PH Articles

  • SEC Offers Possible Path to Compliance for ICO Issuers
    On November 16, 2018, the Securities and Exchange Commission (“SEC”) announced settlements with two companies that had raised funds through initial coin offerings (“ICOs”), which allegedly were neither registered nor exempt from registration under federal securities laws. These cases mark the first time that the SEC has imposed civil penalties solely for violations of Section 5 in connection with ICOs and introduce a novel method for redressing unregistered, non-exempt offerings under federal securities laws.
  • Avoiding Russian Roulette with Rights of First Offer in Shareholders’ Agreements
    In the recently decided case of United Co Rusal Plc v Crispian Investments Limited (1) and Whiteleave Holdings (2), the English courts had to consider the extent of a right of first refusal (“ROFR”) contained in an agreement between certain shareholders in a company.
  • U.S. Proposes a National Framework for the Regulation of Fintech
    Federal regulators in the United States have released a series of recommendations that form a proposed national framework for companies engaged in financial technology (“Fintech”).
  • New Obligations for U.K. Payment Institutions and E-Money Issuers
    In a drive to improve standards in the payments and e-money industries, on 1 August the Financial Conduct Authority (“FCA”) published a consultation on General Standards and Communication Rules for the Payment Services and E-Money Sectors (CP18/21).
  • Tax Considerations in Structuring Initial Coin Offerings
    In this report, the authors discuss income tax considerations for issuers of convertible virtual currencies (better known as initial coin offerings). They analyze the different opportunities for tax deferral under onshore and offshore token sales, as well as considerations for companies that plan to use their own tokens to compensate founders and employees.
  • PAUL HASTINGS + INNOVATION
    In today’s fast-paced, data-driven environment it’s not enough to react to change, you must stay ahead of it. We understand the imperative for innovation, efficiency, and breakthrough performance facing leading companies – and what it takes to help our clients succeed.
  • CRISPR: The New Frontier of Biotechnology Innovation
    By now, life sciences IP attorneys have probably heard about clustered regularly interspaced short palindromic repeats. In short, they are the signatures of bacterial immune systems that scientists have hijacked into biological tools for editing genomes, the DNA-based instruction manuals from which all living things are built and maintained.
  • New HSR Thresholds Announced for 2018
    The Federal Trade Commission (“FTC”) has announced its 2018 jurisdictional and filing fee thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). These thresholds are revised each year based on the gross national product. The increased thresholds were published in the Federal Register on January 29 and will become effective 30 days later, on February 28, 2018. The new thresholds will apply to all covered transactions that will close on or after that date.
  • The Return of Stock as Currency in Acquisition Transactions
    In the public M&A market, all-cash deals have been king for the past few years even while stock prices (and thereby the value of stock as potential deal currency) have been at or near all-time highs. Recently, however, there has been a spate of transactions in which stock is used as deal currency. Part cash/part stock consideration is used in Cigna’s acquisition of Express Scripts, Lumentum’s acquisition of Oclaro, and in Salesforce.com’s acquisition of Mulesoft.
  • NYC: MUNICIPAL BENEFACTOR TO LIFE SCIENCES AND TECHNOLOGY VENTURE CAPITAL
    New York City is second only to Silicon Valley as the world's most active setting for venture capital investment, emerging growth companies, and startup culture. New York has positioned itself as a global leader in the startup economy. The life science and technology industries, with prominent investors and companies increasingly active in the space, comprise two of New York's most active venture ecosystems.
  • Initial Coin Offering (ICO) Teleconference Series
    The initial coin offering (ICO) market has become one of most closely watched areas of financial activity, with ICOs drawing in a variety of investors. Regulators’ caution and the uneven performance of some ICOs are competing with investors interested in capturing a stake in these crowdsales. As we discuss in our ICO teleconference series, due diligence and a thorough understanding of the range of potential risks and outcomes are critical, especially at a time of tightening regulatory attention.
  • Smarter, Faster, Stronger: A New Suite of VC Model Docs
    In March 2018, for the first time in four years, the National Venture Capital Association updated its model legal documents, which have become the standard in the venture capital industry. Many changes are utilitarian, such as the addition of several customized optional representations and warranties in the stock purchase agreement, provided to accompany different types of deals across various industries.
  • Tech Giants Already Facing Complaints Under GDPR
    Max Schrems, a European privacy activist - best known for bringing down “Safe Harbour” – has filed complaints against four of the biggest US tech giants under the new EU General Data Protection Regulation (GDPR). According to Max Schrem’s non-profit organisation, None of Your Business, the complaints were filed on Friday 25 May, coincidentally (some might argue too coincidentally), the very first day of GDPR’s entry into force; and are said to be worth a combined total of over EUR 7 billion, in maximum imposable penalties.
  • Perils of Imprecise M&A Disclosure
    The Delaware Supreme Court, in a recent ruling involving the $1.4 billion private equity purchase of The Fresh Market, sent a loud and clear message about the importance of fully candid, and accurately worded, disclosures in merger proxies and tender offer statements.
  • Private Equity – Are We At A Pivot Point?
    While on the surface many areas of private equity remain robust, we are a long way from the sector’s pre-crash glory days, especially as the full impact of the U.S. administration’s recent actions in deregulation, tariffs and taxes play out. Glory days aside, we continue to see transactions—one-off and otherwise—that produce striking returns for investors and sponsors. Similarly, while there was a large pullback in megadeals following the crash, there have been several multi-billion-dollar transactions of late, including club deals.
  • How Should We Deal with HR Data During the Due Diligence Process for a Share or Business Sale Under the GDPR?
    Over the last ten years, most companies have dutifully removed the names of employees before they upload the employee census to the data room or relied upon the ICO’s guidance note on Disclosure of Employee Information under TUPE to navigate the process as part of a business sale. But, we are about to enter a ‘brave new world’ where this approach is just one tip of the proverbial iceberg.
  • NYC: Municipal Benefactor to Life Sciences and Technology Venture Capital
    New York City is second only to Silicon Valley as the world’s most active setting for venture capital investment, emerging growth companies, and startup culture. New York has positioned itself as a global leader in the startup economy. The life science and technology industries, with prominent investors and companies increasingly active in the space, comprise two of New York’s most active venture ecosystems.
  • Effect of Tax Reform on Family Offices
    On December 22, 2017, President Trump signed into law tax reform legislation (the “Act”) formerly known as the Tax Cuts and Jobs Act. Under the Act, miscellaneous itemized deductions that had been available to individual taxpayer’s to reduce taxable income are suspended from 2018 through 2025. Such miscellaneous itemized deductions include items such as unreimbursed employee business expenses, tax return preparation costs, cost incurred in contesting taxes, hobby expenses, investment expenses, and expenses for the production or collection of income among others.
  • Research by Paul Hastings Shows Non-Cash Payments Across U.S. and UK to Soar by 2026
    The value of non-cash payments in the US and UK will reach $46 trillion and £1.44 trillion respectively by 2026, new research from leading global law firm Paul Hastings shows today.
  • Effect of Tax Cuts and Jobs Act on Businesses
    On December 22, 2017, President Trump signed into law tax legislation formerly known as the Tax Cuts and Jobs Act (the “Act”). This most comprehensive tax overhaul since 1986 creates significant opportunities to minimize a business entity’s overall tax burden. Set forth below are some of the key business taxation provisions of the Act:
  • New Tax Law Adversely Affects Certain Executive and Equity Compensation Arrangements
    President Trump signed into law tax reform legislation containing provisions that impact executive compensation and equity-based compensation.
  • States Prevail Over E-Commerce Companies in Battle for Sales Taxes
    The U.S. Supreme Court issued a landmark decision on June 21, 2018 in South Dakota v. Wayfair, Inc., which held that states may require retailers to collect sales taxes even if the retailer had no physical presence in the state.
  • Dodd-Frank Relief Bill Includes Provisions to Encourage Capital Formation
    On May 24, the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Relief Bill”) was enacted into law.[1] The Relief Bill represents the first significant statutory modification to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) since the Dodd-Frank Act was adopted in 2010. While most of the Relief Bill is intended to tame restrictions in existing federal banking law, Title V of the Relief Bill, among other things, amends certain provisions of the federal securities laws to encourage capital formation.
  • Venture Debt: An Attractive Tool for Startup Companies
    Startup and growth-stage companies typically rely on venture capital equity financing for their fundraising needs. Although venture capital is necessary to grow a business, it may not be the best tool available if the objective is a cash infusion to meet developmental and other milestone goals. Rather, taking on debt in the form of a venture loan (which, by conservative measures, is a $4 billion per year industry), may best serve companies’ cash needs, while avoiding unnecessary dilution.
  • SEC on Cryptocurrencies & Cryptocurrency-Related Products
    Over the last few years, various fund sponsors have been contemplating different ways to bring cryptocurrency exchange traded products to the masses. For these fund sponsors it has been an arduous journey, and with the recent pronouncements from the Securities and Exchange Commission’s (the “Commission”) Division of Investment Management, it appears that this journey is only beginning.
  • California to Europe: We Want To Be More Like You
    On June 28, 2018, the California state legislature voted to approve Assembly Bill 375, the California Consumer Privacy Act of 2018 (the “Privacy Act”). The Privacy Act, which mandates several similar requirements to the General Data Protection Regulation (“GDPR”) that took effect in late May in the European Union, will have a substantial impact on the way companies store, share, disclose, process, and engage with consumer data in the United States. The Privacy Act will take effect on January 1, 2020.
  • The New Federal Trade Secrets Law: Top Takeaways for Employers
    Employers should have a program in place for exit interviews that addresses employee access to confidential information, ensures the return of all confidential and proprietary information, inventories devices, preserves forensic evidence, and reminds employees of their legal obligations, among other things. While these steps are not new, the availability of seizure orders is a reminder that taking swift action to recover one’s trade secrets requires focused attention and substantial proof. In the employment scenario, the exit interview is a critical time to lay the groundwork for such an action.
  • U.S.S.C. Upholds Inter Partes Review’s Constitutionality but Constrains the Patent Office’s Authority
    Yesterday, the U.S. Supreme Court handed down its decisions in two closely watched patent cases: Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 584 U.S. ____ (2018) and SAS Institute Inc. v. Iancu, 584 U.S. ____ (2018). Each decision had the potential to profoundly change practice before the Patent Trial and Appeal Board (“the PTAB”) and the congressional scheme of post-grant review enacted by the America Invents Act (“the AIA”). While most of the attention centered on Oil States and the possible invalidation as unconstitutional of inter partes reviews (“IPRs”), SAS Institute may have a more profound impact on the IPR regime and PTAB practice.
  • IP: Virtual Walls to Protect Virtual Values
    Intellectual property (IP) has increasingly become companies’ most important asset as tech innovation and the diffusion of the digital economy become embedded in operational and productive processes. These IP assets are dynamic, reflecting not only the pace of technological evolution but often also the acquisition of third-party IP assets as companies invest, expand and grow.
  • Women Startup Challenge Winners to Receive Pro-bono Legal Services From Paul Hastings
    The growing profile and cost of cyberattacks have put this issue at the top of the corporate agenda, and highlight the potential threat to the data-fueled architecture of today’s global business environment. The dynamic nature of cybersecurity threats, their pervasiveness, and the frequency of attacks can provoke feelings of helplessness.
  • Mobile Devices and Internet of Things (IoT) - Top 10 Practitioner Tips for Successful Development and Roll-Out of IoT
    Top 10 Practitioner Tips for Successful Development and Roll-Out of IoT
  • SEC Input on Cryptocurrencies
    Over the last few years, various fund sponsors have been contemplating different ways to bring cryptocurrency exchange traded products to the masses. For these fund sponsors it has been an arduous journey, and with the recent pronouncements from the Securities and Exchange Commission’s (the “Commission”) Division of Investment Management, it appears that this journey is only beginning.
  • NYC and Venture Capital
    New York City is second only to Silicon Valley as the world’s most active setting for venture capital investment, emerging growth companies, and startup culture. New York has positioned itself as a global leader in the startup economy. The life science and technology industries, with prominent investors and companies increasingly active in the space, comprise two of New York’s most active venture ecosystems.
  • IP Protection
    Intellectual property (IP) has increasingly become companies’ most important asset as tech innovation and the diffusion of the digital economy become embedded in operational and productive processes. These IP assets are dynamic, reflecting not only the pace of technological evolution but often also the acquisition of third-party IP assets as companies invest, expand and grow.
  • Preferred Stock Terms
    This chart is designed to provide an overview of the main terms and characteristics of preferred stock equity financings. It assumes the Company offering securities is organized as a Delaware corporation. The chart is divided into three sections: Term Sheet Terms: General Overview; Documenting Preferred Stock Sales; and Typical Terms of Preferred Stock Transactions. It is meant to serve as a general guideline for the most common terms of a preferred stock financing.
  • SEC Easing Accredited Investor Restrictions
    When regulators seek to protect investors from risk, they often end up simply putting legitimate opportunities out of bounds. In one now infamous example from 1980, Massachusetts regulators declared a certain IPO “too risky” and prohibited participation by state residents. But Apple’s IPO turned out to be a decent investment opportunity after all. Similar paternalistic thinking gave rise to the SEC’s “accredited investor” restrictions, which prevent people of modest means from participating in certain investments. The SEC appears poised to ease those restrictions.
  • Venture Debt: An Attractive Tool for Startup Companies
    Startup and growth-stage companies typically rely on venture capital equity financing for their fundraising needs. Although venture capital is necessary to grow a business, it may not be the best tool available if the objective is a cash infusion to meet developmental and other milestone goals. Rather, taking on debt in the form of a venture loan (which, by conservative measures, is a $4 billion per year industry), may best serve companies’ cash needs, while avoiding unnecessary dilution.

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