Posted on May 26, 2009 by Joseph M. Wallin

Online Social Media and SEC Regulations

 

By Garry J. Schnell
05.21.09

The use of online social media, such as blogs, Twitter, Facebook and electronic shareholder forums, as a means to interact with the public is becoming more accepted and prevalent in the business community. While online social media provides many benefits, there are potential pitfalls to its use, including federal securities law violations, disclosure of confidential information, and various tort claims, such as invasion of privacy or defamation.

Just like Web sites, online social media can benefit public companies in several areas including advertising, marketing and investor relations. In addition to company-sponsored blogs, employees may also have an interest in, or are already using, online social media to discuss a variety of information from product development to financial or personnel issues. Besides other legal issues and pitfalls, public companies developing a social media policy should consider compliance with Securities and Exchange Commission (SEC) regulations. In particular, Regulation FD (Fair Disclosure) prohibits the selective disclosure of material information.

In August 2008, the SEC issued guidance that primarily addresses (1) when information posted on a company Web site is “public” for purposes of Regulation FD and (2) company liability for information on Web sites. For the first time, the SEC recognized that companies may post information, and have that information be considered “disseminated,” without having to place the same information on a newswire, or file (or furnish) it on a Form 8-K. The SEC guidance also discussed the use of “interactive web-site features,” such as the online social media discussed in this advisory, as a means to disseminate information to the public.

 

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Posted on May 26, 2009 by Joseph M. Wallin

Washington Supreme Court Adopts Delaware Standard For Shareholder Derivative Actions

How does Washington corporate law determine whether a shareholder's derivative complaint should be dismissed for failure to make a demand on the corporation?  The Washington Supreme Court had this say:  

"In a well reasoned opinion, Judge Thomas Zilly of the federal trial bench concluded that Washington would likely follow Delaware’s demand futility standard. In re Cray, Inc., 431 F. Supp. 2d 1114, 1121 (W.D. Wash. 2006) (citing Rales, 634 A.2d at 932 & n.4 and Aronson, 473 A.2d at 814). We agree. Delaware’s courts are well versed in this area. Until our legislature declares otherwise, Washington is a demand futility state and follows Delaware."

  You can read the opinion here.

 

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Posted on May 13, 2009 by Joseph M. Wallin

Copy of Schumer's "Shareholder Bill of Rights Act of 2009"

You can read a copy of Senator Schumer's proposed Shareholder Bill of Rights Act of 2009 here.

Wall Street Journal commentary.

See also coverage at the Harvard Corporate Governance Blog.

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Posted on May 4, 2009 by Joseph M. Wallin

Senator Schumer's Corporate Governance Bill

 We are looking forward to reading Senator Schumer's new corporate governance bill.  We don't have a copy of the bill yet, but we do have a copy of a letter that the Senator sent to his colleagues.  Apparently the bill will require shareholder approval of golden parachute payments.  We will post you once we see a copy of the bill.

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Posted on April 30, 2009 by Joseph M. Wallin

Federal Budget Does Not Include Cap On Itemized Deductions

 We have previously blogged about the Obama administration's proposal to cap personal deductions for high income taxpayers at 28%.  According to the New York Times, this proposal did not make it into the budget.  Good news for high income taxpayers and charities.

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Posted on March 24, 2009 by Joseph M. Wallin

Department of Labor Issues New Model COBRA Notices

By Elizabeth J. Deckman, Jeff Belfiglio, Stuart Harris and Holly Wylam Klein

On March 19, 2009, the Department of Labor issued four new model COBRA notices designed to help employers satisfy their new COBRA notice obligations under the American Recovery and Reinvestment Act. Under the Act, certain persons who lost health care coverage as a result of an involuntary termination of employment are entitled to a subsidy of 65 percent of the employee's cost of COBRA coverage.

(For more information regarding the Act and the COBRA subsidy, please refer to our Feb. 24, 2009, advisory bulletin, “New COBRA Rules Require Prompt Action.” In addition, for your convenience, we've included a sound file of a Davis Wright Tremaine teleseminar, “How Will New COBRA Rules Affect You?” held on March 12, 2009.) Continue reading...

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Posted on March 17, 2009 by Joseph M. Wallin

IRS Issues Ponzi Scheme Tax Loss Guidelines

 

Commissioner Shulman's Senate Finance Testimony on Ponzi Schemes and Offshore Tax Evasion Legislation

"PONZI SCHEME PUBLISHED GUIDANCE

Summary

The IRS is issuing two guidance items to assist taxpayers who are victims of losses from Ponzi-type investment schemes. While I recognize that the Committee is today focused on one specific case, the IRS guidance is not specific to this case.  The first item is arevenue ruling that clarifies the income tax law governing the treatment of losses in such schemes. The second is a revenue procedure that provides a safe-harbor method of computing and reporting the losses."

Rev. Rul. 2009-9 (http://www.irs.gov/pub/irs-drop/rr-09-09.pdf)

 
Rev. Pro. 2009-20 (http://www.irs.gov/pub/irs-drop/rp-09-20.pdf)
 
 
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Posted on March 17, 2009 by Joseph M. Wallin

Tax-Free Like Kind Exchanges of Trademarks

 "Upon further consideration, the Office of Associate Chief counsel (Income Tax & Accounting) has concluded that the analysis of Newark Morning Ledger Co. applies in determining whether intangibles constitute goodwill or going concern value within the meaning of § 1.1031(a)‑2(c)(2).  Accordingly, intangibles such as trademarks, trade names, mastheads, and customer‑based intangibles that can be separately described and valued apart from goodwill qualify as like‑kind property under § 1031.  In our opinion, except in rare and unusual situations, intangibles such as trademarks, trade names, mastheads, and customer‑based intangibles can be separately described and valued apart from goodwill.  Of course, to qualify as like‑kind property under § 1031, the property must satisfy all other requirements of § 1031 including the nature and character rules of § 1.1031(a)‑2(c)(1).  Accordingly, the Service should not follow the position in TAM 200602034 and IRS NSAR 20074401F on this issue.  We are available to assist should you have questions on whether intangibles are of like kind under § 1.1031(a)-2(c)(1)."

See www.corpfinblog.com/uploads/file/0911006.pdf

 

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Posted on March 16, 2009 by Joseph M. Wallin

Summary of Selected Business and Energy Tax Provisions of American Recovery and Reinvestment Act of 2009

By Pamela Charles

 H.R. 1, the American Recovery and Reinvestment Act of 2009 was signed into law by President Obama on February 17, 2009

I.    Selected Business Provisions

A.   Bonus Depreciation Extended Through 2009

Prior law provided an additional depreciation deduction equal to 50% of the adjusted tax basis of qualified property placed in service in 2008 (or in 2009 for certain longer-lived and transportation property) in addition to the generally applicable depreciation deductions.  Qualified property is generally any property (1) to which the MACRS rules apply that has a recovery period of 20 years or less, certain computer software, water utility property and qualified leasehold improvements, (2) the original use of which begins with the taxpayer after December 31, 2007, and (3) that is acquired during 2008. Corporate taxpayers were provided with an election to increase their general business credit (including R&D credit) or AMT credit limitation by the bonus depreciation amount in lieu of claiming the additional bonus depreciation deduction.  The bonus depreciation amount is 20% of the amount by which the depreciation deduction calculated with bonus depreciation exceeds the depreciation deduction otherwise allowed.

The Act extended the placed-in-service date for property eligible for 50% bonus depreciation to 2009 (2010 for certain longer-lived and transportation property).  In addition, the Act extended the election to increase the general business credit or AMT credit limitation in lieu of claiming bonus depreciation to apply to property placed in service in 2009 (or 2010 for certain longer-lived and transportation property).

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Posted on March 13, 2009 by Joseph M. Wallin

Federal Agencies Begin Process of Implementing Broadband Stimulus Program


By James M. Smith, Paul B. Hudson and K.C. Halm

Work in key Washington, D.C., agencies continues toward disbursement of the $7 billion allocated for broadband stimulus programs. As discussed in detail in this advisory, the Department of Commerce's National Telecommunications Information Administration (NTIA) and the Department of Agriculture's Rural Utilities Service (RUS) have initiated meetings and released a request for comments on the scope of these programs. However, for companies interested in seeking funding, two of the most important immediate focal points are outside of Washington, D.C.
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