So Sue Me for Blogging (?)

It's nothing new: what you say can hurt you. But it seems that the prevalence of social media is sparking more litigation now than ever. According to a recent WSJ article, there were 106 civil lawsuits against blog-type users, resulting in $17.5 M in damages against them. Social media makes being sued almost too easy. Think about the most obvious legal feet you can trip over: copyright infringement, trademark infringement, defamation, and libel. Posting someone else's videos on YouTube, uploading copied pics on Facebook, making rash comments on Twitter, these online activities have become ubiquitous.

What most social media participants tend to neglect are the very thin protections (if any) they have. If you post a video or image that's infringing, at least you may be afforded an opportunity to take it down before a suit or injunction occurs. But, making comments that you would only otherwise make on a bathroom stall which can now be made on a public forum reaching thousands in an instance can be dangerous stuff. It's pretty hard to unring a bell, don't you think?

ASU's OBAMA Commencement

Here's a highlight of our commencement with the President Obama:

Commencement 2009 from ASUF Admin on Vimeo.

You can read a transcript of his quite captivating commencement speech here:
http://www.asuchallenges.com/commencement2009/obama.asp

Who Regulates the Regulators?

"The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation."

That's a direct quote from the SEC's "How the SEC protects Investors" webpage. Arguably, the single most important element for sustaining this mission is fairness. How does the SEC sustain fairness? By maintaining market efficiency and transparency through public-disclosure. The dissemination of market information is critical to fair dealing and fraud protection in any market. But it's of particular importance in the securities market because this information is often the sole factor for the public to rely upon. For example, I can't exactly call up management at Google, AIG, Citibank, or GM and say "hey guys, so tell me, is there anything that could go wrong this quarter or any long-term debt obligations you guys wanna tell me about? I got about a mil riding on you?" The SEC mandated Form 10-K easily disposes of such matters, allowing investors a fair chance to invest w/o blind reliance. Undisclosed risks would pollute the essential risk-return relationship trading markets are known for.

Ask yourself, if there are measures in place to check disclosure, protect investors, maintain fairness, and efficiency, why does the public get dooped so frequently??? Is it the analysts? Let's not forget, Enron was mysteriously rated as a top pick by analysts across the board only weeks prior to their earnings recalculation announcement, when their shares fell from $90 to .50 cents. When do the turds actually start hitting the fan?

Let me sprinkle some more pepper on this well done issue: Today's WSJ reports "Insider Trading Probe at SEC". Ok so a few guys that were supposed to be our watchdogs ate the steak. What's that got to do with you and me. How about regulators using information for personal profit, not public protection. Even worse, how about the public relying on a false sense of protection? Partial protection is like having breaks that work once in while-- would you feel comfortable doing 65 mph knowing you could "sometimes" rely on your breaks?

Quote from WSJ: The SEC has "'essentially no compliance system' to detect potential insider trading. It said the agency didn't conduct spot checks on trading and the various offices that received trading reports didn't share information."

Additionally: "Any trades employees make have to be reported to the agency's director of personnel within five business days. The report said the SEC doesn't have someone in that position but that there is an associate executive director in Human Resources. It said several SEC employees were unfamiliar with the rules or misunderstood them."

My point is this: How can we rely on financial policing by persons who act in self-interest and don't even have the means to protect us? That's not to say the SEC is to blame for every financial fallout, but then again...

http://online.wsj.com/article/SB124241028545124563.html#mod=testMod

3L Tells Dean to Back-Down the Shananigans, and Refund his Tuition

The job market, yeah it's pretty bad out there. And if you are a graduating 3L, who are you kidding, there are plenty of jobs out there: Radio Shack, McDonald's, Taco Bell. Heck, there is a Wal-Mart not too far from my house. I am sure you can make partnership there.

My sentiments are shared far and wide. In all honestly though, we are not entitled to special treatment. These are tough times, and resilience will be rewarded. But some 3Ls have gone a little too far. Below are a few snippets from an actual letter a Loyola University Chicago School of Law wrote to his Dean:

"After yesterday's disaster of a panel discussion on the financial crisis of the nation, I am so angry, I can't even sleep.

I am officially giving notice that I will refuse to answer any exam question that goes beyond the bounds of the course description and I fully expect to graduate 5 days later. I will be encouraging my fellow 3L's to do the same. Should this letter or my course of action be answered by any negative action that would affect my graduating law school, I will send an open letter the the entire Chicago legal community explaining to the potential employers of future Loyola Law grads that professors at Loyola School of Law are given free reign to teach whatever they want despite the school's official course catalog and descriptions."

Now I know I am not the only one. But this is really going out on a limb. There's more:

"Please read the following:

282 - Accounting for Lawyers (3). This course is intended to provide an understanding of basic accounting principles and their practical application in connection with the practice of law. There are no prerequisites and no requirement of a business background. Topics covered include fundamental principles of accounting for business enterprises; how to analyze and understand an income statement, balance sheet, and statement of cash flow; basic concepts of revenue recognition; conventions for capitalization versus expenses; and how to recognize possible manipulation of financial and accounting statements. Recent high profile accounting scandals such as Enron and WorldCom will also be explored.

I chose my classes very carefully this semester such that nearly every class I am taking was directly, and practically, applicable to my job after graduation, including Accounting for Lawyers. Because I don't have a degree in business, economics, or accounting, and because I have never taken an accounting class, I, like many of my fellow classmates, took this class for its practical nature. In light most favorable to Prof. [REDACTED], we spent perhaps two class periods discussing the above basics. He actually pointed us to some website and basically told us to teach ourselves basic accounting. If that what we wanted to do, we wouldn't have signed up for this class."

Now here's his pitch, get ready for this:

"I feel that Loyola and Professor [REDACTED] completely defrauded the students in this class and misrepresented this class by offering the above course description and as a result, I have wasted the proportionate amount of my tuition dollars (approx $3000) taking this class. Prof. [REDACTED] has repeatedly, and I do mean repeatedly, announced to our class his extreme displeasure in the Federal Government's propping up the recently filed financial institutions, at a great cost and little benefit to the average American citizen. It his strong opinion that CEO's who promise shareholders one thing but do another to line their own pockets should not be so greatly compensated.

I challenge Prof. [REDACTED] to live up to his own words. Because he completely failed to meet the objectives of this course as described and sold to us, that Loyola refund each student in this class the proportionate amount of tuition paid. As compensation for the complete waste of our time in taking a class we did not want when instead we could have enrolled in another more practical class, I urge Loyola to make sure that everyone in this class gets FULL CREDIT for the course, and a grade that reflects the student's understanding of topics that are limited to those described in the course description. And considering what little was taught to us, it should be a short exam."

I share his sentiments about some professors creating class substance while using the bathroom right before class. But this is really out there.

Cheers to an awesome profession.

Indian-Democratic Response to Bad Politics!

Solution: Relax the Standards, Coverup Losses?

Does it make sense for the Financial Accounting Standards Board to reduce the standards required for what is ultimately a benchmark for valuating assets (mark-to-market rules)? I thought that when standards fall, expectations do also, and the garbage-in-garbage-out model perpetuates?

Is this another example of bowing to the bankers?
http://online.wsj.com/article/SB123867739560682309.html#mod=testMod

True Spirit of American Innovation: CORRUPTION

President Obama's appointee as Chief Information Officer for the White House is being investigated by the FBI for corruption. Please, humor me and act surprised. WOW!

The CIO of the White House is in charge of federal technology spending and strategic IT planning. This position is supposed to keep a lock-down on things like information privacy + security.

What happened? President Obama appointed Vivek Kundra, previously D.C.'s CTO responsible for technology operations and strategy for 86 agencies, to be CIO of the White House. This was officially executed on March 5 according to official White House press release. BAM! About a week later, FBI storms Kundra's office after getting wind of a fraud scheme. The FBI has arrested Yusuf Acar who worked in the DC information security office and Sushil Bansil, another Indian dude that worked in technology (no surprises on that one!). Both were under Kundra's office.

Court documents state Acar was accused of conspiring to commit bribery, fraud, money laundering and conflict-of-interest violations. Bansal was accused of conspiring to commit bribery and money laundering. Of course, Kundra is on "leave". Sounds pretty good.

Obama stated in a March 5th press release that his appointed Kundra "to ensure that we are using the spirit of American innovation and the power of technology to improve performance and lower the cost of government operations." Hey no problem. It would be nice if next time we knew he meant corruption. Jeez. All we ask for is a little transparency in governance. But then again, overall, things are fairly predictable. Don't you think?

reference:
http://www.whitehouse.gov/the_press_office/President-Obama-Names-Vivek-Kundra-Chief-Information-Officer/
http://online.wsj.com/article/SB123687217235808365.html

Latham & Watkins drops 190 lawyers in a "one shot deal"

Latham & Watkins, the nations 2nd highest grossing law firm (2nd to Skadden Arps) booted 440 employees! A total of 190 lawyers and 250 supporting staff were dropped in what Chairman Robert Dell calls a "one shot deal". That's not good news. Especially considering Latham grossed $2 Billion in 2007.

Does this mean they didn't maintain enough padding for this hard of a hit? Or do their shareholders just love lacing their pockets as much as possible? After all, firms do have 2 options: retain earnings, or pay out shareholder salaries and bonuses. So if earnings fall, all else equal, associate salaries gotta go.

Boy am I glad my undergrad was in paper clip manufacturing. Then again, if law firms are slowing down that means less senseless paper work. Less senseless paper work means less legal secretaries. As secretaries decrease, office supply theft will decrease. Which equates to greater inventories of paper clips. Which means demand for paper clips will decline significantly. Now that really sucks.

reference: http://online.wsj.com/article/SB123575323300395661.html#mod=testMod

White Collar Black Market: Allen Stanford's $8B Fraud Scheme

If you haven't heard about this yet, it's likely you are still trying to figure out Mr. Madoff's grand scheme. That guy was a former NASDAQ Chairman, and another "trusted" member of our financial society. The new "Sir" is Allen Stanford. He's from the Bush homeland of TX, where the frauds are always bigger and better. Stanford is the Chairman of Stanford Financial and has managed to support the Mexican drug cartel, launder money through off-shore accounts, create false certificates of deposits, etc... BTW, Stanford has mysteriously disappeared. Just in time for a nice investigation. The irony.

These guys are well connected. Remarkably, Vice Prez's Joe Biden's son managed some interesting hedge funds marketed by Stanford's firm. Some of Stanford's directors held prominant positions. Two were financial regulators: Fredrick Fram and Lena Stinson. They were both at FINRA! [I wonder if they are also related to Madoff's FINRA family members? Like the ones he used to cover up his $50B ponzi scheme.]

So it's bad enough these guys continue to perpetuate fraud with innocent money. But even worse is the fact that people at the top of these schemes are politicians/elected officials/regulators that are supposed to protect our interests, right?. Wait, you mean centralized unchecked power yields corruption?

DO YOUR OWN RESEARCH AND SEE WHAT'S REALLY GOING ON.

References:
http://www.stanfordfinancial.com/sir_allen
http://www.huffingtonpost.com/2009/02/24/allen-stanford-had-links-_n_169361.html
http://www.reuters.com/article/allenStanford/idUSTRE51N5RO20090224

Law Schools with FREE TUITION!!!!

Yes. There are eight law schools that do NOT charge a dime for law school, or room and board!! Okay, for some you might need to work in the school's cafeteria, or perhaps live 45 minutes from the nearest hospital, i.e. Deep Springs Law in CA. Even still. What luxuries do most law students really have? Most are not spoiled (like living 20 mins from campus in a rent free 6 bedroom w/ a dive pool, jacuzzi and 7 cars). So the opportunity cost to attend 3 years tuition free, assuming bar passage, is really not high at all. Most law students would go head over heels for such an opportunity. Take the new tuition-free UC Irvine Law. Dean Erwin Cherminsky is a notable Constitutional Law scholar. If he's dean, the school likely has stellar credentials. UC Irvine's first admitted this fall class size = 60. And apparently they will be ranked in the top 20. Sounds like a good deal.

Reference: http://blogs.static.mentalfloss.com/blogs/archives/22573.html

Agency Heads + Bribes?

It's no coincidence that Leon Panetta, nominee to head the CIA, happened to collect over $700,000 in bribes (a.k.a. consulting fees?).

Why do that? This is a position that empowers him to decide which government contractors get our tax money to perform "national security work." So wait, you mean to say contractors that have material pecuniary interests in government's contracts can pay "fees" to get contracts? That's interesting. In legal ethics that's called a CONFLICT OF INTEREST . A conflict so material and substantial to the interests of representation that every state bar would sanction. The ethical rules that apply to the regulation of lawyers is a great analogy because like Federal civil servants, we represent people. Ask yourself why we have the Office of Government Ethics and also the General Accounting Office. Might it be possible (and highly probable) that positions of power yield self-interested results?

Federal civil servants take an oath. Remember that oath? Read below (pay attention to the bold words) :

I, [name], do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.

Good 'ole fashion American corrupt-capitalism permeates democracy. Let's just admit it. Browse the real headlines and do your own research.

Reference: http://online.wsj.com/article/SB123378062602049003.html
http://www.opm.gov/constitution_initiative/oath.asp