar and the New FCRA/CFPB Compliance Requirements" webinar.

  • July 28, 2016 - Lorman "METRO2, E-Oscar and the New FCRA/CFPB Compliance Requirements"
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  • December 19-20, 2016 - PLI's Nuts and Bolts of Corporate Bankruptcy 2016
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    "Ambac Assurance Corp. v. Countrywide Home Loans, Inc.: New York Court of Appeals Rejects Expansion of the Common Interest Exception to Waiver of Attorney-Client Privilege"

    The New York Court of Appeals recently issued a decision rejecting the expansion of the common interest exception to waiver of the attorney-client privilege. In a split decision issued June 9, 2016, the Court of Appeals held in Ambac Assurance Corp. v. Countrywide Home Loans, Inc. that the common interest exception applies only where shared information relates to the parties' legal interest in a pending or threatened litigation.

    This Stroock Special Bulletin discusses the Court of Appeals ruling, which overturns an Appellate Division, First Department decision that held the exception applied even in the absence of a pending or threatened litigation, so long as the communication related to a shared legal interest – for instance, the completion of a merger.

    The pending-or-threatened litigation requirement narrows the availability of this important exception. Although the decision should be of interest to all attorneys and parties considering the disclosure of privileged information to a third party, it should be of particular interest to corporate transactional practitioners, as it will have consequences for parties sharing privileged communications in certain corporate transactions.


    "SEC Enforcement Heightens Concern Over Broker-Dealer Registration For Private Equity Firms"

    The Securities and Exchange Commission (“SEC”) recently announced it had settled charges for alleged unregistered brokerage activity and other alleged securities law violations with private equity fund advisory firm Blackstreet Capital Management (“BCM”). This Stroock Special Bulletin provides an overview of the

    enforcement action, in which a private equity advisor was alleged to have improperly acted as an unregistered broker-dealer after earning a success fee on portfolio transactions that BCM brokered in-house, and discusses the implications of the settlement for sponsors or managers who expect to receive a deal fee for portfolio transactions.


    "Cross-Border Application of Margin Requirements for Uncleared Swaps"

    On May 24, 2016, the Commodity Futures Trading Commission ("CFTC") issued a final rule (the "CFTC Final Rule") on the cross-border application of the CFTC's margin requirements for uncleared swaps for swap dealers ("SDs") and major swap participants ("MSPs") that do not have a prudential regulator. On October 30, 2015, the Department of the Treasury's Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Farm Credit

    Administration and Federal Housing Finance Agency (collectively, the "Prudential Regulators") had jointly adopted a final rule and interim final rule that addressed, among other topics, the cross-border application of margin requirements for uncleared swaps for SDs and MSPs that fall under their prudential regulation (together, the "Prudential Regulators Final Rule" and, with the CFTC Final Rule, the "Final Rules"). This Stroock Special Bulletin compares and contrasts these Final Rules.


    "CFPB Announces Proposed Rule Regulating Payday Lending"

    On June 2, 2016, the Bureau of Consumer Financial Protection ("CFPB") released its Proposed Rule (and Official Interpretations and Proposed Disclosures) regarding Payday, Vehicle Title and Certain High-Cost Installment Loans. The CFPB's complex proposal calls for multiple variations in regulatory treatment for the different types of loans and borrower scenarios covered under this regulatory scheme. Accordingly, close analysis will be necessary for providers to determine the compliance requirements applicable to specific offerings.

    What is already clear, however, is that the complex implementation and compliance challenges presented by the Proposed Rule will have major impact on the entire small-dollar, short-term lending market, likely driving many current providers out of business while leading others to explore innovative platforms to fill the void. The comment period promises to be highly active, presenting some possibility for change before the CFPB's adoption of a final Rule, which itself is likely to be the subject of rigorous legal challenge.


    "FinCEN Orders an Expansion of Anti-Money Laundering Programs"

    On May 11, 2016, the U.S. Treasury Department's Financial Crimes Enforcement Network ("FinCEN") issued final rules (the "Final Rules") under the Bank Secrecy Act (the "BSA") that expand customer due diligence ("CDD") requirements applying to banks, broker-dealers, mutual funds, futures commission merchants and introducing brokers ("Covered Institutions"). Under the Final Rules, a Covered Institution is required to supplement its current anti-money laundering ("AML") program to (i) verify the identity of the "beneficial owners" of a Covered Institution's "legal entity customers" (subject to certain exemptions, as noted below) ("Customers"), and (ii) monitor suspicious activity and update customer information (including information regarding beneficial ownership) against risk profiles established for each Customer. Covered Institutions must comply with the Final Rules by May 11, 2018 (the "Effective Date").

    According to FinCEN, the Final Rules are necessary to clarify and strengthen CDD under the BSA regime, and are intended to "enhance financial transparency and help safeguard the financial system against illicit use." The Final Rules are viewed by FinCEN as synergistic with both domestic efforts to prevent abuse of the financial system (e.g., by assisting law enforcement to identify certain bad actors attempting to conceal illicit activity) and recent international efforts to promote an information exchange with other jurisdictions (most recently, under the Foreign Account Tax Compliance Act ("FATCA")). This Stroock Special Bulletin summarizes and discusses practical applications of the Final Rules, which generally will require a Covered Institution to complement its existing AML program to require risk-based analyses on an ongoing basis, a higher standard of diligence than required by the current BSA regime.