The Regulatory Appetite for Cryptocurrency in the United States

Countries around the world are being forced to decide what role, if any, cryptocurrencies and initial coin offerings (“ICOs”) will play in their financial markets. The United States is no exception, as investors and leaders in the crypto industry continue to push for as little regulation as possible. But given the long, slow nature of the regulation process, many of these investors and crypto leaders are anxious to see some form of clear and uniform cryptocurrency regulations (Adrian Zmudzinski, Cointelegraph). To make matters worse, the partial shutdown of the federal government further delayed the process, particularly as it relates to agencies such as the Securities and Exchange Commission (SEC) (John Nancarrow, Bloomberg Law).

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Is Political Endorsement Considered Good Corporate Governance Practice? Patagonia Says 'Yes.'

Is political endorsement considered good corporate governance practice? Patagonia says yes.

Shortly before the November 6, 2018 midterm election, Patagonia publicly endorsed two Democratic senatorial candidates, Jon Tester from Montana and Jacky Rosen from Nevada, what appears to be a first for any corporation. Patagonia stated that it endorsed the candidates because of their commitment to public lands and waters. (Dino Grandoni, Power Post). Both Tester and Rosen were victorious in the midterm elections.

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With $34-Billion Purchase of Red Hat, Grounded Tech Giant IBM Looks Towards a Future in the Cloud

International Business Machines Corporation (“IBM”) announced on October 28th of 2018 its plans to acquire American software company Red Hat, Inc. (“Red Hat”) for $34 billion. (Liana B. Baker and Greg Roumeliotis, Reuters). The deal, which is the software industry’s largest-ever acquisition, is expected to close in the latter half of 2019. Id. IBM is set to pay $190 per Red Hat share — a 63% premium on Red Hat’s closing share price on October 26, 2018. Id. IBM intends to maintain Red Hat’s headquarters, facilities, brands, and practices, as well as retain Red Hat’s management team and Chief Executive Officer Jim Whitehurst after the deal has closed. Id. This post provides an overview of the two companies, the deal, and its anticipated effects.

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SEC settlement of Elan Musk Approved by Judge

A settlement agreement has been reached regarding the SEC Investigation of Elon Musk and his infamous Tweet stating that he was taking Tesla private. The tweet created an array of problems for the company since its publication. Under the settlement agreement, both Tesla and Musk will each pay a $20 million dollar fine and Musk will resign as Tesla’s Chairman for three years in order to resolve other pending charges arising from this incident. (Munsif Vengattil, Business Insider). The $20 million dollar fine assessed to Tesla was not for fraud, however, but rather, for the company’s failure to have any procedures or disclosure controls over Musk’s communication practices, i.e. his Twitter account. (Kirsten Korosec, TechCrunch). As a result of Musk’s resignation, Tesla will have to appoint two new independent directors to its board. (SEC Press Release). Nevertheless, despite the settlement agreement and the backlash that ensued over his Tweet, Musk will remain as Tesla’s Chief Executive Officer and more importantly, he will not have to admit or deny the allegations of the lawsuit.

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SEC Adopts Obama-Era Mining Disclosures

On October 31, 2018 the SEC adopted new mining disclosure requirements that were originally proposed under the Obama Administration. (Andrew Ramonas, Bloomberg Law). According to an agency press release, the amendments, which modify both the Securities Act of 1933 (Securities Act) and the Securities Exchange Act of 1934 (Exchange Act), will “provide investors with a more comprehensive understanding of a registrant’s mining properties, which should help them make more informed investment decisions.” (SEC, Press Release). The new rules eliminate and update Industry Guide 7, the current set of rules that have been called “woefully out of date.” (Anderson, Brenkert, and Doerksen, Dorsey & Whitney LLP).

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Best Buy's Acquisition of Health Tech Startup Jitterbug May Trigger HSR Concerns

On August 15, 2018, Best Buy Co., Inc. (Best Buy) announced that it signed a definitive agreement to acquire GreatCall Inc. (“GreatCall”) for $800 million as part of its growing business selling health and wellness products specifically focused on the aging population. (Investor Relations, Best Buy). GreatCall is the maker of the senior focused Jitterbug cell phones along with other devices designed to allow elderly consumers to connect with caregivers and to facilitate communication with emergency services. (Barba, Wall Street Journal). The acquisition is projected to be neutral to Best Buy’s adjusted earnings in 2019 and 2020 as well as to increase its adjusted earnings by 2021. (Investor Relations, Best Buy). The acquisition is part of Best Buy’s 2020 strategy to use technology to address key human needs among the aging U.S. population. (Barba, Wall Street Journal). GreatCall headquarters will remain in San Diego and David Inns will remain as the company’s CEO. (Press Release, Market Watch).

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