April 3 2006, 23:51
Spring is a time for getting rid of things that are outdated, have served their purpose or are just plain wrong. However, sometimes when companies do a little spring cleaning they can get in a lot of trouble. Obstruction of justice is a serious crime and one that the government has pursued vigorously in recent years. One such case started five years ago when the SEC began an investigation of Credit Suisse First Boston (CSFB) which led to charges of obstruction of justice against CSFB investment banker Frank Quattrone.  Last year a jury found Quattrone guilty of the charges and he was sentenced to 18 months in prison.  However, on March 20, 2006 the 2nd Circuit did a little spring cleaning of its own by vacating the verdict.  Now the question is whether the government will let this case stay in the trash or if they will drag it back to court for the third time. [More]
March 29 2006, 23:47
On April 1st the Federal Deposit Insurance Corporation (“FDIC”) will
increase its deposit insurance coverage of retirement accounts from
$100,000 to $250,000.  This change represents the first boost to
coverage in over twenty-five years.  Despite coverage for
non-retirement accounts staying at the current level of $100,000, the
increase in coverage for retirement accounts will be beneficial to
consumers and banks alike. 
last increase in deposit insurance coverage took place in 1980 when it
was raised from $40,000 to $100,000.  However, many Americans now
have much more than $100,000 in retirement savings.  This meant
they were forced to bank at multiple institutions in order to have all
of their retirement funds insured.  Under the new law, individuals
will be able to have up to $250,000 in retirement funds at one bank.
 This will make banking easier for consumers and increase profits
Despite the caps, it is still possible to have all of one’s funds at
a single institution and have them insured as retirement and
non-retirement accounts are treated differently for insurance purposes.
 Retirement accounts, no matter which type, are added together and
the total is insured up to $250,000.  Non-retirement accounts are
not totaled, rather each category of account is insured separately up
to $100,000.  For instance an individual may have a checking
account, a joint account with their spouse, a retirement account, and
trust account benefiting their spouse and child. The checking account
will be insured up to $100,000. The joint account will be divided in
half and each half treated separately.  This means that a couple
may have up to $200,000 in a joint account and it will still be insured
as each spouse’s $100,000 share is insured separately.  As noted
above retirement accounts will now be insured up to $250,000. 
Trust accounts receive up to $100,000 of insurance protection per
beneficiary, not depositor.  Thus an individual could have a
$200,000 trust naming his wife and child as beneficiaries and the full
$200,000 would be insured.  Under this system one could have
$650,000 (or more if the trust has more than two beneficiaries)
deposited at one institution and still have their funds insured by the
While the increase in coverage for retirement accounts has been
welcomed, some feel that the FDIC should have also raised its coverage
for regular accounts as the insurance cap of $100,000 does not account
for the inflation of the past twenty-six years.  To keep place
with inflation it is claimed that coverage on regular accounts should
be raised to $235,000 or at least doubled.  Additionally, the
$100,000 insurance cap favors large banks over small ones as consumers
are more willing to trust major banks with accounts that exceed the
insurance cap and leave some funds uninsured. 
While it is not a panacea, the increase in FDIC deposit insurance
coverage for retirement accounts is a change that should be welcomed by
all Americans. Consumers will now be able to have fewer accounts
resulting in fewer hassles and fewer bank fees, while banks will be
able to handle the entire retirement savings of individuals rather than
only receiving a share.
 Laura Bruce, Deposit Insurance Reform: What it Means to Consumers, Yahoo, March 16, 2006, http://biz.yahoo.com/brn/060316/18251.html?.v=1
 PR-29-2006, FDIC Insurance for Retirement Accounts Increased
to $250,000 Higher Coverage Takes Effect April 1; Basic Insurance Limit
for Other Accounts Stays at $100,000, March 14, 2006, http://www.fdic.gov/news//news/press/2006/pr06029.html
 Bruce, Supra, Note 1.
 FDIC Consumer News, Special Bulletin April 2006, What You Should Know About Higher FDIC Coverage for Retirement Accounts, http://www.fdic.gov/consumers/consumer/news/special/specialApril06.pdf
 Bruce, Supra, Note 1.
March 18 2006, 02:24
The Supreme Court heard arguments on March 1st concerning the constitutionality of an Ohio investment tax credit offered to the DaimlerChrysler Corporation. The credit, entitling DaimlerChrysler to a "ten-year 100 percent property tax exemption, as well as an investment tax credit of 13.5% against state corporate franchise tax for certain qualifying investments," is meant to encourage a $1.2 billion Jeep plant project in Toledo. The investment tax credit is being attacked on the grounds that, as a state action, it unconstitutionally burdens interstate commerce in violation of the Commerce Clause. This sort of tax incentive is hardly anomalous; indeed, 49 states offer similar tax incentives for the purpose of encouraging in-state economic activity, thereby benefiting the citizens of the state. Given that attracting valuable in-state commercial growth is a fixture of policy in most states, a ruling consistent with the claim of unconstitutionality from the nation's highest Court could have substantial repercussions. [More]
March 16 2006, 01:23
On February 23, 2006, the International Labor Organization adopted the Maritime Labor Convention. The convention is an attempt to consolidate all existing maritime labor regimes and to provide a comprehensive rights based charter for maritime employees. The United States participated in the conference in the hopes that by passing this convention more economic benefits may flow to the American maritime industry. The convention may provide a basis for American employees to maintain and enhance traditional rights such as maintenance and cure. [More]
March 14 2006, 00:15
While bankruptcy judges are obliged to apply and uphold the rule of law as specifically set out by Congress, some have chosen to publicly air their misgivings about the lack of discretion left to judges to administer bankruptcy cases by the 2005 amendments to the Code. A recent order by Judge Monroe of the Western District of Texas has gained widespread attention for its scathing attack on the credit counseling requirement.  It remains to be seen whether bankruptcy judges and practitioners will be able to prompt review of this provision, but the frustration evident in Judge Monroe's decision has sent Congress a clear message. [More]
March 6 2006, 23:54
March 7, 2006 will mark the end of a 213 year old tradition, but it will also be the start of new era. If all goes according to schedule, tomorrow the New York Stock Exchange (NYSE) will complete a merger with Archipelago Holdings Inc. (Arca).  The merger will create a new publicly held corporation, NYSE Group Inc. (stock symbol: NYX) making the NYSE a for-profit public company.  The merger has been a long time in the making and is not only significant for the Big Board, but is also a major milestone in the corporate world as once again new standards have been set.  The transaction will give the NYSE, already the world’s biggest exchange, high tech trading capabilities and 49% of the stock trading market.  [More]
March 2 2006, 15:57
Because of the high-cost of real estate in the most desirable areas of the United States, especially southern California, many Americans are searching for a cheaper, less crowded alternative both for vacation homes and for primary residences. With thousands of miles of undeveloped coastline, and beachfront property costs at a fraction of those in the United States, Mexico has recently become a hot market for Americans wanting a laid-back atmosphere and an affordable vacation home with warm weather throughout the year. Though Mexico is the perfect place to build an affordable beachfront home, there is one slight problem for foreigners wishing to re-locate there: Article 27 of the Mexican Constitution prohibits ownership of beachfront property by foreigners and foreign corporations. Only persons born in Mexico or corporations established in Mexico can gain title to property within Mexico's "Restricted Zone." 
How do Americans get around this prohibition? The answer is rather complex. [More]
March 1 2006, 23:45
Despite the invalidation of communications excise tax, I.R.C. §
4251, by numerous federal courts the IRS is demanding that collection
of the tax continue.  The three percent communications excise tax
was originally imposed in 1898 as a temporary luxury tax to help fund
the Spanish-American war.  The tax applies to a number of
communications services among which is long-distance or “toll
telephone” service and is paid by everyone, both individuals and
businesses, who makes long-distance calls. 
purposes of the communications excise tax, the IRS defines toll
telephone service as “a telephonic quality communication for which . .
.there is a toll charge which varies in amount with the distance and
elapsed transmission time of each individual communication.” (emphasis
added)  The IRS contends that the word “and” in the statute should
be read as “either,” while those fighting the tax contend that “and”
should be read naturally as a conjunctive requiring that the toll
charge vary according to both distance and time.  Since the tax was
first enacted, the billing of long distance service has changed
significantly. Many individuals and business now pay a monthly flat fee
for long distance service rather than paying a rate based on the
distance of the call and its length.  Nevertheless, the IRS has
continued to enforce the tax. For most individuals the amount of tax
paid is very small, but for businesses, it can be a significant amount
of money. 
A number of businesses have filed suit demanding that the IRS stop
collecting the tax and refund monies already paid. The IRS has lost
every time. In two cases, the court granted summary judgment finding
the IRS’ argument of reading “and” as “either” lacked merit. , 
The potential loss of revenue to the government is significant. If the
tax is repealed the government will need to refund three years of
payments.  By the IRS’ estimation this could result is a nine
billion dollar refund to individuals and businesses. 
Due to the amount of money at stake the IRS is asking that
collection of the tax continue and will not process refund claims while
litigation continues.  The IRS declined to seek review by the
Supreme Court after losing in the 11th Circuit and will soon be facing
a class action suit seeking to stop collection of the tax and force the
IRS to issue refunds to taxpayers who not requested a refund. ,
 It is doubtful that the IRS will capitulate and cease enforcing
the tax. As long it is cost effective to fight the suits, the IRS will
no doubt keep collecting the tax and pay-off those who sue. However,
the upcoming class action may force the IRS to amend the code to
reflect the new realities of long-distance billing. Either way this
“temporary” tax to fund a war that ended over a hundred years ago will
be with us for the foreseeable future.
 I.R.S. Notice 2005-79 (Nov. 14, 2005).
 Officemax, Inc. v. U.S., 428 F.3d 583, 585 (6th Cir. 2005).
 I.R.C. § 4251(b)(1) (2006).
 I.R.C. § 4252(b)(1) (2006).
 Officemax, 428 F.3d at 584.
 Mary Dalrymple, Merchants Fight IRS Over Telephone Taxes, Yahoo, Feb. 19, 2006, http://news.yahoo.com/s/ap/20060219/ap_on_bi_ge/telephone_taxes_1.
 Fortis, Inc. v. U.S., No. 03 Civ. 5137 (JGK), 2005 U.S. Dist. LEXIS 2104 (S.D.N.Y. 2005).
 Officemax, 428 F.3d at 600.
 Dalrymple, supra, note 6.
 Officemax, 428 F.3d at 584.
 I.R.S., supra, note 1.
 American Bankers Ins. Group v. U.S., 408 F.3d 1328 (11th Cir. 2005).
 Dalrymple, supra, note 6.
February 25 2006, 02:26
Surprise! In 2005, Big Oil again turned one of the larger profits it has seen in recent years, with companies like Exxon Mobil boasting fourth quarter numbers 27% greater than last year's profits (which, by the way, were nothing to sneeze at). And why shouldn't we be surprised? After more than a year of paying a sky-high premium at the pump and in the home, it is plain to see that the oil industry is not sharing the burden of the high price of fuel with the consumer. Led by Senate Democrats, a bill has been proposed to impose a one-time-only $5 billion windfall tax on big oil to help offset the country's more than $300 billion deficit. [More]
February 23 2006, 01:54
A meeting at the UNEP headquarters in Nairobi, Kenya is focusing on the global trend to include more stakeholders in the corporate governance structure. The aim of this meeting is to promote links between environment sustainability, trade unions, and corporations. These trends are being followed in the U.S. as evidenced by the Securities and Exchange Commission proposal to allow large shareholders a direct voice in the nomination of board of directors. [More]