Final Review Flashcards
Rule of Law
a. Concept that laws that are made are generally and equally applicable
b. Idea that the law applies to EVERYONE in the same way
c. Almost all wealthy countries embrace the Rule of Law
What are the consequences of not having Rule of Law?
People will be sacred in invest and run a business which development will be stunted
Principles that define the rule of law according to the World Justice Project
i. Accountability
1. Even for people upholding the law (police, judges)
ii. Clear, Publicized, Stable, and Just Laws
iii. Process by which laws are enacted, administrated, and enforced is accessible, fair, and efficient
iv. Justice that is delivered timely
Common Law
- Emphasizes the role of judges in determining the meaning of laws and they apply.
- US follows the Common Law except: Lousina
Pros:
a. Laws can be concise
b. Stare decisis
i. Definition: Let the prior decision stand
ii. Judges follow precedents whenever possible
iii. Ensures certainty , stability, and predictability in the law
Cons:
a. Volume of Cases
b. Conflicting precedents
c. Distinction between the holding and dicta
i. Increases the difficulty of determining the precedent
d. Rejection of precedent/Bad precedent (belief cases were wrongly decided or times have changed)
Civil Law
- Relies more on legislation than judicial decisions to determine what the law is
- Civil Law Courts (Judges) do NOT make law and DON’T feel obligated to follow prior judicial decisions
Public Law
Governs how the public interacts with public
Includes Constitutional law, administrative law, and Criminal Law
Private Law
- Regulation of Private resources
Includes Property law, contract law and Tort law (form where a person has ex: negaliance)
Sources of Law Hierarchy
a. U.S Constitution
b. Statutes of Congress
c. Federal Administrative Regulation
d. State Constitution
e. State Senate
f. State Administrative Regulation
g. Local Ordinances
h. Case Law
Trial Court Judges v. Appellate Court Judges
Trial Court Judges:
Trial court judges oversee the first stage of legal proceedings, where cases are initially heard and decided.
Focus: Evidence and factual disputes
Proceeding: Trials with witnesses, evidence, and juries
Impact of Decisions: Affect the individual case directly
Appellate Court Judges:
Focus: Legal errors and interpretations
Proceeding: No new evidence; legal review only
Impact of Decisions: Can influence broader legal principles (precedent)
Appellate court judges review decisions made by trial courts to determine if legal errors occurred that affected the outcome of the case.
Jury Duty
To be eligible for Jury Duty in Georgia, you must:
i. Be a US citizen
ii. 18 years old
iii. Be proficient in English enough to understand and discuss the case.
iv. Be a resident of the county that sent you the jury summons.
v. Have NOT served on a jury in the last 12 months.
vi. Not currently be on a grand jury or on another trial jury.
vii. Not be under a conservatorship.
viii. Have had your civil rights restored if you were convicted of a felony.
Role of Juror
Role: Fact- Finding body
Types of Juries (Petit vs. Grand)
Petit Jury: Trial jury that returns a verdict in criminal and civil situations
- Consists of 12 persons
- Smaller juries are acceptable as many are 6 person juries
- Normally requires a unanimous decision.
- Textbook says: Some states have removed the requirement for a unanimous decision.
HOWEVER, Recent Supreme Court Case states the decision MUST be unanimous in SERIOUS CRIMINAL CASES (Ramos v. Louisiana).
Grand Juries: Determines whether there is enough evidence to formally charge someone with a crime
- Priavte
- Only prosecution presents evidence
Role of Lawyers and Attorney Client Priviledge
-Forbids a lawyer from revealing confidential facts and from testifying against a client.
-Extends to the lawyer’s employees in some cases .
Subject Matter Jurisdiction
refers to a court’s authority to hear and decide cases of a particular type or cases relating to a specific subject matter.
- ensures that a case is brought before the appropriate court that has the legal authority to address the issues involved
Diversity of Citizenship
i. Plaintiffs/Defendants are Citizens of Different States and each claim must be for more than $75,000
iii. Guard against State Court bias against the non-resident party
iv. Note, a corporation is a citizen of the state of incorporation and also a citizen of the state of its principal POB.
Is there subject matter jurisdiction?
Mark (citizen of GA) was corrsing a street in ATL when he was stick by a car during (citizen of NY visiting ATL). Car was owned by David emplyeers (delware corporation that has principal place of business in ATL). Mark Sues David and corporation in federal district court in ATL for 500,000.
No subject Matter jursdiction
Judicial Restriant
aka. Strict Constructionism or Judicial Abstention
Belief that change in society should result from the political process instead of court action
- Dominant philosophy throughout history
*like being a referee in a sports game who tries not to change the rules but just makes sure the players follow them
- Only Act When Necessary: Judges shouldn’t make big decisions about laws unless something really unusual happens
-Stick to the Rules (Precedent): Judges should try to follow decisions made in past cases whenever possible
-Follow the Constitution Closely: Judges look at what the people who wrote the Constitution originally meant, like reading instructions carefully to do something the right way
-Let People Decide Through Voting: Judges believe that if people want big changes, they should come from voting and new laws made by elected leaders
Judicial Activism
like when a referee in a game decides to change the rules to make the game fairer for everyone.
- Step In When Needed: Judges use their power to fix problems in society if they think it’s really important and waiting would make things worse.
-Help Make Big Changes: Judges think it’s their job to help fix unfairness or big problems, especially when lawmakers are too slow or can’t do it.
-Not Always Following Old Decisions: Judges don’t always stick to past rules if they think changing them would help people more.
-Focused on What’s Right Today: Judges make decisions based on what they think is important for the world we live in now, not just how things were in the past.
- Big Changes in History: In the 1950s and 1960s, some judges on the U.S. Supreme Court used judicial activism to help with important changes, like ending unfair rules about segregation.
Personal Jursdiction
How does a court get personal jurisdiction?
What if the Defendant is Out of State?
In Criminal Cases …
It’s the court’s power over the people involved in a case
Over the Plaintiff:
The plaintiff gives the court power by filing the case.
Over the Defendant:
The court gets power through:
Summons (official notice).
Service of Process (delivering the notice).
States use Long-Arm Statutes to get jurisdiction over someone outside their borders.
These rules only work if the person had enough connection (“minimum contacts”) with the state.
Minimum Contacts Test:
The defendant must have done one of these in the state:
- Committed a wrong (like an accident or harm).
- Owns property tied to the case.
- Made a deal or did business related to the case.
Criminal Cases:
The crime must happen in the state for the court to have power.
If the criminal flees to another state, they can be sent back through extradition (states agree to return the suspect).
Methods of Discovery
Interrogatories: Series of written questions presented to the opposing parties.
EX: Requesting the other side to give names of witness that saw what occurred
Request for production of documents: Either party asking the other to produce specific documents.
Depositions : Lawyer orally asks questions of the possible witness or any other person involved in the case ( this is recorded and a written transcript is prepared).
1.Best method of discovery because it reveals the most information
a. Depositions are very costly
Request for admission: Asking to admit that some issues in the original complaint are no longer in dispute
Burden of Proof
What the plaintiff has to show to win the case and get money or damages from the other side
Criminal Cases: Beyond a reasonable doubt?: 90 to 10%
Civil Cases: Preponderance of evidence: 49 to 51%
Clear and convincing proof: 40 to 60 %
Freedom of Speech
The Constitution says, “Congress can’t make laws that take away freedom of speech.”
This includes talking, writing, and symbolic actions (like burning a flag or silent marches).
Not Everything Is Protected:
Some speech isn’t allowed, like:
Lies that hurt someone’s reputation (defamation).
Threats or speech that incites violence.
Fighting words that lead to immediate fights.
Obscenity (highly offensive or inappropriate content).
Reasonable Limits:
The government can sometimes limit speech to keep people safe, but the rules must:
Be fair to all opinions (view-point neutral).
Be specific, not overly broad (overbreadth doctrine).
TV and Radio Rules (FCC):
The Federal Communications Commission (FCC) sets speech rules for broadcasts:
No obscene content, ever.
No indecent or profane content from 6 AM to 10 PM (when kids might be watching).
Freedom of Relgion
Congress shall make no law “respecting an establishment of religion” (the establishment clause) “or prohibiting the free exercise thereof” (the free exercise clause)
Free Excercise Clause and Establishment Clause
Establishment Clause
Government cannot prefer/ favor one religion over another or endorse generally
Free Exercise Clause
Government generally cannot limit your ability to practice your religion
Commerical Speech
Speech written on behalf of the corporation with the goal of earning a profit ex: false advertisement
Freedom of speech protects corporations and individuals
i. Essential to the public’s right to know/the right to be informed
ii. Protects the listener and the speaker
*not as protected compared to individual rights
-Government can limit commercial speech if a compelling state interest is at stake
Freedom of Press
The press is accountable for what is printed
- Construed to prohibit prior restrictions on publications
Libel is used to recover damages as a result of printed defamation of character
Eminent Domain
“Nor shall private property be taken for public use, without just compensation.”
Questions:
i What is a taking? Government builds a public road
ii. What is a public use? Public purpose
iii. What is just compensation? Government must compensate and pay market value for your property
Case Notes: Kelo vs. City of New London Connecticut; City approved plan for private development of a research facility. City initialed condemnation proceeding for the portion of the land that couldn’t be purchased.
Rule of Capture - subsurface rights
If it flows naturally, a person has rights over it. A person cannot use machinery to manipulate the resource and change it to another’s side. Can use it only to touch my side not another person’s property
Air Rights
Owner of real property possesses the air above the land to a certain extent
Can be sold to another for development. What does this mean?
For cell towers, for development; purchase someone air rights to not block a person view in a Highrise
Zoning
Zoning laws say how land in an area can be used:
- Residential: For homes.
- Commercial: For businesses.
- Industrial: For factories.
Zoning decides:
- kind of buildings can be built (homes, shops, factories).
-How big and tall buildings can be.
-look of buildings (like color or design).
Ex: You can’t build a factory in a neighborhood meant for homes.
A variance is special permission to use land differently than the zoning rules allow.
Example: Building a small shop in a neighborhood where only houses are usually allowed.
Bailments
Goods placed into another’s possession to be returned in the future.
- Bailor= owner
-Bailee= possessor of the object
Key Question: Did the bailee intend to take possession of the object?
Types of Bailments
1. For the sole benefit of the bailor
a. Slight duty of care.
b. Ex: Storing my car at the friends while I am on vacation
- Mutually beneficial.
a. Reasonable duty of care.
b. Ex: Renting a car - For the sole benefit of the bailee
a. High duty of care.
Ex: Borrowing a lawnmower
Type of Deeds
Warranty Deed:
i. promises the grantee that the grantor has good ownership and the full power to convey it.
ii. Buyer can sue the seller if someone else claims the land.
Special/Limited Warranty Deed:
i. Limits the liability of the grantor/seller
ii. Does not hold the grantor liable for what happened prior to his or her ownership
1. No guarantee against title defects dating from previous owners
iii. Current GA Real Estate Contracts call for a Limited Warranty Deed
Quitclaim Deed:
i. Makes no guarantees other than that the grantor surrenders all claim against the land.
when an offeror’s revocation is effective
Must be prior to accpetance
When is the offeree’s acceptance effective
Mailbox Rule
when the person accepting an offer sends their acceptance (like by mailing a letter), it becomes legally binding at that moment
Undue Infleunce
When one is taken advantage of unfairly by a party who misuses a position of relationship or legal confidence
Ex: Often arise when persons weakened by age or illness are persuaded to enter into a disadvantageous contract. People in a special relationship of power or trust may also exert undue influence
c. Remedy: Contract is voidable
Duress
Action that compels another to do what he or she would not otherwise do
Duress means force or threat of force
i. Threat can be physical or economic
Contracts with Minors
Minors cannot be bound and a contract is voidable at the minor options
Exception: Contracts for necessaries (ig food, clothes, shelter, medical care)
Consideration
Consideration is the give-and-take in a contract. Both sides must give or promise something of value
How It Works:
Each person gives something to the other.
What is given doesn’t have to be equal in value—any exchange counts as long as it has value
Key Idea:
One person benefits, and the other gives something up (a detriment).
Examples of Consideration:
Promising to pay money.
Delivering goods or doing work.
Agreeing not to sue (e.g., “I won’t sue if you pay me $200 for hitting my car”).
Example of Keeping an Offer Open (Option Contract):
-A seller promises to hold a piece of land for a buyer for 2 weeks while they research it.
The buyer gives the seller something in return (money or other value) to keep the offer open.
Bottom Line: Consideration is the value each side gives to make the contract fair and binding.
Equitable Remedies – if money damages are not adequate
Specfic Performance
-requires the defendant to do what he/she is contractually obligated to do
- Used for unique subject matter
Injunction
-a court order directing a party to do or to refrain from doing something
Rescission
-the court cancels the agreement and returns the consideration exchanged to each respective party
Interpretation of Contracts
What Controls:
Handwritten
Typed
Pre-printed Terms/Forms
Duty to Mitigate
a. Victim of a breach of contract must take reasonable steps to mitigate damages
ex: If a tenant moves out early breaking his lease, the landlord must try to find someone else
Mitigation= reducing or minimizing the damage
Intentional Torts
Deliberate actions that cause injury or harm
What is Intent?
Intent: the desire to being about certain results
-The plaintiff has to prove that the defendant intended to perform the act that caused the harm
Note: The plaintiff does not have to prove that the defendant intended to cause the exact harm suffered but only that the defendant intended the ACT that was substantially to result in harm.
Assumption of the Risk
The plaintiff cannot recover if the plaintiff:
1.had knowledge of the specific risk
AND
Voluntary assumed that risk
Strict Products Liability
If a seller sells a product that is dangerously defective and someone gets hurt, the seller is automatically responsible, even if they didn’t mean to cause harm.
Types of Defects:
Production Defects: The product wasn’t made properly (didn’t follow the manufacturer’s own standards).
Design Defects: The product was designed in a way that makes it unsafe (like not warning about dangers).
Defenses to Strict Products Liability:
-Assumption of the Risk: The person knew the danger and used the product anyway.
-Misuse: The person used the product in a way it wasn’t meant to be used.
-Note: Contributory Negligence (where the injured person also caused part of the harm) is not a defense in strict products liability.
Malicious prosecution vs False Imprisonment
False Imprisonment
1. Intentional unjustified confinement of a nonconsenting person
Example: Manager blocked room with chair with employee in it, Towing company towed a car with person in car
Malicious Prosecution (False Arrest)
1. Causing someone to be arrested criminally without proper grounds
Example: false arrest
Defamation
Publication of untrue statements about another that hold up that individual’s characters or reputation to ridicule
a. Slander: Oral Defamation
b. Libel: Written Defamation
What are the defenses to Defamation?
a. Truth
b. Privilege communication
Examples in the Business world? Claim a company has been dishonest, Claims that they can’t pay their bills
Is the News Media held to the same standard? No, because of the 1st amendment when it comes to public officials unless if they publish with no regard for the truth
Patent
A patent is associated with an inventive act, and conveys a right to exclude others from making, using, selling or importing the covered invention
-A patent is an exclusive right created by statute and conveyed by the U.S. Patent and Trademark Office (PTO) for a limited period of time
Types of Patents:
Utility
a. function of invention
b. 20 years from filing date
Design
a. Appearance
b. 15 years from the issue date
Plant
a. New, variety of plants that can reproduce asexually
b. 20 years from filing date
Conspiracy
Conspiracy is when two or more people agree to plan or do something illegal
How It Works:
They knowingly plan to do something wrong and intend to make it happen.
Anyone in the group can join the plan at any time.
Overt Act:
To make it a conspiracy, someone in the group must take an action to make the plan happen (like buying a mask for a robbery). This act is called an “overt act.”
Not Knowing All Details:
You can be charged with conspiracy even if you don’t know all the details of the plan, as long as you are part of the agreement.
ex:
In Home Alone: The bad guys agree to rob the house, but there’s no conspiracy until they actually take action (like showing up at the house).
Larceny (theft or stealing)
Unlawful taking of personal property with the intendent to deprive the rightful owner of it permanently (shoplifting)
Robbery
i.Larceny by violence or threat (using a gun)
Burglary
i. Breaking or entering with the intent to commit a felony (most common form is larceny)
Embezzlement
i. Entrusted someone with access to money and abuse trust for heir own personal gain
Obstruction of Justice
a. Commission of an act with the intent to obstruct or interfere with the legislative or judicial process
Examples: Changing records of phone calls that show you are guilty, altering/shredding documents that show guilty, testifying falsely, tampering with evidence, lying to a police officer
RICO
Aimed at preventing organized crime
i. You can take down the entire group at once
b. Imposes criminal and civil liability
-A RICO violation occurs when a person, in connection with an enterprise, engages in a pattern of racketeering activity
i. must have engaged in at least 2 racketeering activities
Examples of Racketeering activities: Murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene material or controlled substances, counterfeiting, mail and wire fraud, obstruction of justice, tampering with a witness, victim or informant
4th Amendment
Illegal Searches and Seizures
- Protects individuals and corporations from unreasonable searches and seizures by the government
-The police must obtain a search warrant before searching a place where people have a reasonable expectation of privacy
-The police must show probable cause that the search will yield evidence of a crime
Expectations of privacy
Private residence: Yes, needs a warrant as homes have high expectations of privacy
Commercial premises: Job; Police can search without warrant as expectation of privacy is very limited
Exceptions:
a. Consent Searches
b. Motor Vehicles Searches (in some cases); can check is evidence is in plain view
c. Evidence in Plain View
d. Exigent Circumstances: Circumstance where evidence is being destroyed or hidden, person is a threat to others
e. Police making an arrest
*At a point in the airport, you are consenting to a warrantless search
*Need a warrent to search phone
*can search their car if you are arresting them for the officer protection
Grand Juries
-Fifth Amendment of the Constitution requires an indictment by a grand jury for felony charges
-Comprised of 23 citizens
a. 16 must be present to hear evidence and grant votes on cases
b. At least 12 people must concur for the court to issue an indictment
3. Determines if there is probable cause
4. Serves as investigative body
5. Grand Jury proceeding are confidential
Exceptions: If a witness changes their words at trial then they pull up transcripts
Misdeamores vs. Felony
Commenced when the government files a charge called an information (written accusation by prosecutor presented in court charging the accused person of a crime)
-Fine or imprisonment less than 1 year
Felony:
i.Commenced by a Grand Jury Indictment (met before trial and discuss if there is probable cause to go to trial)
ii. Fine or Imprisonment 1 year or more
Limited Partnerships vs. General Partnerships
Differences between General Partnerships and Limited Partnerships:
- Limited partners are not personally responsible for the debts/liabilities of the organization.
- Limited partners are not involved in the operations of the partnership.
- Limited partnership certificate must be filed in the county of its principal POB and additional copies in other counties/states where LPship conduct business
a. What happen if this is not done/kept updated?
i. Those limited partners are treated as general partners and liable
Limited Partners
1. Not responsible for the debts of the business organization Unless they participate in the management or control of the organization
2. Can assign interest without dissolving the partnership
General Partners
1. Personally liable for the organization’s debts
2. Manage and control the company
General Partnerships
Pros:
1. Creation can be automatic but may be modified by agreement
2. Cost of formation is not significant
3. Taxed at the partner level only (entry isn’t taxed)
4. Equal voice in management unless there is a contrary agreement
5. Partnerships may operate in more than 1 state without obtaining a license
6. Partnerships are generally subject to less regulation and less government supervision than corporations.
Cons:
1. Only a limited number of people can be partners.
2. Dissolved whenever a partner ceases to be a partner (withdrawal, death)
a. Deal/buy out their interest then can continue
3. Each partner has an equal voice, which can lead to deadlocks
4. Personal liability and joint and several liability for all debts and liabilities.
5. Partners taxed on their share of partnership profits, whether those profits are distributed or not (could pay taxes on income you don’t see)
Limited Liability Partnerships
-All partners have some liability protection
-All partners are considered general partners
-All partners can participate in the operations of the business
-LLP partners are still liable for their individual negligence
-Taxed at the partner level
Commonly used by professionals (attorneys, accountants, doctors)
Publicly Held vs. Closely Held
Closely held: Organizations owned by only a few persons
Ex: Family-owned and family-operated business
Publicly held: Businesses owned by hundreds or thousands of persons
Ex: Business whose stock is traded on a public exchange
Chain of Control in a Corporation
i. Shareholders
ii. Board of Directors Elected
iii. Officers appointed by BOD
Regulations vs. Guidelines
Regulations have the force and effect of law
-Must allow time for public comment after proposing regulation
Guidelines
-Issued to supplement rules and regulations
-Administrative interpretations of statutes
-Are advisory but do not have the force and effect of law
Exhaustion of remedies vs Primary jurisdiction
EExhaustion of remedies: Before going to court about a decision made by an administrative agency (like a government department), you usually have to first use all the options provided by that agency to fix the problem. Courts won’t step in until you’ve tried everything the agency offers.
Primary jurisdiction: If someone files a case in court, but the issue is something an administrative agency is better equipped to handle (because they’re experts in that area), the court will pause the case and let the agency handle it first.
Consent order vs Cease and desist order
Cease and Desist Order– order that the violator must stop objectionable activity and refrain from any further violation
Consent Order – order entered by the agency that is agreed upon by the accused and requires the accused to waive rights to judicial review
Administrative law judges role
do the job of finding and deciding the facts
Reasons for administrative agencies
Specificity
Expertise
Protection
Regulation
Services
How do administrative agencies get their power?
Executive Power:
1.Enforcing law and regulations
2.investigate, prosecute, give advice, and oversee things
Quasi-legislative:
1. Making Rules and regulations
Quasi-judicial:
1. They decide if someone broke a law or rule.
2. They settle disputes.
New Supreme Court Case
Interpreting Ambiguous Laws:
Before: Courts relied on the Chevron case, which said that if a law was unclear, agencies could decide what it meant, and courts would generally accept the agency’s interpretation if it was reasonable.
Now: In Loper Bright Enterprises v. Raimondo (June 28, 2024), the Supreme Court overruled Chevron. Courts now decide how to interpret unclear laws themselves, without deferring to agencies.
Insider Trading under rule 10b-5
Insiders include people like company officers, directors, employees, or anyone in a trusted relationship with the company.
What is it?
Insider trading is illegal and considered fraud under the law (Section 10b-5).
It happens when someone uses secret, important information (not available to the public) to buy or sell stocks, taking advantage of their special connection to the company.
Tippees
(a person who learned nonpublic information from an insider)
Tippees can be guilty, but only if:
The insider (“tipper”) broke their duty of trust by sharing the info.
The tippee knew or should have known that the tipper was breaking this duty
Misappropriation theory vs classical theory
Classical Theory of Insider Trading
1. Committed by individuals inside a company
ex: An employee director or officer of the company
Ex: Employees, directors, or trusted professionals (like lawyers) use secret company information to trade stocks for personal gain.
Misappropriation Theory
1. Committed by individuals outisde a company
Ex: An outsider (like a consultant or a friend) gets access to secret company information from a source and uses it to trade stocks. This is considered fraud because they break the trust of the source who shared the information.
Short Swing Profits
Requires company insiders to return to the company any profits made from the purchase and sale of company stock if BOTH transactions occur within a 6 month period
a. Based on the assumption that insiders have material, non-public info during this period
b. As such, any trades during this period are per se illegal (regardless of the insiders state of mind).
Blue Sky Law
What are they?
State laws that protect people from buying fake or risky stocks and bonds without enough information.
Who do they cover?
These laws apply to both securities regulated by federal law and those that are exempt from it
Uniform Securities Act (1956):
A model law that states can use to create their own Blue Sky Laws.
Types of Registration (ways to get approval to sell securities):
-Notification: The company can sell securities automatically after a waiting period unless the state stops it.
-Qualification: The company must provide detailed information and wait for the state to approve before selling.
-Coordination: If registered with the SEC, state approval happens when federal approval does.
SOX vs Dodd-Frank
SOX: To make sure public companies provide accurate and trustworthy financial reports.
Who Does It Cover?
All U.S. public companies and international companies registered with the SEC.
Gave the SEC more power to oversee companies and hold them accountable.
Primary Goal: Corporate accountability
Target Audience: Public companies and auditors
Focus: Internal controls and reporting
Response to Corporate fraud scandals
Dodd-Frank: Purpose:
Created after the 2007-2008 financial crisis to prevent future crises and reform the financial system.
Key Rules for Big Banks:
Introduced stricter rules like stress tests and liquidity requirements to ensure big financial institutions stay stable
-New Agencies Created:
Consumer Financial Protection Bureau (CFPB): Protects consumers from unfair financial practices.
Financial Stability Oversight Council (FSOC): Monitors risks to the financial system.
Federal Insurance Office (FIO): Oversees insurance industry issues.
Office of Housing Counseling (HUD): Supports homebuyer education.
Office of Credit Ratings (SEC): Regulates credit rating agencies.
Investment Advisory Committee (SEC): Advises on investment policies.
Office of Investor Advocate (SEC): Helps protect investors
Primary Goal: Financial system stability
Targe: Financial institutions, consumers
Focus: Systemic risk and consumer rights
Response to Financial crisis
Howey Test
is a legal standard used to determine whether a transaction qualifies as an investment contract
Must meet these elements:
- An investment of money
- In a common business activity
- With a reasonable expectation of profit
- Based on the efforts of someone other than the investor
Ticker Tape
MSFT 5K @ 61.25 1.35
i.Ticker Symbol
ii. Shares Traded
iii. Price Traded
iv. Change Direction
v. Change Amount
Parities Regulated Under 33’
i. Issuer – individual or business offering a security for sale to the public
ii. Underwriter – anyone who participates in the original distribution of securities by selling securities for the issuer or guaranteeing their sale
Example: Investment Bank, Securities Brokerage Firm
iii. Controlling Person – is one who controls or has significant influence over the issuer’s management and policies
1. Example: Major stockholder of a corporation
iv. Seller – anyone who contracts with a purchaser or who is a motivating influence that causes the purchase transaction to occur
Parities Regulated The ’34 Act
Difference between the Securities Act of ‘33 and ‘34
The 1933 Act focuses on new securities and ensuring transparency at the time of sale.
The 1934 Act regulates the ongoing trading of securities and ensures fair and orderly markets.
Due Dillgence
Defense for experts
-Must prove:
i. A reasonable investigation of the financial statements of the issuer & controlling persons was conducted, AND
ii.as a result of that investigation an expert exercising due diligence must prove that there was no reason to believe any of the information in the registration statement or prospectus was false or misleading
Statute of limitations: (‘33)
a. Purchaser must bring action within certain timeframe
b. Basic period is 1 year
i. 1 year does not start to run until the discovery of the untrue statement or omission OR it does not start to run until the time such discovery would have been made with reasonable diligence
c. In no event may a suit be brought more than 3 years after the sale
d. Also a defense to criminal liability
Who is entitled to take leave/rules under FMLA?
Care of an immediate family member (a spouse, minor child, or a parent) with a serious health condition but DOENS’T APPLY to IN LAWS
Applies to:
i. Employers who employ 50 or more employees
Eligible employees:
i. Worked for a minimum of 12 months for the employer
Exclsuive Remedy Rule
Employee’s sole remedy for workplace injury shall be be worker’s compensation
Employment at Will
General Rule: Employers may discharge emplyees withour cause at any time and without notice
i.Typically applies to private sector
ii. Most government jobs can only fire somone for cause and provide notice they plan to terminate you
- All states in the US expcept Montana, recognizies the “at-will” emplyement doctrine
Exceptions:
Violation of Statues
-Government jobs say whether you can or cannot fire somone without cause
Contrctual Rights
-Hired based on contract for period of time and employer is required to honor that contract
Public Policy
-Employer is not allowed to fire you if you are going to do jury duty
-Employer trying to get rid of you because you filed a claim with the EEOC
Workers Compensation
History: employees could sue their employers for negligence
ii. Employer could defend based on:
1. Assumption of the risk
2. Contributory Negligence
3. Fellow-servant rule
-In 1855, Georgia and Alabama passed Employer Liability Acts.
-By 1949, every state had a workers’ compensation program.
Workers Compensation
i.Purpose: Protect employees and their families from the risks of accidental injury or death resulting from employment
Applies to: injuries that are taking place in the course of emplyment
Minimum Wages Laws under FSLA
Minimum wage = $7.25 per hour
No, minimum wage is not the same in all states because cost of living is different in every state
Minimum wage for tipped workers = $2.13
-Amount of tips plus that $2.13 must reach at least $7.25 per hour; if not employer must pay the difference
Overtime = 1.5x regular rate of pay for every hour over 40 hours
EXEMPT EMPLOYEES = Executive administration, managers, professional positions, highly compensated employees
-Minimum age = 14
-Limits on hours for minors unde 16
-Break time? Under Fair Labor Standards Act you are not entitled to take a break or meal time to workers
Exception: nursing mom for 1 year after birth and employer must provide a private space to nurse or pump and bathroom doesn’t satisy a space to nurse
Emplyers required to pay whichever minimum wage is higher (state or federal)
Do you have to inform your employer of accommodations you may need?
Requires employers to provide reasonable accommodations: Adjusting a job or work environment to fit the needs of disabled employees
Back Pay v. Front Pay
Back Pay:
Refers to wages or benefits that an employee should have received but did not due to unlawful actions (like wrongful termination, discrimination, or other employment violations).
Example: If an employee was wrongfully fired and it took a year for them to be reinstated, they could be awarded back pay for the year they were out of work.
Front Pay:
Refers to compensation for future lost wages and benefits that the employee might lose due to the unlawful action.
Example: If an employee is wrongfully terminated and cannot return to their previous position, they may be awarded front pay to cover lost wages for a certain time while they look for a new job.
In short, back pay is for past lost wages, and front pay is for future lost wages.
Types of Sexual Haraaessment
Quid Pro Quo
In quid pro quo cases, the employee has been promised benefits or threatened with loss if she or he does not give sexual favors to a supervisor
Ex: legally blonde
Hostile Work Environment
-In hostile work environment cases, co-workers make offensive sexual comments or prepositions, make offensive remarks about a person’s sex, engage in suggestive touching, show nude pictures or draw sexual graffiti
Providing accommodations for religious needs and disabilities
Reasonable accommodation to religious needs of employees must be accepted by employers
Ex: days off on certain religious holidays, prayer time
What you can ask during interviews regarding disabilities
Only after a job offer has been extended, can the employer condition employment on the employee’s response to job related medical questions
Qualified disabled
those with a disability who with or without a reasonable accommodation, can perform the essential functions of a particular job position.
Protected classes under Title VII
Prohibits job discrimination based on race, color, religion, sex, or national origin
Disparate treatment vs disparate impact and defenses
Disparate Treatment: employer intentionally discriminates
Employer Defense?
Bona fide occupational qualification (BFOQ) relating to religion, sex, or national origin
-Church looking for a Baptist pastor and only hires a Baptist pastor
Disparate Impact: Unintentional
Employer’s policy, practices, or procedures are unbiased but end in a disproportionate impact on a protected class
Employer Defense? The challenged employment practice is job-related and consistent with business necessity
Who does Title VII apply to?
a. Prohibits job discrimination based on race, color, religion, sex, or national origin
b. Applies to employers with 15 or more employees
-Includes both public and private employers
Employment agency vs Employer discrimination
RULE: Employment agencies are prohibited from either failing to refer or from actually referring an individual for employment on the basis of race, color, religion, sex, or national origin
-The above rule differs from the law binding employers, where it is unlawful only to fail or refuse to hire on discriminatory grounds.
-The affirmative act of hiring for a discriminatory reason is apparent not illegal for employers
Age discrimination
a. Prohibits employment discrimination against employees aged 40 and above
b. Applies to both private and public employers with 20 or more employees
c. Prohibits forced retirement
d. Does NOT apply to executives or true occupational limitations (police officers, pilots)
- CEO is 65 or older and is entailed to annual retirement benefits of $44,000 a year, then we can force them to retire
Employer Defense: Employer must establish that a reasonable factor other than age accounted for the discriminatory impact
Ex: as a pilot; sight is a reasonable factor other than age to say you cannot work; safety concern for passengers
EX: a private company with 25 employees, fired a 22 year old employee because they believe 22 year olds are lazy despite the employee’s previous track record This is NOT a VIOLATION of the age discrimination act since is applies to employees 40 and above
