Securities Law in Crypto: It’s Everywhere! It’s Everywhere!

Joseph R. Soraghan

By Joseph R. Soraghan



cryptocurrencySuppose you have become a believer in crypto, crypto currencies, blockchain technology and crypto concepts such as non-fungible tokens (“NFTs”). You believe that crypto-based assets (existing now and probably soon to be invented) present opportunities for profitable new businesses. But what do these opportunities look like under the Securities and Exchange Commission (“SEC”) laws?

Opportunity #1: Sell some of your NFTs and manage them for the new owners.

You decide to sell some of your assets to friends and others who are not as knowledgeable in crypto and offer to manage those NFTs for your purchasers.

But your reading of crypto literature has turned up concerning mentions by the SEC that cryptocurrency and crypto-assets are “securities,” like stocks and bonds, and are – or will be – regulated by the securities laws. And some state securities commissions are also making similarly uncertain statements.

Your further research shows that the statutes and the courts define a “security” to be any interest, contract, or transaction involving:

  • An investment of money or valuable property,
  • In a common enterprise,
  • With the expectation that profits will be derived from the efforts of the promoter/seller of the interest or a third party(s).

I.e., the Howey test, named after the Supreme Court case of SEC v. Howey.

The dominant factor in this definition is that of profits expected to be generated by the efforts of persons other than the purchaser/holder of the interest. You realize that your offer to manage the NFTs calls for your efforts to generate profits and may call the Howey definition into play. (We will perhaps discuss the equally uncertain concept of “common enterprise” in a later discussion.)

Opportunity #2: Manage a pool of NFTs. Continue reading »

Clicking Towards Disaster: The Cost of ADA Non-Compliant Websites

Lauren L. Wood

By Lauren L. Wood



website accessibilityIn today’s world, businesses increasingly rely on the internet, making websites invaluable tools for reaching and expanding a customer base. If you have an interactive website on which you conduct transactions with consumers, it must be accessible by anyone, including those with a hearing or vision impairment. A website that doesn’t adequately support the user experience (“UX”) for those with such impairments creates obstacles to its use and creates potential liability.

Unfortunately, the first notice a company receives about website accessibility issues may come via a lawsuit. Often filed in Federal Courts of states other than the company’s home state (New York and California being the most common), complaints alleging a company’s website is inaccessible or unusable by someone with a particular disability are proliferating. Discrimination in public accommodations is prohibited under Title III of the Americans with Disabilities Act (ADA). Federal Courts are split on whether stand-alone websites (i.e., where the owner of the website does not operate a store, restaurant, hotel, or other physical location) are places of public accommodation to which Title III’s accessibility standards apply.

Most companies would appreciate being notified of website deficiencies preventing a user from utilizing their site and be given the opportunity to correct any accessibility issues. Once a lawsuit is filed, it may be too late to prevent lengthy, expensive litigation over the issue, short of settling. Plaintiffs seek injunctive relief plus attorney’s fees, which may skyrocket if the case is not settled expeditiously. They often also seek compensatory damage awards with state anti-discrimination claims. While these lawsuits are multiplying, the law in this area is still developing , leading to difficulties obtaining a swift resolution as the interpretation of the law evolves, and often splits, among circuits.

Most of these lawsuits are filed by a handful of plaintiffs represented by a handful of law firms alleging that a website does not comply with Web Content Accessibility Guidelines (WCAG). While the exact criteria required to avoid running afoul of the ADA has not been determined, the WCAG addresses accessibility issues such as contrast for those with difficulties differentiating colors, subtitles, or compatibility with screen reader software for those with vision impairment.

So, what should you do? Continue reading »

Do You Own Cryptocurrency? Update Your Estate Plan!

Rachel A. Quinley

By Rachel A. Quinley



cryptocurrencyCryptocurrency is a hot topic for business owners and individuals alike. But have you considered the importance of updating your estate plan to include your cryptocurrency? If not, read If You Own Cryptocurrency, It’s Time to Update Your Estate Plan! where I discuss the importance of updating your estate plan if you own any cryptocurrency or other digital assets.

Cryptocurrency and other digital assets were not considered in many older estate plans. And with the increase in the number of business owners and individuals acquiring cryptocurrency and other digital assets, estate planning is crucial. Your estate plan documents need to include language that covers your digital assets, just as it covers your more traditional assets. Continue reading »

Happy 6th Anniversary, GDPR!

Corporate Law Practice Group

By Corporate Law Practice Group



gdprAs a business owner, you’ve heard a lot about the European Union’s General Data Protection Regulation (GDPR). April 16, 2022, marks the six year anniversary of its enactment. It has become a model for data privacy laws around the globe.

GDPR applies to any entity anywhere that processes personal data of individuals located in the European Economic Area (EEA). Non-European companies, including those in the U.S., must also comply with its stringent requirements.

By contrast, the U.S. has no national data privacy statute. Data privacy in the U.S. is governed by a patchwork of federal statutes and regulations (e.g.,  HIPAA) and state laws (e.g., the California Consumer Privacy Act). Additionally, every state has its own data breach notification law. The result is that when a business with customers in the U.S. experiences a data breach, it has to determine its obligations in multiple jurisdictions. An online retailer has to identify its obligations under the myriad laws of all 50 states plus Washington, D.C., Guam, Puerto Rico, and the Virgin Islands.

Different states’ data breach notifications laws contain similar features, but there are numerous variations. Common requirements include notifications to affected individuals, state attorney general offices, and credit reporting agencies. However, the timing, content, and method of these notifications varies from state to state. Some states, including Missouri, require notice to affected individuals “as expeditiously as possible.” Other states set a hard deadline, such as Alabama’s 45-day rule. Indiana allows business to notify their customers via email; Illinois does not (without prior customer consent). North Carolina requires notice to the Attorney General’s Office if a breach affects even one person, but Arizona only requires notification if at least 1,000 Arizonans are affected.

Even the definitions of “personally identifiable information” and “breach” are not universal. To make things more difficult, states frequently update their statutes. In 2021 alone, at least 22 states introduced or considered measures to amend existing security breach laws. Continue reading »

Getting Through Chapter 11 – Part Two: Plan of Reorganization

A. Thomas DeWoskin

By A. Thomas DeWoskin



turbulencePart 5.2 of a 5-part series: Options for Small Business Owners in Financial Distress

Your company’s Chapter 11 bankruptcy has been filed and you’re now running your business under the provisions of the United States Bankruptcy Code.

It’s now time to work toward the ultimate goal of a Chapter 11: a Plan of Reorganization, confirmed by the court, allowing your company to restructure its debts, exit Chapter 11, and continue in business. It is important that you explain all of your concerns about all aspects of your business to your attorney and provide complete and accurate information, all before you even file the case. This will help both of you develop good ideas for successfully navigating your reorganization case and getting a plan confirmed. Advise your attorney if a new problem develops so you can consider all the potential solutions available to you.

Your next steps in planning for reorganization will include you and your attorney:

  • Participating in two mandatory meetings with a U.S. bankruptcy trustee within the first 30 days after filing and begin filing monthly operating reports.
    1. “Initial debtor interview:” Learn procedural issues such as the ins and outs of filing periodic operating reports such as monthly operating reports and where and how your company can bank.
    2. Section 341 “meeting of creditors:” Be questioned under oath by the U.S. trustee’s office about your need to file Chapter 11, your plan to exit bankruptcy, how you will implement your ideas, etc. This meeting is open to all interested parties.
  • Negotiating the terms of your proposed plan with the creditors’ committee if one has been formed by large unsecured creditors.
  • Negotiating lease terms. Any lease which commenced prior to the filing can be “rejected.” You can then renegotiate the terms or terminate the lease, in which case the lessor’s claim will be treated as a pre-petition claim.
  • Treating an equipment lease as an installment purchase agreement secured by the equipment, possibly converting a portion of the secured debt to unsecured and altering the terms of repaying the secured debt.

Continue reading »

Business Beware: You Can’t Take Deceptive Steps to Manipulate the Collection or Publishing of Negative Reviews on Your Website

Ruth Binger

By Ruth Binger



customer reviewsBusinesses are to avoid potentially deceptive conduct that would confuse consumers under Section 5 of the Federal Trade Commission Act, and the FTC is now focusing very heavily on deceptive customer reviews and endorsements. Deceptive conduct includes any conduct which treats positive and negative reviews unequally, thus misleading consumers of useful information and inflating the product’s star rating.

In one of its first cases, the FTC pursued Fashion Nova, LLC, a fast fashion retailer that attempted to conceal negative reviews. According to the complaint, “Fashion Nova used a third- party online product review management interface to post four- and five-star reviews and hold off on lower star reviews [estimated in the hundreds of thousands] for the company’s approval.” Fashion Nova never approved or posted the lower star reviews. In its settlement with the FTC, Fashion Nova is prohibited from suppressing customer reviews of its products and is required to pay $4.2 million to settle the FTC’s allegations.

What does this mean for businesses that use or consult regarding consumer reviews?

  • Don’t manipulate reviews by hiding/revising/displaying differently bad reviews, encourage people not to leave bad reviews, or pay people to give only good reviews.
  • If you pay people for good reviews, whether in your company or not, the relationship should be clearly and conspicuously disclosed.
  • Moderate what your customers are telling you in the reviews and have reasonable processes in place to spot fake or suspicious reviews after publication.

Remember, even if you hire a platform to manage your customer reviews, your business is still liable, just like Fashion Nova.

Posted by Attorney Ruth Binger. Binger serves both emerging and mature businesses concentrating in corporate law, intellectual property and technology law, cybersecurity, digital media law, and labor and employment law. Her commitment to the success of small to medium-sized businesses, and her understanding of multi-faceted issues inherent in operations, are what distinguish Binger’s practice. 

(c) Esermulis www.fotosearch.com

Getting Through Chapter 11 – Part One: After Filing

A. Thomas DeWoskin

By A. Thomas DeWoskin



Part 5.1 of a 5-part series: Options for Small Business Owners in Financial Distress

turbulenceYour attorney has just filed your company’s Chapter 11 reorganization case and you have no clue what to do next. Seriously, the first thing you should do is nothing. Take a breath and keep running your business.

That’s not to say there’s nothing for you to do during the entire Chapter 11 process – there’s actually quite a lot for which you will be responsible. Any competent bankruptcy attorney already has discussed your statutory and practical responsibilities in a Chapter 11 case with you prior to filing.

Now is the time to implement those decisions made before the case was filed. If you forget a decision you made (or come across an issue you hadn’t discussed), call your attorney. The two of you should be in frequent contact during the case to be sure that you don’t take any actions which don’t make sense in the Chapter 11 context, or which might violate the Bankruptcy Code, Bankruptcy Rules, or Local Rules.

Your primary concern after the case is filed is, of course, money to operate with. That topic should be discussed thoroughly with your attorney prior to filing. Be sure your attorney discusses post-petition financing and use of ‘cash collateral’ with you. Be sure that you have post-petition financing lined up before you file, either from internal operations or from a lender. If your post-petition financing falls through, or you’re not as profitable as you expected to be after filing, you may not be able to afford to operate during the Chapter 11. If so, there is  no way for you to reorganize and your Chapter 11 case may be dismissed outright. Continue reading »

Will College Athletes Be Considered Employees?

Ruth Binger

By Ruth Binger



Authored by Attorney Ruth Binger and with assistance from Haley E. Gassel, contributorsports

College athletes generate billions of dollars in revenue for their colleges and universities. As athletes are realizing their value to college sports, they have increasingly engaged in collective action and sued to be considered employees. A recent memorandum by General Counsel of the National Labor Relations Board (NLRB) puts this issue on the forefront, indicating that the NLRB is classifying college athletes at academic institutions as employees under the National Labor Relations Act (NLRA).

In National Collegiate Athletic Association v. Alston, the Supreme Court held that the NCAA’s restrictions on student athletes being compensated fell within antitrust scrutiny. The unanimous court ruled unanimously that the NCAA cannot prevent athletes from receiving education-related benefits, such as scholarships for graduate or vocational school, payments for academic tutoring, or paid post eligibility internships. The Supreme Court has recognized that college athletes are not amateurs, and they contribute to a profit-making enterprise. Additionally, in Johnson v. NCAA, a federal judge in Pennsylvania held that a group of student athletes plausibly alleged that they were employees of their colleges and universities and allowed their action against their colleges and universities under the Fair Labor Standards Act to proceed. Overall, courts are signaling a willingness to consider arguments that student athletes should be classified as employees. Continue reading »

Over the Counter COVID-19 Diagnostic Tests Are Required to Be Reimbursed by Your Health Care Plan

Ruth Binger

By Ruth Binger



covid testOn December 2, 2021, President Biden announced that the Departments of Labor, Treasury, and Human Resources (“Departments”) would issue guidance by January 15, 2022, to clarify that individuals who purchase Over The Counter COVID-19 Diagnostic tests (“OTC Tests”) during the public health emergency will be able to seek reimbursement from their group health plans or health insurance plans insurers (Collectively “Plans”).

On January 10, 2022, the Departments updated their guidance to generally require coverage of OTC tests, with or without a prescription or individualized clinical assessment by an attending health care provider. The Plan cannot impose cost-sharing requirements, prior authorization, or other medical management requirements.  The test needs to be for Plan participant’s personal use or for a family member enrolled under the Plan.

How to Purchase? Continue reading »

Can Real Estate Property Lost Due to Unpaid Taxes Be Recovered Through Bankruptcy?

A. Thomas DeWoskin

By A. Thomas DeWoskin



home saleEvery state has a statute authorizing the counties within it to foreclose on or sell real estate which has delinquent taxes owed on the property. In Missouri, for instance, counties are allowed to conduct sales of such properties once the real estate taxes have been delinquent for three years. The exact procedure may vary from county to county.

The purchaser at a tax sale will likely pay much less than the property is worth. If the previous owner should file a bankruptcy case, can the bankruptcy court set aside the sale as “fraudulent,” in the sense that the property was transferred from the owner for less than the true value of the property?

In 1994, in BFP v. Resolution Trust, 511 U.S. 531, the U.S. Supreme Court ruled that properly conducted mortgage or Deed of Trust foreclosures cannot be fraudulent transfers because, although it is very rare for a foreclosure sale price to be anywhere close to a market price, notice of the sale is published and members of the public can attend the sale and purchase the property if they care to.

However, the fraudulent transfer question is much closer if the transfer is by tax sale. The notice of the sale is narrower than even a mortgage foreclosure, and the chances of the property selling for a fair value is even less.

So, can a sale or foreclosure for delinquent taxes be set aside as constructively fraudulent? This question has given rise to a split among the Circuits. The Sixth Circuit, in the recent case of Lowry v. Southfield Neighborhood Revitalization Initiative (In re Lowry), 20-1712 (6th Cir. Dec. 27, 2021), found that the BFP reasoning did not apply to tax sales. This brought the circuit split even, with three circuits (the Fifth, Ninth and Tenth) finding that BFP does apply to tax sales and three circuits (the Third, Sixth and Seventh), holding that it does not.

The Bottom Line: Continue reading »

Skip to content