SUMMARY

As the result of a recent amendment to the Cayman Islands Mutual Funds Law, master funds formed in the Cayman Islands may be required to register with the Cayman Islands Monetary Authority (CIMA). Prior to the passage of the Mutual Funds (Amendment) Bill 2011 (the “Amendment”) in December 2011, many master funds were exempt from registration with CIMA in reliance on an exception for funds with “not more than 15 investors”. With the passage of the Amendment, master funds will no longer be able to rely on this exception and clients now need to determine whether any Cayman Islands master funds in their master-feeder fund structures will be required to comply with the new registration and filing requirements.  [more...]

SUMMARY

As we previously noted in our Foley Adviser dated February 3, 2010, “New Massachusetts Data Security Law and Regulations-Comprehensive Information Security Plan required before March 1, 2010”, under the regulations, an investment adviser must require third-party service providers by contract to implement and maintain appropriate security measures for personal information. There currently is a grandfather provision that deems any contract with a service provider entered into before March 1, 2010 to be in compliance even if it makes no reference to data protection.  [more...]

SUMMARY

The Massachusetts Securities Division (the “Division”) has adopted new regulations relating to the regulation of investment advisers. The new regulations will become effective on February 3, 2012, but will not be enforced by the Division until August 3, 2012, six months after the effective date.  [more...]

SUMMARY

On January 21, 2012, the Internal Revenue Service (IRS) released a revised version of Form 990 and accompanying instructions and schedules for tax year 2011. Notable changes to Form 990 and its associated schedules relate to joint ventures, investment partnerships, compensation disclosure and hospitals. In addition, the instructions to the revised form include many clarifications that were lacking in previous guidance.

SUMMARY

On January 18, 2011 the Massachusetts Securities Division (the “Division”) issued guidance on the use of social media by investment advisers registered with The Commonwealth of Massachusetts. The release is summarized below, and follows similar guidance issued by the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations in an exam alert issued earlier this month (see Foley Adviser of January 13, 2012 on the exam alert). [more...]

SUMMARY

Foley Hoag's Product Liability Update is a quarterly update concerning developments in product liability and related law of interest to product manufacturers and sellers. If you find this update useful, please encourage your colleagues and contacts to also register with us on our Web site. As always, you can access all of our publications at www.foleyhoag.com. For questions or inquiries about the Product Liability & Complex Tort Practice Group, contact David Geiger at 617 832 1124.

Included in this Issue:

• First Circuit Upholds Design Defect Verdict Involving Table Saw, Holding Plaintiff Adequately Proved Availability of Feasible Alternative Design Despite Weight and Price Differences From Existing Saw, and Hence Verdict Also Did Not Impermissibly Ban Entire Category of Product
• Massachusetts Superior Court Finds Personal Jurisdiction Over Foreign Ski Manufacturer Where Plaintiff Purchased Allegedly Defective Skis in Massachusetts from Store Located Through Search Function on Manufacturer’s Website
• Massachusetts Federal Court Holds Trademark Licensor that Substantially Participated in Design of Excavating Machine Liable as “Apparent Manufacturer” Even Though Licensor Did Not Participate in Machine’s Sale
• Massachusetts Federal Court Holds Plaintiffs in Class Actions Arising Out of Lead in Fruit Products Lacked Injury in Fact, and Hence Standing, Where Products Had Harmed No One and Complied with Federal Standards; Threat of Future Physical Injury Too Speculative, and Plaintiffs Did Not Allege Diminished Value That Could Constitute Economic Injury
• Massachusetts Federal Court Finds Testimony of Frequent Plaintiff’s Expert on Design of Stove Burner Knob Admissible Because Expert Was Qualified as Licensed Mechanical Engineer, and Methodology of Relying on Personal Inspection, Fire Investigator Findings and Prior Incident Reports Was Reliable; Potential Bias Was Matter for Cross-Examination
• Massachusetts Federal Court Holds Expert Testimony Supporting Causal Link Between Infant Formula and Plaintiff’s Injuries Required to Prevail on Claims; Court Stays Discovery and Dismisses Without Prejudice for Failure to Produce Expert Report or Affidavit

SUMMARY

All investment advisers registered with the Securities and Exchange Commission (“SEC”) are required to review their compliance policies and procedures at least annually. Many advisers traditionally conduct this review in March of each year. Registered advisers should commence their annual reviews promptly and document the review process.  [more...]

SUMMARY

Asset managers are reminded that The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) implemented a significant change in the approach taken under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), regarding the registration with the Securities and Exchange Commission (the “SEC”) of advisers to unregistered funds. This change reflects two fundamental alterations of basic regulatory philosophy: a determination that advisers to such funds must register with the Securities and Exchange Commission (the “SEC”) unless covered by a specific exemption from registration; and a greater reliance on state regulators to oversee advisers generally. The deadline for managers required to register with the SEC is March 30, 2012. In order to make certain that a registration is effective by March 30, managers should file an application with the SEC by February 14, 2012.  [more...]

SUMMARY

On January 4, 2012 the SEC’s Office of Compliance Inspections and Examinations issued an exam alert to registered investment advisers which included guidance on the use of social media. The alert is not meant to be a comprehensive summary of all compliance matters related to the use of social media, but rather is intended to cover measures that may assist advisers in developing procedures to prevent violations of the Advisers Act and other federal securities law with respect to the use of social media such as the antifraud, compliance and record keeping provisions.  [more...]

SUMMARY

The Massachusetts Securities Division has amended proposed rules relating to the regulation of investment advisers. We outlined the previous proposals in our April 21, 2011 Foley Adviser-“Massachusetts Secretary of State Proposes New Regulations for Investment Advisers in response to Dodd-Frank Act.” The amended proposal, after consideration of previously submitted public comments, makes substantive changes to (i) the definition of “institutional buyer,” (ii) the proposed private fund adviser exemption (including the introduction of a grandfathering provision), and (iii) requirements for advisers with discretion over, or custody of, client funds. [more...]

SUMMARY

Included in this Issue:

• Activity Level of New England Series A Transactions
• Activity Level of New England Series B and Later Round Transactions
• Size of New England Q3 2011 Series A Transactions by Industry
• Size of New England Q3 2011 Series B and Later Round Transactions by Industry
• The Numbers: by Dave Broadwin
• Selected New England Series A Round Transactions:
  • Third Quarter 2011
• Selected New England Series B and Later Round Transactions:
  • Third Quarter 2011
• Terms of Selected New England Series A Round Transactions 2010-2011
• Terms of Selected New England Series B and Later Round Transactions 2010-2011
• The National Activity Level Summary
  • National Series A Deals by Industry
  • National Series B and Later Round Deals by Industry

SUMMARY

On January 3, 2012, the National Labor Relations Board (NLRB) held in D.R. Horton that a mandatory arbitration agreement between an employer and its employees violated the National Labor Relations Act (NLRA), because it required employees to waive their rights to participate in class or collective actions. Specifically, the agreement stated that an arbitrator “may hear only Employee’s individual claims and does not have the authority to fashion a proceeding as a class or collective action or to award relief to a group or class of employees in one arbitration proceeding.”  [more...]

SUMMARY

Effective tomorrow, January 10, 2012, applicants filing international patent applications under the Patent Cooperation Treaty (PCT) in the U.S. Patent and Trademark Office (USPTO) will be able to designate the Russian Federal Service for Intellectual Property (Rospatent) as the International Search Authority (ISA) and pay a Search Fee of only $415.  [more...]

SUMMARY

Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) set forth, among other regulatory changes, a revised net worth test for a natural person to qualify as an “accredited investor” for purposes of Regulation D under the Securities Act of 1933, as amended (the primary private placement exemption relied on by investment advisers managing private investment funds). The revised standard, which came into effect on July 21, 2010, requires such individual’s net worth or joint net worth with the spouse of that person, at the time of investment to be $1,000,000, excluding the value of the primary residence of such natural person.  [more...]

SUMMARY

On December 14, 2011, the Centers for Medicare & Medicaid Services (“CMS”) released the long-awaited Proposed Rule for implementing the so-called “Sunshine Act” physician payment reporting requirements. These proposed regulations provide some additional clarity regarding the reporting obligations for most drug and device manufacturers, contained in Section 6002 of the Affordable Care Act (“the Act”). The Act will require most drug and device manufacturers to file annual disclosure reports detailing their financial relationships with physicians and teaching hospitals.  [more... ]

SUMMARY

Effective January 1, 2012, employers with 50 or more employees in Connecticut are required to pay sick leave to qualified “service workers.” Connecticut becomes the first state in the country to mandate paid sick leave. [more...]

SUMMARY

In 2010, Congress enacted legislation which could provide investors who acquire qualified small business stock (“QSBS”) before the end of 2011 with a significant tax benefit. The law permits an exclusion of 100% of the gains realized on the sale of QSBS if the QSBS was acquired by the investor after September 27, 2010 and on or before December 31, 2011 and held for more than five years. Under the temporary total exclusion, excluded gains also are exempt from the alternative minimum tax. As a result, under this exclusion, the effective federal income tax rate on qualifying capital gains generally will be zero.  [more...]

SUMMARY

Last week, Governor Deval Patrick signed into law “An Act Relative to Gender Identity,” also known as the Massachusetts Transgender Equal Rights Bill. This law, which will go into effect in July 2012, extends the state’s equal rights provisions to transgendered individuals by prohibiting discrimination on the basis of gender identity in employment, housing, credit and education. The law amends the existing state anti-discrimination law, Chapter 151B, to include “gender identity” as a protected category. [more...]

SUMMARY

In this Issue: 

• DOJ’s Recent Trend of Prosecuting Individuals for FCPA Violations Continues with Longer Prison Sentences and Increased Fines

SUMMARY

Overview

Yesterday, the United States Supreme Court granted certiorari (meaning it has agreed to hear an appeal) on three petitions concerning the constitutionality of the Affordable Care Act (“ACA”). Given the Supreme Court’s timeline for the filing of briefs, oral argument will likely be scheduled for the end of March or beginning of April 2012. The Supreme Court has set aside five and a half hours for oral arguments on four different issues. Under this timeline, the Court’s final ruling will likely be handed down at the end of June 2012, just before the Court recesses for the summer.

Key Points About The Decision

The Supreme Court has complete discretion to decide which cases (and which issues raised by those cases) it will hear. Each year the Court receives approximately 10,000 certiorari petitions, of which it hears between 80 and 100. A petition must receive the vote of four Justices to be granted certiorari. [continues...]