Exam 4 BLAW

Know the definition of a public company

A large company that's securities traded are securities markets

Know what the Sherman Act prohibits

Breaks up monopolies

Know what is considered illegal practices for security professionals

Churning and scalping

Can congress prohibit judicial review of a particular administrative decision

Congress gets to decide where/when you go to court

Know the holding of KS Trade LLC v. International Gemological Inst. Inc.

KS Trade's lawsuit can go forward

Know what the U.S. v. Kosinski case said about insider trading for a scientist conducting tests for a publicly traded company.

Kosinki is guilty due to insider trading

Know the law that allows a private person to sue a false advertiser

Lanham act

Know what the court decided in Sierra CLub v. EPA regarding the plaintiff's standing

Sierra club has sufficient standing

Know the holding of the Georgia v. Tennessee Copper Company Case

The Court held that an injunction to shut down the smelter could be issued if it could not control the pollution enough to stop the damage. Cases like that one were not uncommon.

Know what types of boycotss are prohibited under the Sherman Act

The boycott is used to force compliance with a price-fixing scheme or some other restraint of trade. Boycott cases usually fall under the per se rule against price fixing.

Know what the Chuway v. National Action Financial Services Court held

The letter violated the FDCPA

Know how states deal with deceptive business practices

Their attorney general and sometimes citizens file lawsuits

Know the definition of the per se rule

There are certain things that are automatically in violation of the Clayton Act

Know the three things prohibited by rule 10b-5

To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made in the light of the circumstances under which they were made, not misleading

Antitrust law does not stop

a company from getting larger or doing more of its processes in-house

Most violations discovered by agency inspections are

cleared up informally

Know the example of what is not deceptive advertising

"Permanent" hair dye or "Danish" pastries.

Know the four elements of a security under the Howey test

1. Be an investment of money 2. In a common enterprise 3. With an expectation of profits 4. Generated by the efforts of persons other than the investors

Know the five requirements put on creditors by the Consumer Credit Protection Act (CCPA)

1. Creditors must disclose all relevant terms in credit transactions (truth in lending) 2. Procedures for correcting inaccurate and disputed bills and charges must be provided (fair credit billing) 3. Credit reporting agencies must provide accurate information in consumer reports (fair credit reporting) 4. Creditors may not use certain personal characteristics such as sex or race in determining a person's creditworthiness (equal credit opportunity) 5. Abusive debt collection technique's are prohibited (fair debt collection practices)

Know the FTC test for unfairness (it also has three elements)

1. It causes substantial harm to consumers 2. The injury is harmful in its net effects 3. Consumers cannot reasonably avoid injury

Know what right a consumer has under the Fair Credit Reporting Act

1. Respond to consumer complaints about inaccurate information within 40 days 2. Tell consumers, on request, who has asked for copies of their credit history in the past year 3. Provide a toll free consumer service number 4. Get the consumer's permission before giving a report to an employer or before releasing a report containing medical information

Know the FTC three-prong test for deception. Be able to look at examples and find the one that meets the three prongs. HINT: look for deception (lies)

1. There is a misrepresentation or omission of information in a communication to consumers 2. The deception is likely to mislead a reasonable consumer 3. The deception is material; that is, it is likely to be misleading to the detriment of the consumer

Drug companies bear the cost of developing new drugs. Know how much the average development cost of a new drug is

A billion dollars

Know what kind of standards and restrictions notattainment areas have under the Clean Air Act

A new plant's pollution must be controlled to the maximum degree possible. The plant must use the lowest achievable emissions rate (LAER) technology. LAER can be a cleaner technology than the BACT. Generally, the EPA designates the LAER as the cleanest emission technology in use by any similar plant. New plant owners must certify that any other plants they have in the area meet SIP requirements. A new plant can be built in a nonattainment area only if any increase in air pollution from the new plant is offset by reductions in the same pollutants from other emission sources in the area. That is, when the new plant is operating, the area must enjoy an overall air quality improvement.

Know what must be proven by the plaintiff to win a pollution trespass case

A nuisance requires proof that interference with property is substantial and unreasonable. In practice, nuisance and trespass are difficult to distinguish in many pollution cases.

Know what must be included in the second part of an SEC registration statement

A prospectus:

Know the definition of public nuisance in a pollution case

A public nuisance is an unreasonable interference with a right held in common by the public.

Know the definition of the rule of reason

A rule of reasonrule of reasonin antitrust law, the court considers all facts and decides whether what was done was reasonable and did not harm competition.

If you want to change wetlands in anyway what permit must you obtain

A section 404 permit

Know what the Securities Litigation Uniform Standards Act of 1998 requires

All securities litigation must be in federal court

Know who Truth in Lending applies to

Applies to any business that regularly provides credit

Know what the FTC must do to finalize a new regulation

Be published in the Federal register

Know what must be proven by the plaintif to win a pollution negligence case

Both negligence and strict liability for abnormally dangerous activities may apply in pollution cases. Tort liability may be based on negligence, which is failure to use reasonable care to prevent pollution from causing a foreseeable injury. Strict liability for abnormally dangerous activities applies to businesses that produce or emit toxic pollutants.

Know where regulatory agencies get their rulemaking powers from

Congress has authority under the commerce clause and the necessary and proper clause in the Constitution to create agencies

Know the factors that reduce punishment for corporate polluters

Cooperate with the government in investigations Voluntarily report illegal actions Educate their workforce about environmental standards Assist those who suffer from environmental wrongdoing Have a strong internal environmental compliance program

Know what the court in Black Beauty Coal Co. Federal Mine Safety and Health Review Commission decided

Court said Black Beauty Coal Co. could be fined

Know how an agency's statutory interpretation is reviewed by courts

Courts do not have to listen to agencies' interpretation of law

Know what CERCLA (the superfund statue) says about the liability for potentially responsible parties

Current owners of a hazardous waste site Prior owners of a site at the time of hazardous waste disposal Any hazardous waste generator who arranged for disposal at the site Any transporter of hazardous waste who selected the site for disposal

Be able to define the term security

Either the debt or equity of a large publicly traded company

Know the four things that must be a state implementation plan under the Clean air act

Enforceable emission limits Schedules and timetables for compliance Measures for monitoring air quality and emissions from pollution sources Adequate funding, personnel, and authority for implementing and enforcing the SIP

Know the tree statues from the textbook that are indirect control on agencies

Freedom of information act:

Know what the Fair Debt Collection Practices Act prohibits

Harassing, deceptive, and unfair debt collection practices—including threats of violence or arrest, obscene language, the publication of a list of delinquent consumers, and harassing phone calls—are prohibited. Debt collectors may not discuss the debts with other people, including the debtor's employer. The act prohibits the use of false or misleading representations in collecting a debt.

Know the holding of the Lost Tree Village Corp. v. U.S. case

Held that the government's permit denial constituted a per se regulatory taking, and that Village was owed money

Know what the Supreme Court said about non-corporate insiders who luck into inside information on securities

If someone obtains insider information through luck or coincidence, using that information is not illegal

Know what happens when the EPA determines that a pollutant is a threat to public health or the environment

If the EPA determines that a pollutant is a threat to public health or the environment, tighter control standards are to be imposed without regard to such economic factors as cost or technological feasibility.

Know the holding of Todd vs. Exxon Corp

If there is an exchange of data between companies and it is public, it is much less likely to be illegal

Know what kind of damages a company can get when its competitor makes false statements about the company in advertising

Injunctoins to get them to stop false advertising

Know the ruling of the Dow Chemical v. United states case

It was not an illegal search, Dow lost

Know the definition of a private company

Less than 500 shareholders who's securities are not sold

Know the holding if Levgin Creative Leather Products vs. PSKS

Levgin was allowed to hold it's minimum sale prices for retailers

Know what predatory pricing is

Lowering your costs to try to drive all your predators out

Know the scam where a postcard informing the recipient that they won valuable prizes results in the recipient having to pay money to get the prizes. Know what the FTC can do about it

Mailed postcards telling consumer they had won rewards they had not, the FTC has Telemarketing and Consumer Fraud and Abuse Prevention Act which allows consumers to sue and place callers on no call lists

Know what CEO's and CFO's of publicly traded companies are required to do under Sarbanes-Oxley

Make them personally sign all their financial statements that go to the SEC

Know what waters are considered to be under federal jurisdiction from the Clean Water Act

Navigable waters

Know what the court held in US Steel Corp v. Fortner Enterprises regarding a loan tied into sales of the company's products

No monopoly power used so the tie-in agreement was fine

Know the requirements for an agency to obtain evidence from public access areas against potential violators

No requirements if it's an open investigation, may need subpoena

To get a permit to dredge wetlands what requirement must you meet

Often, a permit to dredge wetlands includes a requirement that other land be restored to wetland status in exchange.

Know the holding of Decker v. Northwest Environmental Defnse Center

Oregon already has plenty of environmental regulations

Know what the supreme court said about price fixing ins US v. Trenton properties

Price fixing is a per se violation

Know SEC rule 10b-5

Prohibits any manipulative or deceptive device in fraud

Know the two ways agencies enforce regulations

Regulated businesses are required to self-report, direct observation determines is a business is following the law. and subpoena.

Know what Truth in Lending requires

Requires creditors in consumers transactions to disclose basic information about the cost and terms of credit to the consumer-borrower

Know the remedies available for antitrust lawsuits

Restrain a company or individuals from certain conduct Force a company to sell part of its assets (break up the company) Force a company to let others use its patents or facilities (licensing) Cancel or modify existing business contracts

Know what enabling legislation created the Public Company Accounting Oversight Board

Sarbanes-Oxley

Know what the court said in the Smallen v. Western Union Co. case said about the intent needed to show a company committed securities fraud

Scienter (criminal intent): Smallen was unable to prove Western Union had any scienter so he lost

Know the holding from Spartan Concrete Products, LLC v. Argos USVI Corp.

Spartan lost because they couldn't prove the anti competitive behavior actually affected their business

Know the holding of Massachusetts v. Environmental Protection Agency regarding the EPA's ability to regulate greenhouse gases

The EPA has authority to regulate greenhouse gases

Know the name of the statute that prohibits discrimination in credit

The Equal Credit Opportunity Act (ECOA)

Know what the court ruled in FTC v. Consumer Defense, LLC

The FTC had provided enough evidence to shut down Consumer Defense

Know which statute gives you the right to see your credit report for free once a year

The Fair and Accurate Credit Transaction Act (FACT Act)

Know the final determination of the Fish and Wildlife Service's actions in M. Farm and Livestock Bureau v. Dept. of Interior

The Fish and Wildlife associations rules were arbitrary and capricious

Know what SEC can and cannot do when reviewing a registratoin statement

The SEC issues a deficiency letter, the issuer needs extra to to amend the filing to provide more detail in the registration materials

Know what law the government used to break up the standard oil trust

The Sherman Act

Know what Lujan v. Defenders of Wildlife Court held about an environment group's concern about crocodiles in Egypt

The court said hey have no standing so the case was dismissed

Know the definition of agency procedural rules

The details of the agency's structure and it s explanation of its method of operations and internal practices are covered in procedural rules

Know the obective of the Clean Water Act

The objective of the Clean Water Act is to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters."

Know what theWhalen v. Union Bag & Paper Co. court said about weighign the plaintiff's small damages against the defendant's large costs

The polluter must pay damages and stop pollution or cease operation

Know how the supreme court used the rule of reason to determine that BMI and ASCAP setting blanket licensing fees for music is allowed

There is no other way for the market to work so it is not illegal

Know the holding of Sierra Club v. United States DOI

There were no jaguars so the court denied SIerra's position

Know what an administrative law judge

They are an agency employee

Know what the court in US vs. Baker Hughes let the merger go forward

They assumed the merger would still be unable to charge monopoly prices for its rigs

Know the court's holding regarding standing in Summers v. Earth island institute

They found he had no standing and reversed the appeals court's ruling

Know the standards for courts reviewing informal agency procedures

They generally just make the agency is following their rules and being fair

Know what the Taylor v. Huerta Case said about agency actions that go beyond their authority from their enabling legislation

They went beyond their authority and therefore have no effect

Know what the primary intention of the Clayton Act is

To stop mergers and acquisitions from becoming monopolies

Know the term for the entity that is hired to market new securities

Underwriter

Know the purpose of the disclosure provisions in federal securities law

We want clear, transparent, and accurate information to investors

Know what a horizontal restraint of a trade is

When companies are the same level and do the same thing either merge together or make a deal to be anticompetitive

Know what a business does if it does not agree with the outcome of an agency's adjudicatory hearing

You appeal it to the director of the agency

Know the examples of securities laws misleading information

overly optimistic statement by executives can cause expectations of higher profits, leading investors to bid up the price of the stock

Know what a credit reporting company must do when a consumer notifies it of an error on their credit report

the information must be deleted or changed or a statement from the consumer about the problem must be put in the file.