Recently, there has been a lot of discussion about the Standard & Poor downgrade of Russian bonds. But, does it really matter? What do credit ratings of bonds even mean? Let’s start with the basics. What is a bond? Bonds are a form of loan, which are a form of debt.1 To create a bond,…
Year: 2015
National Attempts to Impose Sales Taxes on Online Retailers
Currently, there is no federal scheme in place that allows states to enforce their sales tax for online purchases. Because of this, many argue that there is a large competitive advantage for online retailers who are not required to pay these state sales taxes over their storefront counterparts.1 In an attempt to harmonize existing…
Delays in the Volcker Rule
The Volcker Rule was introduced in 2010 as one of the key backbones to the Dodd-Frank Act1 The rule was to prohibit banks from engaging in speculative trades and certain investments, a well-known cause to the financial collapse of 2007-2008 (Id.) However, the implementation of the Volcker Rule was recently delayed again until 2017, as…
Restoring the Luster to McDonald’s Golden Arches
McDonald’s remains mired in its worst sales slump in more than a decade.1 Revenue in the quarter ending on December 31 fell by 7% to $6.6 billion, while earnings dropped 21% from $1.4 billion to $1.1 billion in the same period a year ago.2 A major factor behind McDonald’s woes is the changing tastes of…
Is Yik Yak Next?
Yik Yak, the anonymous messaging app sweeping college campuses nationwide, recently announced that it has closed a $62 million round of financing led by Sequoia Capital. Mike Isaac,1 This was the messaging company’s third round of venture funding in the past seven months, bringing its total funding raised to approximately $73 million.2 While to outsiders…
Yet Another Lawsuit is Filed Stemming From Mortgage Servicer Actions During the Foreclosure Crisis
Large financial institutions servicing mortgages encountered extensive criticism for their handling of the housing crisis. That criticism has manifested itself in the form of major lawsuits, some of which have ended with high profile, expensive settlement agreements.1 The most recent innovative attempt to hold these servicers accountable for alleged improper acts in the foreclosure process…
Volcker Compliance: Spirit vs. Substance
Wall Street is innovative, well known for continuously developing new ways to make money through the financial markets. In the early 2000s, Wall Street innovations allowed more Americans to become homeowners than ever before. Those same innovations allowed the negative effects of the bursting housing bubble to permeate the entire financial system. In the present,…
Ramping Up Corporate Compliance
Corporate compliance has become an increasingly prominent area of law. The regulatory state has grown to unprecedented heights creating more regulations, which in turn has led to more violations, and higher corporate costs. For example, in 2013, J.P. Morgan agreed to a settlement with the Justice Department for a staggering $13 billion for various regulatory…
Detroit Bankruptcy: Lessons Going Forward
On July 18, 2013, the city of Detroit, Michigan declared bankruptcy.1 The city’s debt stood at $18.5 billion, more than four times greater than any other municipal bankruptcy since the modern bankruptcy code was adopted by congress.2 Despite the magnitude of the economic and social impacts of municipal bankruptcy, the topic is not diffusively understood….