Archive for March, 2010

Forwarder of Allegedly Defamatory Email Found Not Liable For Defamation

Thursday, March 25th, 2010

In the California appeals court case Hung Tan Phan v. Lang Van Pham, the court ruled that Communications Decency Act (“CDA”) Section 230 immunity is applicable to forwarder of defamatory email with added content, provided that the added content itself is not defamatory. For background, CDA Section 230 shields providers and users of interactive computer services from claims that seek to treat them as publishers or speakers of information provided by another information content provider. In this case, the court raised the issue of whether, by including an introduction to the allegedly defamatory email — the forwarder was considered to have “materially contributed to the illegality of the Internet message” and hence lost his CDA Section 230 immunity and be liable for defamation. The court concluded that the defendant did not materially contribute to the alleged defamation because his introductory comments were not defamatory, and therefore he is still protected under CDA Section 230.

Congress May Require Brokers To Act as Fiduciaries in 2010

Friday, March 12th, 2010

An often overlooked feature of the Senate Financial Reform Bill proposed by Senator Christopher Dodd would require insurance and stock brokers to register as advisers with the SEC.  This means that brokers would be subjected to the Investment Advisers Act of 1940, requiring them to act as fiduciaries to their clients.   Acting as a fiduciary for a client would mean putting that clients’ interests first, as registered investment advisers are legally required to do.  Brokers generally are held to a “suitability” standard, meaning recommendations must be suitable to the client but do not have to be the best for them.  Under the suitable standard brokers are free to pick the fund that pays them the biggest commission from among a group of suitable funds.  A fiduciary standard also would require brokers to prominently disclose any conflicts of interest.   Should the bill pass, this new fiduciary standard would also provide additional protections to investors in the sale of variable annuities, a product that often comes with high costs but pays above-average commissions to sellers, as brokers would have to show that it is the best of all available products.  If you or your company needs assistance or guidance concerning a securities dispute or a securities fraud matter, do not hesitate to contact Ignatius Grande at Di Santo LLP.

FINRA Announces “Same Day Clearance” for Shelf Offerings

Wednesday, March 10th, 2010

As of March 1, 2010, underwriters of accelerated shelf offerings that are not otherwise exempt from filing under FINRA’s Corporate Financing Rule (i.e., Rule 5110) may obtain Same Day Clearance of their filings with FINRA if specific representations are made regarding their accelerated shelf offerings. The objective of this Same Day Clearance option is to alleviate delays associated with FINRA clearance for accelerated offerings.

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