Tagged: New York Law

Enough Said: Southern District of New York Decision Reiterates Limits of Disclosure Obligations Under Securities Laws

Enough Said: Southern District of New York Decision Reiterates Limits of Disclosure Obligations Under Securities Laws

The Southern District of New York’s recent decision in Employees Retirement System of the City of Providence v. Embraer S.A. may provide useful guidance for companies struggling with disclosure obligations in the midst of ongoing investigations into potential unlawful conduct. Defendant Embraer, S.A., a Brazilian aircraft manufacturer, made a series of disclosures regarding external and internal investigations into potential U.S. Foreign Corrupt Practices Act (FCPA) violations. Specifically, in November 2011, Embraer disclosed investigations by the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) and advised that it had retained outside counsel to conduct an internal investigation. Although the company repeatedly warned that it may be required to pay substantial fines or incur other sanctions, it also stated early in the investigation that it did not believe there was a basis to estimate reserves or quantify any loss contingency. In July 2016, Embraer announced that settlement negotiations with the DOJ and SEC had progressed to a point warranting recognition of a $200 million loss contingency. Nearly three months later, the company announced a settlement that included a fine of over $107 million and disgorgement of nearly $84 million in profits. On December 13, 2016, Employees’ Retirement System of the...

The Power of New York’s Borrowing Statute

The Power of New York’s Borrowing Statute

On October 11, 2016, the Supreme Court of New York, Appellate Division, First Department, decided 2138747 Ontario, Inc. v. Samsung C&T Corp., et al., which serves as a reminder to attorneys that New York’s borrowing statute applies even where the parties agreed to a New York choice-of-law provision. The borrowing statute, CPLR 202, provides that, when a non-New York resident sues on a cause of action accruing outside New York, the complaint must be filed timely under the statute of limitations of both New York and the jurisdiction where the cause of action accrued. The statute’s underlying objective is to prevent forum shopping by nonresident plaintiffs. In Ontario, the plaintiff, a corporation formed under the law of Ontario, Canada, was a creditor of SkyPower Corporation, a bankrupt Canadian renewable energy developer. SkyPower’s bankruptcy trustee assigned to the plaintiff all of its claims against the defendants. The plaintiff then sought damages against the defendants for a breach of a nondisclosure and confidentiality agreement (NDA), which contained a broad New York choice-of-law provision. The plaintiff’s complaint was untimely under Ontario’s two-year statute of limitations but was timely under New York’s six-year statute of limitations. The trial court found that Ontario’s two-year statute...

NY Updates Cybersecurity Requirements for Financial Services Companies 0

NY Updates Cybersecurity Requirements for Financial Services Companies

On December 28, 2016, the New York Department of Financial Services (“DFS”) published an updated version of its proposed “Cybersecurity Requirements for Financial Services Companies.” The updated regulations will become effective on March 1, 2017. As previously reported, these regulations are an important step in the ongoing national dialogue about reasonable and necessary cybersecurity standards for all businesses.

Regulations Proposed by NY Department of Financial Services are a Significant Development for Regulated Entities … and Everyone Else 0

Regulations Proposed by NY Department of Financial Services are a Significant Development for Regulated Entities … and Everyone Else

On September 13, 2016, New York Governor Andrew M. Cuomo announced new first-in-the-nation proposed regulations to protect against the ever growing threat of cyber-attacks in the financial services industry. The proposed regulations, to be enforced by the New York State Department of Financial Services, would apply only to an entity regulated by the NY Department of Financial Services – from a multi-national bank to a “mom-and-pop” operation. However, the regulations are important for all companies to review and consider, regardless of their location or scope of operations, because the proposal represents an important step in the ongoing national dialogue about reasonable and necessary cybersecurity standards for all businesses.

“Bound by the Terms of His Bargain”: Third Circuit Underscores the Difficulty of Vacating Arbitration Awards 0

“Bound by the Terms of His Bargain”: Third Circuit Underscores the Difficulty of Vacating Arbitration Awards

In a recent precedential decision, Whitehead v. The Pullman Grp., LLC, the Third Circuit reminded litigants that it’s as tough as ever to vacate an arbitration award – and cast further doubt on the viability of the “manifest disregard of the law” standard here. Appellant Pullman entered into a contract with two singer-songwriters in May 2002, which gave him the exclusive option to purchase their song catalog following a 180-day due diligence period.

Third Circuit Holds That Personal Injury Plaintiffs’ “Mere Continuation” Successor Liability Claims Against Purchaser of Bankrupt Debtor’s Assets Belong to Bankruptcy Estate, Not Plaintiffs 0

Third Circuit Holds That Personal Injury Plaintiffs’ “Mere Continuation” Successor Liability Claims Against Purchaser of Bankrupt Debtor’s Assets Belong to Bankruptcy Estate, Not Plaintiffs

In In re Emoral, Inc., the Third Circuit, in a decision of first impression, held that personal injury claims of individuals allegedly harmed by a bankrupt debtor’s products cannot be asserted against the purchaser of the debtor’s assets since they are “generalized claims” which belong to the debtor’s estate and not to the harmed individuals.

New York Appellate Division Reminds New York Practitioners That They Ignore CPLR 3212(a)’s Filing Deadlines at Their Peril 0

New York Appellate Division Reminds New York Practitioners That They Ignore CPLR 3212(a)’s Filing Deadlines at Their Peril

In Kershaw v. Hospital for Special Surgery, the First Department of New York’s Appellate Division affirmed the denial of a summary judgment motion for being untimely filed, notwithstanding that the tardy motion clearly had merit, as emphasized by the dissent. In so doing, the Kershaw Court reinforced the notion that attorneys who disregard the filing deadlines set forth by the New York courts under the New York Civil Practice Law and Rules (“CPLR”) do so at their own peril.

Second Circuit, on First Impression, Holds that Application of Federal Post-Judgment Interest Rate (Currently .25%) to District Court Judgment Docketed in State Court is Constitutional 0

Second Circuit, on First Impression, Holds that Application of Federal Post-Judgment Interest Rate (Currently .25%) to District Court Judgment Docketed in State Court is Constitutional

In Cappiello v. ICD Publications, Inc., the Second Circuit held that the Erie doctrine does not require that post-judgment interest on a federal judgment docketed in state court accrue at the rate provided under state law. Instead, interest on such a judgment must accrue at the rate provided by federal law.

New York Court Upholds Separate Entity Rule, Quashes Non-Party Subpoenas Seeking Information on Overseas Bank Accounts 0

New York Court Upholds Separate Entity Rule, Quashes Non-Party Subpoenas Seeking Information on Overseas Bank Accounts

In Ayyash v. Koleilat, the Supreme Court of the State of New York, New York County, upheld and arguably extended the New York “separate entity” rule, which provides that each branch of a bank is treated as a separate entity, in no way concerned with accounts maintained by depositors in other branches or at a home office. Under this rule, a New York branch cannot be compelled to turn over assets maintained at another branch of the same bank. The Court’s decision appears to extend this rule to hold that — at least in circumstances where international comity considerations support broad application of the separate entity rule — a New York branch cannot be compelled to provide information or discovery concerning assets maintained at a foreign branch.

Second Circuit Clarifies the Pleading Standard for “Substantial Assistance” in SEC Enforcement  Cases Against Aiders and Abettors 0

Second Circuit Clarifies the Pleading Standard for “Substantial Assistance” in SEC Enforcement Cases Against Aiders and Abettors

In SEC v. Apuzzo, the Second Circuit Court of Appeals recently lowered the pleading standard for aiding and abetting of securities fraud in SEC enforcement actions by reversing the District Court’s finding that proximate causation of the ultimate harm was required to establish substantial assistance. When evaluating aiding and abetting claims, courts previously extended the proximate cause requirement that applies in litigation between private parties to SEC enforcement proceedings. The SEC’s complaint in Apuzzo outlined the details of a complex, but calculated, fraud scheme. The defendant-appellee, Joseph Apuzzo, was the CFO of an equipment manufacturer — Terex Corporation.