Nissan May Or May Not Have Been Investing In Multiple Ghosns

Allow us to introduce you to Beauty Yachts, Shogun Investments and the potentially delightfully ironically-named Good Faith Investments.

Meek Mill’s Legal Woes Are Over, But He Says The Struggle Must Go On

Meek Mill

It’s important that we now channel our energy into helping the millions that are unjustly trapped in our criminal justice system.

–Meek Mill after a plea deal with Philadelphia prosecutors officially ends his unfortunate entanglement with the criminal justice system. After earning a new trial earlier this summer, prosecutors finalized a plea deal where the rapper admitted to a minor gun charge and all other convictions were dropped and his record cleared. But in a Tweet, Meek Mill implores the forces that supported the “Free Meek” movement to keep fighting for others.

The Religious Right Is Leading Us Off Valuable First Amendment Rails

Extending First Amendment protection against compelling citizens to endorse ideas they find objectionable appears to depend primarily upon whether the idea or objection falls within Christian doctrine.

Almost a year ago, I pointed out that modern religious liberty doctrine is grossly unbalanced in a way that favors religion, the Christian religion in particular, at the great expense of everyone else’s free conscience protection. Unfortunately, in the time since I wrote that piece the unbalance has rapidly increased. Indeed, the last year has made it painfully obvious that the single greatest factor for determining the result in any free conscience objection case is whether the objecting party is doing so because of their Christian faith. Moreover, if your free conscience objection against government compelling citizens to pay for or otherwise endorse ideas they find objectionable is based on an opposition to government compelling an overtly Christian idea, your free conscience objection is guaranteed to lose.

This current state of affairs in free conscience liberty doctrine meant it was rather easy for me to successfully predict the result in The American Legion v. American Humanist Association case, otherwise known as the Bladensburg Cross case. All one has to do in order to become a free conscience case prophet is rely on the premise that a majority of this current United States Supreme Court will never side with a party making a free conscience objection to any government assessment that forces all citizens to pay for or endorse overtly Christian ideas, monuments, organizations or expressions. In the Bladensburg cross case for example, two members on the Supreme Court, Justices Neil Gorsuch and Clarence Thomas wrote separately in a concurrence declaring that the non-Christian parties did not even possess standing for relief. Why? Well, according to Justices Gorsuch and Thomas, the mere individual objection to the government forcing citizens to finance, maintain, and therefore otherwise promote a giant Christian cross is insufficient to sustain an injury-in-fact under the First Amendment. 

I tried to make clear at the time, the conclusion reached by Justice Gorsuch’s and Thomas’ concurrence that no injury existed in the Bladensburg case flew in the face of the Court’s First Amendment jurisprudence established just the year prior in Janus v. Am. Fed’n of State, Cnty,, & Mun. Emps., Council, and was rather notably joined by both Justices Gorsuch and Thomas. Per my piece:

In the Janus case….a citizen was objecting to the government (in the form of public sector unions), forcibly extracting money to pay for the promulgation of political speech the citizen disagreed with. In that case, the Court focused not on the mere offense of the individual with the particular beliefs being expressed, but rather on the fact that the government was forcibly extracting money from the citizen to pay for promulgation of the beliefs. Had the Court focused on the issue of forced extraction in the Bladensburg case, it would undoubtedly have reached the same conclusion as it did in Janus, which, of course is why it ignored the issue.

To be clear, I wholeheartedly agree with the decision in Janus, such forced extraction by the government to convey beliefs, either political or religious, is unlawful to any fair reading of the First Amendment. However, what makes the Janus decision even more remarkable when compared to the Bladensburg case is that Janus was decided based on original principles of religious freedom. Yet, just a year later, and faced with a case of citizens objecting to the power of the state to extract money in order to promulgate religious speech/beliefs — you know the kind of objection that original religious freedom was based upon — the Court refuses to apply the original religious freedom analysis it applied in Janus. Instead, the Court engages in a transparently biased selective historical analysis to reach an absurdly obvious preferred conclusion that favors religion over non-religion.

In further retrospect, the Janus opinion appears to be unique in that its set of facts dealing with compelled support of public sector unions is the only set of facts that has been granted the same type of free conscience protections one only sees in First Amendment cases involving Christian free conscience objections. Outside of the narrow facts in Janus and ideas that only Christians object to, the concept of free conscience liberty against government coercion is routinely disregarded. In point of fact, in cases such as Bladensburg where the free conscience objection is being made by parties who are secular or non-religious against government forcing them to endorse overtly Christian ideas, you will find open judicial scorn and ridicule at even the concept of extending First Amendment protection.

I might sound biased or paranoid to you but a recent decision by the Eighth Circuit currently being touted by members of the Christian right lends a lot of credibility to my assessment of the current state of religiously selective affairs when it comes to free conscience liberty. To put this decision in proper context it must be pointed out that just last year, a three-judge panel of the very same Eight Circuit held that forcing all objecting non-religious people — who explicitly reject a belief in any deity — to use currency that conveys upon them a belief and trust in God in order to participate in commerce does not violate the First Amendment. In fact, that same Eight Circuit stated there was no semblance of government coercion over the non-religious party’s beliefs whatsoever.

Now, my fellow Americans, compare that conclusion to a free conscience case decided last week where the same Eighth Circuit found that a Christian party’s beliefs were violated by a legislatively established state condition on commerce, drawn upon a judicially recognized legislative power upheld by layers and decades of precedent, that mandates one cannot discriminate against homosexuals in commerce. Make the comparison between these two free conscience cases objectively and you will find there is clearly only one consistent principle at play here, and it is not a healthy respect for the free conscience objections of all individuals.


Tyler Broker’s work has been published in the Gonzaga Law Review, the Albany Law Review, and is forthcoming in the University of Memphis Law Review. Feel free to email him or follow him on Twitter to discuss his column.

Verifying Accredited Investors in a Rule 506(c) Offering

Companies raising capital that are relying on Rule 506(c) (often informally called “Accredited Investor Crowdfunding”) for their offering of securities have several options as to how to verify whether their investors’ are indeed “accredited investors.” Since most offerings of securities generally rely on Rule 506(b) which allows for the investor to self-verify (e.g., through a simple questionnaire), founders are not as familiar with the verification process of Rule 506(c). This post will briefly explain Rule 506(c) and describe some of the options companies have to verify its investors as accredited investors.

Generally, Rule 506(c) provides an exemption from registering an offering of securities when the company issuing securities (usually called an “issuer”) only sells securities to accredited investors (previously defined here) and the issuer takes reasonable steps to ensure that each purchaser is an accredited investor. The benefit of Rule 506(c) compared to Rule 506(b), is that, under Rule 506(c), an issuer may generally solicit potential investors, which allows issuers to engage in a variety of public solicitations, such as internet postings, presentations at conferences, or other forms of advertisement. Under a Rule 506(b) offering, engaging in any such activity could result in a loss in the ability of the issuer to rely on the exemption.

The biggest hurdle to using Rule 506(c) successfully is usually complying with the requirement to take “reasonable steps” to verify each investor’s status as an accredited investor. The most straightforward way to meet this requirement with any particular investor is to use one of the enumerated methods provided in Rule 506(c) (often called a “safe harbor”). If the issuer uses one of those methods, the issuer will be deemed to have taken reasonable steps to verify the investor’s status as an accredited investor. Broadly speaking, there are three ways to fit within a safe harbor to Rule 506(c), with the following generally illustrating these safe harbor requirements1:

  • if the accredited investor status is based on income, the issuer would need to review IRS forms (excluding certain forms for foreign investors) that show the investor’s income for the two most recent years and obtain a written representation that the investor has a reasonable expectation of reaching the required income level during the current year.
  • if the accredited investor status is based on net worth, the issuer would need to review certain documents evidencing the investor’s assets and liabilities, dated within the past three months, (including a consumer report with respect to liabilities) and obtain a written representation from the investor that they have disclosed all liabilities necessary to make a determination of the investor’s net worth; or
  • regardless of whether the accredited investor status is based on net income or net worth, the issuer may obtain written confirmation from an individual (e.g., attorney, CPA, or others specifically listed in the rule) that such person has taken reasonable steps to verify that the investor is an accredited investor (based either on net income or net worth) within the prior three months and has determined that such investor is an accredited investor.

But, practically speaking, how does an issuer fit within one of these safe harbors and thus, comply with Rule 506(c)? There are essentially three approaches: (1) the issuer itself can verify each investor’s status, (2) the investor’s accountant, lawyer, or another professional can verify the investor’s status, or (3) the issuer can hire a third-party verification service to verify each investor’s status.

At first glance, verifying investors yourself may seem like the easiest path. However, in practice, numerous issues may arise which can divert resources away from important aspects of an issuer’s business. Appropriate due diligence will need to be exercised to ensure that the correct documents were reviewed and that the review indeed establishes that the investors are accredited investors. Issuer’s counsel would usually perform this task. But often complications arise. The investors may be resistant to providing the documentation needed. For example, an investor may not want to disclose its tax returns for the past two years or submit to a credit check to verify its liabilities. Or, the investor’s net worth may stem from its ownership in a business which is very difficult to value without an appraisal (and it’s almost certain an investor will not pay for an appraisal just so they can invest in your offering).

Other difficulties occur when an investor is an entity. An entity is an accredited investor when either (i) all of its equity owners are accredited investors or (ii) its assets exceed $5 million and the entity was not formed for the specific purpose of investing in the issuer. In this situation, the issuer would then need to either (1) follow the above safe harbors for each equity holder or (2) verify the entity has over $5 million in assets (and obtain a representation that the entity was not formed for the specific purpose of investing in an issuer).

The two alternatives to an issuer verifying its investors’ accredited investor status itself provide much easier solutions for a busy entrepreneur. The first alternative is requiring an investor to provide a letter from his or her accountant or lawyer (or other professional) which makes the representation that the professional has taken reasonable steps to verify the investor’s net income or net worth and that the professional has determined that the investor is an accredited investor. The second alternative is the issuer could outsource all verification to a third-party verification service. This would entail contracting with a third-party verification service to obtain and review the information needed from potential investors and verifying each investors’ status. The added benefit of either option is that these third-parties make the representation that they have taken reasonable steps to verify the investors’ status in compliance with Rule 506(c). Thus, the issuer has shifted the burden of taking “reasonable steps” to a third-party.

As you can see from a few brief examples, while Rule 506(c) has distinct advantages, the verification process can prove difficult. Before deciding to pursue an offering in reliance on Rule 506(c), you should consult with your attorney.


Footnotes

  1. Although these are not the only methods to verify accredited investor status, rarely would an issuer want to stray from using these safe harbors.

This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

What Consumer Tech Can Tell Us About The Future Of Legal Tech

If you spend any time at all online, you have almost certainly experienced a form of data targeting. You know the drill: you log onto your Amazon account to search for an item you want to buy, and less than ten minutes later, that item and items like it are showing up in the sidebars of other websites you’re browsing. A half hour after that, you’re seeing ads at the top of your personal email inbox for the same merchandise. It’s not a coincidence — it’s the result of targeting technology from consumer sites that can track your searching and purchasing behaviors, actively trying to get to know your preferences in order to better serve you content that you are likely to consume or purchase. If you’re not expecting this sense of “connectivity” between vendors, the experience may seem annoying or even downright creepy depending on the context.

When targeting works well though, it provides an amazing sense of convenience and reduces the overall work required by the consumer — sometimes even driving to a better outcome. Imagine booking airfare for a weekend getaway and then having an offer for a great hotel deal (that you otherwise would not have found) show up in your inbox. Fewer mouse clicks, information that you need at your fingertips, and an optimal outcome. Sounds much like the holy grail of knowledge management to me.

The mechanisms that make this possible are similar in form — albeit, more sophisticated — to some of the technologies we have discussed in this column before. AI tools, specifically machine learning and data analytics, are two common technologies used by marketers and content providers to analyze information and deliver content at the right moments to the right audiences. A wide range of online consumer content, from the product suggestions you get on Amazon to the movie recommendations you see on your Netflix account, are generated by algorithms that have identified commonalities in your search history and preferences.

Many of the technologies that we enjoy today — the Internet, mobile phones, and GPS to name a few — rose out of military investments as part of the Cold War. The trend I think we will increasingly start to see is the consumer marketplace (which seems worlds ahead of the business marketplace) start to influence the business-to-business (B2B) market. In recent years, AI tools have become more common and ingrained in B2B technology — including legal content and solutions. As specific use cases for these technologies become more developed and more widely used, I believe that there are some trends that we’re likely to see in B2B tech moving forward — and with those trends, there are lessons that the B2B community can learn from the consumer tech world as well.

Using Algorithms for Recommended Content

When you conduct a search for a product on Amazon, the site uses an algorithm to learn about you and your customer journey based on the items you search and the keywords you use. This same mechanism could become a tool for technology providers to find recommended content for their users – including attorneys. An attorney managing a $1B deal in the health compliance space might find it useful to have recommended news stories and resources served to her on her dashboard based on her search history. We already know that algorithms can be built to do such a thing — and if applied in a legal tech platform, it could prove to be a useful tool for legal professionals.

Demographic Data

If you use streaming sites like Hulu, Spotify or Pandora, you’ve probably come across one or two recommendations that, from your point of view, make absolutely no sense based on your preferences. This is probably because a) the algorithm hasn’t been that well trained yet, or b) your preferences range so widely that it’s difficult for the algorithm to identify recommendations for you accurately. For situations where the behavioral data is not sufficient to get a good “fit” with customer preferences, demographic data can fill the gap. In the legal context, it’s helpful to know who the attorneys / researchers are, what their area of specialty is, and (potentially) who their clients are / what matters they are actively working on. This data, when combined with behavioral data, can help to refine search / recommendation results.

Security Obligations

As mentioned above, the tracking ability of consumer sites can be alarming for many people — particularly as vendors get aggressive in collecting additional demographic data for each of us. The nature of many white collar professionals’ work — and especially that of legal professionals — is often very sensitive, and as such, tech providers should be mindful of their obligations to their clients from a privacy standpoint. Providers could look into making auto-generated recommendations something that could be enabled or disabled, based on their individual clients’ comfortability with that kind of feature.

Consumer sites continue to develop AI tools that not only harness large amounts of data, but also make that data actionable. We may not see these trends moving into B2B tech overnight, but the foundation has already been laid for B2B tech tools to reach new levels of sophistication. As AI becomes more embedded in the fabric of legal technology, tech innovators could learn a thing or two from what’s already out there.


Dean E. Sonderegger is Senior Vice President and General Manager of Wolters Kluwer Legal & Regulatory U.S., a leading provider of information, business intelligence, regulatory and legal workflow solutions. Dean has more than two decades of experience at the cutting edge of technology across industries. He can be reached at Dean.Sonderegger@wolterskluwer.com.

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Court Rules Candidate Probably Tried A Racist Trick To Win An Election, But It’s Fine

It turns out, nobody actually gives a crap about the integrity of our electoral process. Not the President. Not the Congress, either chamber. Not the media. Not Facebook or Twitter. And, it turns out, not the courts.

We know that the 15th Amendment has never meant anything to the Supreme Court. We know that the courts will allow voter suppression under the guise of “voter ID” laws. We know that John Roberts has incredibly ruled that gerrymandering is a non-justiciable issue. But even when the courts catch somebody in the act of manipulating an elections, they don’t care. Nobody cares.

Michael Madigan is the Speaker of the Illinois House of Representatives. He’s the longest serving state or federal leader in the entire damn country. He’s an old-school, machine politics Democrat, the kind I’d like to believe that God sent Alexandria Ocasio-Cortez to Earth to destroy.

Over time, the demographics of his Southwest Chicago district have changed. It’s now 70% Latino, which is different from when he first won the seat in 1971. In 2016, he got a primary challenge from Jason Gonzales. Gonzales was a political consultant with degrees from Duke, Harvard, and MIT, running his first campaign. Gonzales alleges that soon after he announced, two additional Latino candidates also announced primary challenges: Joe Barboza and Grasiela Rodriguez. Thing is, neither Barboza or Rodriguez actively campaigned for the seat. Gonzales alleges that the two were planted by Madigan to dilute or split the Latino vote in the district.

Madigan beat Gonzales by about 10,000 votes, the other two Latino candidates combined for around 2,000 votes. Mathematically, they were not dispositive in the outcome.

Still, Gonzales sued, because putting fake candidates on the ballot to dilute the minority vote is surely not how representative democracy is supposed to work.

The district court in Illinois AGREED with Gonzales, that there was significant evidence that Madigan orchestrated the placement of additional Latino candidates on the ballot to hurt Gonzales. The district court simply determined that it didn’t care. From Courthouse News:

[U.S. District Judge Matthew Kennelly] found substantial support for Gonzales’ claims.

“A jury could reasonably conclude that individuals closely tied to Madigan’s campaign manager convinced Barboza and Rodriguez to enter the race — against Madigan. … This evidence supports a reasonable inference that Madigan authorized or at least was aware of the recruitment effort,” Kennelly wrote.

He continued: “A reasonable jury could find that Barboza and Rodriguez’s purported candidacies for Madigan’s office were orchestrated by Madigan’s associates, working on Madigan’s behalf.”

But Madigan’s dirty tricks were not a secret from voters. On the contrary, Gonzales’ campaign focused heavily on Madigan’s deceptive tactic: that Madigan placed sham candidates on the ballot in an effort to keep his seat.

“This publicity placed the alleged misconduct squarely within the political realm, enabling voters to rebuke Madigan by electing his challenger. Instead, Madigan prevailed by a substantial margin,” Kennelly ruled.

I find this to be a consistent problem with judicial opinions about electoral integrity that I don’t like: courts refuse to punish electoral wrongdoing on the theory that voters knew about the wrongdoing when they went to the polls.

The “informed voting public” is a legal fiction. Voters are ill-informed. Even when you try to inform them, we live in a world choking on so much fake news that we can’t even agree on a common set of “facts.” Refusing to punish candidates or campaigns for electoral shenanigans is an INVITATION for unethical campaigners to engage in more shenanigans.

Michael Madigan didn’t even GET a primary challenger in 2018. Let me say that again: this 77-year-old white man who has been in office for 48 years and represents at district that is 70% Latino DIDN’T GET A PRIMARY CHALLENGER IN 2018 DURING A PROGRESSIVE WAVE YEAR! That’s not a fucking compliment. It’s an indication that the Chicago machine is still plenty strong enough to snuff out opposition. What the hell good is an informed voter if the system allows powerful incumbents to silence dissent? Or, as Agent Smith might say, what good is a phone call if you are unable to speak?

Chicago politicians have been doing this for a long, long time. Maybe next century courts will finally decide to do something about it, cause they’ve dropped the ball on the last two.

Dirty Tricks Don’t Change Illinois Election Result [Courthouse News Service]


Elie Mystal is the Executive Editor of Above the Law and a contributor at The Nation. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.

Live From ILTACON Part II: Developments In Legal Technology

The sentiment across the legal technology community is that this year’s ILTACON was a smashing success. More than 1500 members and 1700 exhibitors attended the conference in Orlando this year. Their vibe was energetic and people were definitely in good spirits.

The need for and growth of technology continues and that’s ultimately why we were there. We spent time in the exhibit hall and demo rooms talking to companies in the legal technology space to identify what’s new and interesting. Below, again, in no particular order, is our second installment.

Knovos, which provides legal information management solutions, announces the development of Knovos Academy, an interactive certification and training program. The curriculum and instructional approach offers the latest in microlearning, just-in-time and scenario-based learning, with a focus on client-specific workflows. “Continuing the innovation and development of our solutions over 16 years, Knovos Academy provides an engaging training experience that enables clients to quickly benefit from our advanced functionalities,” said Knovos CEO Dharmesh Shingala. With customizable courses, interactive videos and instructor-led, self-directed and blended delivery methods, Knovos Academy optimizes the learning experience for legal professionals. Users can select from a full series of product and role-based training programs for each of Knovos’ solutions: eZReview, eZManage, nayaEdge, Cryptacomm, Arbicomm and Cascade. To learn more or schedule training, visit their site.

Disco announces their new AI-powered managed review offering and promises 60 percent faster review outcomes compared to other review platforms. Hot on the heels of IDC Marketscape naming the company a leader in the e-discovery market for cloud-based platforms, Disco recently used some of a recent $83 million capital infusion to invest in a new 100+ seat review center in Austin, TX to provide a managed TAR service that promises at least 88 documents per hour, per reviewer. They use continuous active learning in the Disco platform to consistently push relevant documents to reviewers, thus making the review more efficient. Chief Innovation Officer Catherine Casey told me that for every managed review project Disco has undertaken “they have estimated the cost of the review up front and delivered below budget every time.”

Disco now also features a new self-service offering called Disco for Enterprise that enables users of the platform to rapidly upload and ingest ESI into the platform. Ms. Casey boasts that Disco ingests up to 4 terabytes per day. And even better, while the files are being ingested, they are processing in parallel, which means they are quickly available for review.

Primer, a San Francisco based machine intelligence company, has been quietly building a brand for a couple years. Born out of three-letter organizations in Washington, D.C., Primer is poised to supercharge discovery and legal business development with machines that read and write. Within a few minutes of sitting down with Jon Kerry Tyerman, Primer’s VP of Business Operations, it was easy to discern the utility of the software.

Primer is expanding into the legal market with products that have been deployed and tested by the US intelligence community and a Fortune 50 global retailer. First, whereas most e-discovery products today require that machine learning models be built from scratch with each new matter, Primer uses a transfer learning approach that enables every model to be transported and used from one dataset to another, delivering instant insight into the most relevant data.

Primer’s second product debut is an automatic document summarization technology. It is difficult for lawyers to remain abreast of events that impact their clients, so Primer removes the bottleneck by organizing, analyzing, and summarizing real-time news from millions of sources, synthesizing the data, and drafting a briefing memo summarizing its findings. Primer’s proprietary Natural Language Generation technology also lends itself to a variety of other legal use cases — from summarizing documents in a DMS or litigation database to automatically generating matter narratives both during and after the close of a case.

Luminance introduces a full-fledged e-discovery workflow to their platform. Many people know Luminance as the M&A due diligence, compliance and contract management tool that uses machine learning to speed contract review and comparison. Now they offer an e-discovery solution designed to assist litigators in reviewing and coding documents in discovery. It’s refreshing, too, to have a women-run company in the legal tech space.

Other Developments

Meetings with several other companies during ILTACON yielded little nuggets of information. Many companies are well-known, while others are toiling along doing the good work of e-discovery. NexLP, led by CEO Jay Leib, continues to grow their AI-powered Story Engine software that enables users to derive actionable insight from data. I also chatted briefly with Andy Reisman, CEO of Chicago-based Elijah, the digital forensics, cybersecurity and IT company. Andy’s got a slew of awards and 20,000 hours of forensics expertise. Everlaw is another cloud-based e-discovery platform that is doing some creative things with pricing models and offers top-notch support.

Finally, word is that in the wake of last week’s Live from ILTACON article I overlooked other developments and companies. Of course, that’s a fair criticism. But the truth is we cannot possibly cover all the developments of all the companies exhibiting at ILTA. If you have an announcement about a new technology development, feel free to reach out to me.


Mike Quartararo

Mike Quartararo is the managing director of eDPM Advisory Services, a consulting firm providing e-discovery, project management and legal technology advisory and training services to the legal industry. He is also the author of the 2016 book Project Management in Electronic Discovery. Mike has many years of experience delivering e-discovery, project management, and legal technology solutions to law firms and Fortune 500 corporations across the globe and is widely considered an expert on project management, e-discovery and legal matter management. You can reach him via email at mquartararo@edpmadvisory.com. Follow him on Twitter @edpmadvisory.