Funds Talk: April 2018

Topics covered in this issue include: 

• SEC Goes Mining: Launches Cryptocurrency Industry Sweep
  In the latest development in the regulator’s growing oversight of virtual currency transactions, the SEC has indicated that enforcement action may  be expected.
  

   

• The Rise of Direct Lending Across Europe
  Direct lending in the EU is catching up to the U.S. market, with investment funds and insurance companies leading the way with the assistance of recent regulatory inducements.

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• Small Business Credit Availability Act Becomes Law
  On March 23, 2018, President Donald Trump signed into law the Consolidated Appropriations Act of 2018, which contains as Title VIII thereof the Small Business Credit Availability Act. The Small Business Credit Availability Act, among other things, significantly increases the amount of debt that business development companies (BDCs) may incur..
  

   

• REITs and Their Shareholders Stand to Gain Under New Tax Law
  

  In their article “REITs and Their Shareholders Stand to Gain Under New Tax Law,” which appeared in the March 2, 2018, issue of Commercial Observer, Tax partner Barry Herzog and associate Rita Celebrezze D'Souza break down the impact of recent tax reform on REITs. Despite potential detriments to REIT value, REITs stand to gain overall as a result of tax reform, creating new advantages for them and their shareholders.
  
  

• Paying the Price for Reps and Warranties Breaches
  

  Because the law grants courts substantial latitude in crafting damages awards in litigation resulting from breaches of representations and warranties, economists and other experts are exploring new ways of calculating the damages in such disputes — which will become more common as M&A activity accelerates.
  
  

• DOJ Criminal Division to Use FCPA Corporate Enforcement Policy as Nonbinding Guidance
  

  On March 1, 2018, John P. Cronan, the acting head of the Department of Justice’s Criminal Division, and Benjamin Singer, chief of the Fraud Section’s Securities and Financial Fraud Unit, announced at the American Bar Association’s 32nd Annual National Institute on White Collar Crime that the Criminal Division will use the Foreign Corrupt Practices Act corporate enforcement policy as nonbinding guidance in criminal cases outside the FCPA context.