FINRA Rule 2210 - It is Finally Here.

FINRA Rule 2210 - It is Finally Here. By Chuck Lowenstein, Senior Editor, Securities On Monday, February 4, 2013, member firms and their representatives enter an entirely new world of regulations regarding Communications With the Public. That is the day that the new FINRA Rule 2210 takes effect. This post will try to explain, in plain English, the basic changes and how they will affect any student planning on sitting for a FINRA exam on which the topic is covered. This is not a complete explanation – for that, refer to the blog specific to the course you will be… View the full article FINRA Rule 5123 – Providing Additional Investor Protection for Private Placement By William R. James, Senior Securities Editor This fairly straightforward rule went into effect December 3, 2012. I say straightforward because this rule may seem oddly reminiscent of what the SEC has been trying to do all along. It seeks to ensure that investors in private placements are provided with detailed information about the intended use of offering proceeds, the offering expenses and offering compensation. So in order to make it more likely that this goal is reached, each FINRA member that offers a security in a private placement must do one of two things: submit to FINRA a copy of any PPM, term sheet or any other offering document including any amended versions within 15 calendar days of the date of the first sale or, indicate to FINRA that no such documents were used. What’s nice about this 15 calendar day requirement is that it dovetails the filing requirement for issuers of Reg D securities! As you can see from item second bullet above, not all offerings may be required to have a PPM. There are plenty of exemptions. See the Kaplan Series 24 blog site for additional details. http://www.kfeducation.com/blog/detail/sec/2085

The mechanic's lien discharge bond: What it is, and what it does

The mechanic's lien discharge bond: What it is, and what it does The primary reason for obtaining a mechanic's lien discharge bond is to remove the lien, and its accompanying headache, from the property. The key thing to remember is that bonding a mechanic's lien does not get rid of the lien. The name of the bond-a mechanic's lien discharge bond-causes a lot of confusion to those unfamiliar with the intricacies of the Lien Law. The discharge bond does not extinguish the mechanic's lien; it discharges the lien in the sense of removing it from the property. The lien itself remains alive and well. A bond to discharge a mechanic's lien serves one simple and particular purpose: it removes the mechanic's lien from a parcel of real property and, in essence, the mechanic's lien then attaches to the bond until it is vacated, satisfied or expired. Pursuant to Lien Law § 19(4), a mechanic's lien may be discharged by posting a bond equal to 110% of the face value of the lien. This answers one of the most common questions in the bond process: how much does it cost to bond a mechanic's lien? The answer is that it always depends on the amount of the lien, but always will require at least 110% of the face value of the lien. It does not matter what surety issues the bond; they all must issue a bond for 110% of the face value of the lien. The only area where the bonding cost can vary is in the premium that the surety charges the principal for the bond. The premium is based upon several factors, including the amount of the lien. While just about any insurance company licensed and authorized to conduct business in New York can issue a mechanic's lien discharge bond, there are certain sureties that specialize in this area and, therefore, are more familiar with the process. Most bonds can be paid for in one of two ways: cash or a letter of credit. Obviously posting cash moves the process along more quickly. This is because there is little risk to the surety as they are literally collecting the entire amount first and then holding it until the mechanic's lien is discharged. On the other hand, securing the bond with a letter of credit usually extends the process and the surety may be very selective in banks from which it will accept a letter of credit. Something to keep in mind is that the surety will require the principal to defend and indemnify it in any action that is brought to enforce the lien. After the bond is issued it is served upon the lienor and filed with the county clerk where the mechanic's lien was recorded. Some counties, including New York, will require the purchase of an index number and submission of an attorney affirmation requesting the discharge of the mechanic's lien. Once recorded, the bond now takes the place of the property and the mechanic's lien is no longer an encumbrance on the title. The mechanic's lien, having been removed from the property, is now attached to the discharge bond. Despite the bond, the lien will expire by operation of law in the same manner as it would expire against the property. Upon expiration, some sureties will require a court order explicitly cancelling and vacating the mechanic's lien before they release the bond collateral back to the principal. Other sureties will discharge the bond upon receipt of a letter from the attorney for the bond's principal stating that the time to foreclose upon the lien has expired and that no lien foreclosure action has been commenced. A mechanic's lien that has been bonded can be foreclosed upon in generally the same manner as a lien that has not been bonded. Notably, if a mechanic's lien has been bonded the owner is no longer a necessary party (Lien Law §44-b). But the surety that issued the bond is now usually named as a party, as is the principal under the bond. One important distinction is that no lis pendens is filed in connection with a foreclosure action upon a lien that has been bonded. Other than these differences, an action to foreclose upon a mechanic's lien that has been bonded will generally follow the same course as a lien that was not bonded. Most importantly, the lienor must still establish that its mechanic's lien was valid before recovery can be achieved and the owner has not waived any defenses by bonding the lien. Vincent Pallaci is a partner in the New York law firm of Kushnick Pallaci, PLLC, Melville, N.Y.

The paralegal’s role in blue sky securities laws.

Blue Sky Forecast The paralegal’s role in blue sky securities laws. By Daniel P. McAndrews November/December 2005 Table of Contents “Blue Sky” is a term that brings a smile to most people’s faces with thoughts of sunny days and good weather ahead. However, to most corporate paralegals, it brings a look of horror to their faces. Why? One reason might be that, instead of contacting, researching and filing documents with one judge, one court or one governmental authority for a single matter, the paralegal could potentially be forced to contact, research and file documents with 50 states for one single offering of securities by a corporation, limited partnership, limited liability company or other entity. There are many variables that determine the number of states involved and the amount of work involved. The History of Blue Sky In 1911, Kansas became the first state to enact a comprehensive state blue sky securities law in response to its residents being taken by salesman selling worthless securities of fly-by-night corporations. Through this law, corporations were required to register their securities and the individuals who sold their securities with the Office of the Securities Commissioner in full detail before they could offer or sell in Kansas. By enacting this law, state residents gained additional protection because the Kansas Securities Commissioner reviewed the offering of securities, the corporation and the people selling the securities before any consideration was exchanged. The protection of purchasers is the fundamental purpose of state blue sky securities laws and the main reason corporate and securities paralegals work on blue sky filings in various states. Following Kansas’ lead, the other 49 states passed similar state blue sky securities laws to protect their residents. The laws at the time attempted to create a level playing field for issuers and purchasers. Eighteen years after the first blue sky law was passed, the great stock market crash of 1929 occurred, followed by the Great Depression. In response to these two events, an increased number of scams and lack of information about investments, the Securities Act of 1933 (the ’33 Act) was enacted. A Securities and Exchange Commission was created in 1934 to administer the ’33 Act on the federal level. The SEC added another level of registration of securities to the state blue sky securities laws by providing additional requirements for corporations offering securities and those selling the securities. More than 60 years later, the states’ powers were severely cut back with the enactment of The National Securities Markets Improvement Act of 1996. NSMIA was enacted due to the states’ failure to uniformly regulate certain types of national securities offerings such as those securities listed or approved for listing on the New York Stock Exchange, American Stock and Options Exchange and the Nasdaq/National Market, and those offerings complying with Rule 506 of Regulation D under the ’33 Act. The states still have the ability to investigate and prosecute fraud for such offerings. However, corporations are not required to register with state securities administrators for the previously described offerings. Continue Reading Here Helpful Web Sites • U.S. Securities and Exchange Commission — www.sec.gov • North American Securities Administrators Association — www.nasaa.org • SECLaw.com, an online guide to securities laws — www.seclaw.com • Consumer Action Web site, State Securities Administrators — www.consumeraction.gov/security.shtml • Practising Law Institute — www.pli.edu Resources • A Brief History of Securities Regulation Wisconsin Department of Financial Institutions www.wdfi.org/fi/securities/regexemp/history.htm • Exemption from Securities Registration Under Rule 701 The National Center for Employee Ownership www.nceo.org/library/rule701.html • “Introduction to the Blue Sky Laws: Yes, there are 50 other securities regulators other than the SEC” by Richard I. Alvarez, Esq. and Mark J. Astarita, Esq. www.seclaw.com/bluesky.htm • Securities Act of 1933 Securities Industry Association www.sia.com/capitol_hill/html/securities_act_of_1933.html • Uniform Securities Act The National Conference of Commissioners on Uniform State Laws www.nccusl.org/nccusl/uniformact_summaries/uniformacts-s-usa2002.htm

IRS High-Tech Tools Track Your Digital Footprints By Richard Satran | U.S.News & World Report LP – Fri, Apr 5, 2013 10:47 AM EDT The Internal Revenue Service is collecting a lot more than taxes this year--it's also acquiring a huge volume of personal information on taxpayers' digital activities, from eBay auctions to Facebook posts and, for the first time ever, credit card and e-payment transaction records, as it expands its search for tax cheats to places it's never gone before. The IRS, under heavy pressure to help Washington out of its budget quagmire by chasing down an estimated $300 billion in revenue lost to evasions and errors each year, will start using "robo-audits" of tax forms and third-party data the IRS hopes will help close this so-called "tax gap." But the agency reveals little about how it will employ its vast, new network scanning powers. Tax lawyers and watchdogs are concerned about the sweeping changes being implemented with little public discussion or clear guidelines, and Congressional staff sources say the IRS use of "big data" will be a key issue when the next IRS chief comes to the Senate for approval. Acting commissioner Steven T. Miller replaced Douglas Shulman last November. [Read: Are You Taking the Right Tax Deductions?] "It's well-known in the tax community, but not many people outside of it are aware of this big expansion of data and computer use," says Edward Zelinsky, a tax law expert and professor at Benjamin N. Cardozo School of Law and Yale Law School. "I am sure people will be concerned about the use of personal information on databases in government, and those concerns are well-taken. It's appropriate to watch it carefully. There should be safeguards." He adds that taxpayers should know that whatever people do and say electronically can and will be used against them in IRS enforcement. IRS's big data tracking. Consumers are already familiar with Internet "cookies" that track their movements and send them targeted ads that follow them to different websites. The IRS has brought in private industry experts to employ similar digital tracking--but with the added advantage of access to Social Security numbers, health records, credit card transactions and many other privileged forms of information that marketers don't see. "Private industry would be envious if they knew what our models are," boasted Dean Silverman, the agency's high-tech top gun who heads a group recruited from the private sector to update the IRS, in a comment reported in trade publications. The IRS did not respond to a request for an interview. In trade presentations and public documents, the agency has said it will use a massively parallel computer system that can analyze data from different networks to find irregularities and suspicious activities. CONTINUE READING ARTICLE

Credit Scoring Products and Emerging Modeling Techniques:

Credit Scoring Products and Emerging Modeling Techniques: black box method no longer acceptable, consumers demand transparency Press Release: Global Information, Inc FARMINGTON, Conn., April 9, 2013 /PRNewswire-iReach/ -- The financial reputation of a consumer in the U.S. essentially boils down to his credit score. There are the well-known factors that most people know about – large amounts of bad debt, late payments, cancelled credit cards, and an overall lack of borrowing and payment history. Yet, the majority of consumers continue to remain in the dark about the statistical science that determines the 3-digit number labels that communicate our level of risk or financial credibility to lenders. While consumers do have access to credit bureau information, the actual credit decision data lenders use to generate credit scores are hidden in a web of complicated custom scoring models and scorecards for every distinct product line. The credit scoring process was basically one big black box. However, new regulations are changing the way financial institutions make credit scoring decisions as demand for transparency swells. Trends in Credit Scoring and Model Development New research from Mercator Advisory Group's report will help payments industry participants understand the basics of credit scoring and scoring model development, as well as the best practices and evolving methods being used by lenders and scoring vendors for deployment of scoring products. Report highlights include: Overview of the credit scoring model development and implementation life cycle; Review of the credit scoring products available for use by participants in the payments industry; Discussion of trends in consumer credit and credit scores in the United States; Commentary on expanding regulatory oversight of credit reporting agencies and scoring model owners; Examination of best practices and evolving methods for credit scoring and using credit scores, as well as supplemental and alternative data, in lending risk decisions. More information about this report and a free sample are available at http://www.giiresearch.com/report/mag268425-trends-credit-scoring-model-development.html Banks: Global Industry Guide See Also Study and Report by the Mercator Advisory Group New Mercator Advisory Service report explores scoring products and emerging modeling techniques Boston, MA - April 4, 2013. A report by Mercator Advisory Group presents research that will help payments industry participants understand the basics of credit scoring and scoring model development, as well as the best practices and evolving methods being used by lenders and scoring vendors for deployment of scoring products.

Position Your Credit to be Approved for a Loan!

Position Your Credit to be Approved for a Loan! Posted on April 4th, 2013 by Susan in Real Estate Investing Tips Most mortgage lending companies will ask you to allow them to “run” your credit, meaning they will request information on your credit from various credit rating agencies. RFG uses what is called a tri-merge report, which gives credit scores from three different credit reporting agencies. The scores are called FICO scores and the score is derived from several different factors. The exact method by which FICO comes up with a credit score is one of the great mysteries of the universe, but some things are known and other things suspected to be factors in the credit score formulation. Even the mere search for credit will impact your credit score as it means you are looking to borrow additional money, to the detriment of all of your existing creditors. Each dollar you owe means that you could be closer to defaulting on all of your credit. Different types of inquiries, however, can have a different effect. Credit checks for a consumer credit card will have the most detrimental effect on your credit score, as you are applying for credit that will presumably increase your liabilities over time. The more credit card type checks you have, the greater the detriment, because the presumption is that you may be taking on several new credit obligations. Therefore, if you intend to be shopping for a mortgage loan in the foreseeable future, resist the urge to obtain additional credit cards, which will almost always involve a credit check, lowering your score each time that credit check is run. In addition, once approved for the credit card, the potential of owing money on that credit card, even if unused, will further lower your score. Credit checks for automobiles and mortgages are viewed differently by the credit reporting agencies. Multiple credit checks for this type of loan are generally viewed as “shopping around” for the best rate, and will only lower your score the value of one credit check, provided they are done within a very short period of time, usually fourteen days. The logic behind this is that even through multiple lenders may check your score, you are only going to take out one mortgage or car loan at a time, not multiple loans. Therefore, if you are applying for secured credit, make sure to do so within a limited period of time, to avoid each inquiry by competing lenders from lowering your score. In addition, auto loans and mortgages are debts that are paid down over time, they do not increase or have “limits” like credit cards do. Therefore, it is presumed that if you have had an auto loan or mortgage loan for a significant amount of time, you are likely to continue paying that loan, as it is constantly decreasing. Accordingly, if applying for a mortgage loan, make sure that all of your payments on this type of credit are made ON TIME for at least six months before you apply for additional mortgage credit. Further, an important factor is compiling your score is your payment history. Late payments on both revolving consumer credit and mortgage loans will hurt your score, but late payments on mortgage loans will hurt your score more. One of the best ways to increase your score is to create a history of timely payments on all outstanding credit. Another factor that can be detrimental to your score is habitually using your available credit, either credit card or lines of credit to their maximum value. Credit raters view these types of borrowers as those who may not be responsible in handling their debt. The lower your utilization rate of available credit, the better off your score will be. If thinking about applying for a mortgage loan, make a concerted effort to pay down your outstanding credit to below your credit limits. Lastly, the credit score is affected by the different types of credit that a borrower may have. A borrower with only credit cards will score lower than the same borrower with credit cards, mortgage loan and auto loan, all paid on time over an extended period of time. These types of borrowers are deemed to generally represent less risk to lenders. Getting your credit into shape in order to be approved for a mortgage loan may take some time and strategizing but can be done. Now that you know the important components, get to work making your score as strong as possible, so you can move forward with your loan approval soon!

Income Property Analysis 101 – Everything Real Estate Investors Need To Know

Income Property Analysis 101 – Everything Real Estate Investors Need To Know Posted by Darin Garman | April 9, 2013 | View Comments Property analysis is something I get a lot of questions on – especially from new real estate investors. Analyzing a real estate investment deal is an area that can be intimidating when getting started investing in apartment buildings or commercial real estate. Analyzing properties is as much a part art as it is part science. Yes, you can input your investment property data into a spreadsheet or property analysis tool – and that is a good start. However, there is some art involved as well. After all, one of best examples is Trump’s best selling book “The Art of The Deal”. Here are the most important things you need to keep in mind about income property analysis: Numbers are Most Important. The value of an income property is based on the return it can provide to the investor. I don’t care if it is a nice brick building in a college town. If the income does not support the project, it is probably not a winner for you. You must make sure that the numbers give a positive Net Operating Income, or essentially your return on investment. Know Your Market Cap Rates. Capitalization rates are a measure for the value of a property. Know the capitalization rates for similar properties in the area. You can find this out by contacting a reputable commercial broker, a commercial banker, and/or a commercial property appraiser. All of these professionals should have a good idea what the cap rates are going for in your area. Make sure you have correct numbers. Most brokers/sellers will present you with a pro-forma property analysis. Of course, this is typically not based on “real life” numbers, but “best case” numbers. Which would you rather use when buying? Be sure you are looking at accurate data when doing your analysis. The best way to get this is from the past 2 years property operating data. When you make an offer on a property, you will want to cross-verify this data against their income taxes, as well. Note that things will line up 100%, but they should be close- or it will raise a red flag in the buying process. Would You Buy the Property Again? Imagine if you will, buying the property again in 5 or more years from now. Is the area on decline? Is the area up-and-coming? Are the jobs in the area sustainable? Are there plenty of tenant conveniences nearby? What kind of development (if any) is going on in the area? These are all great questions to ask yourself when doing your property analysis. Asking whether you would buy the building all over again in the future is also a great measure of whether you should move forward on a property. To Your Success, Darin Garman

5 Things to Do Before You Leave the Office

5 Things to Do Before You Leave the Office By Robyn Hagan Cain on April 3, 2013 11:22 AM For some lawyers, the work day never ends. Twenty years ago, lawyers left their phones and computers at work. Thanks to increased mobility, lawyers now send email from their phones, read briefs and cases on tablets, and are rarely seen without a laptop. Unfortunately, the never-stop-working work ethic means that more attorneys are burning out. So how do you stop the vicious cycle? Try actively disconnecting from the office at the end of the day. Of course, that's easier said than done. If you're the type of person who can't rest until you've reached a proper stopping point, it may be helpful to start winding down your day approximately 30 minutes before you leave the office. Last year, Forbes' Jacquelyn Smith outlined 14 things you should do at the end of every work day. If you have time for a 14-step end-of-day ritual, check out her tips. If you're looking for an abridged way to end your day, we've refined some of her tips and added a few of our own to create a handy checklist of five things to do before you leave the office. 1.Input Your Billing. If you have to enter your own billing, do it at the end of each day instead of the end of each month. 2.Check Your Calendar. Sometimes filing deadlines can slip your mind; don't spoil a client's claim because you overlooked a date on the calendar. 3.Respond to Email. If there are unanswered messages in your inbox that needs attention, take care of them before you leave. What's the point of going home to your family/friends/pets if you're going to ignore them while responding to email? 4.Create a To Do List. Smith says that you should plan and prioritize what you will do tomorrow before you leave today. 5.Say Goodnight. While Smith claims that saying goodbye to colleagues can make you feel happier and more fulfilled, it's also practical to bid your law firm colleagues adieu. If your firm has an unspoken don't-leave-until-the-boss leaves rules, saying goodbye notifies those who report you that they can also leave. These, of course, are just a few suggestions. You should customize your end of day ritual with whatever steps help you disconnect. The important thing is that you find a way to leave the office at the office so you can avoid burnout. Five Ways to Irritate Opposing Counsel By William Peacock, Esq. on February 28, 2013 12:20 PM Everyone who has ever practiced law has opposing counsel horror stories. This shouldn’t be surprising. After all, you remember some of the weirdos from your law school class. How many of them are practicing attorneys? In hope that this will help you correct your bad behavior — or indulge in a misery-loves-company therapeutic rant — here are five ways attorneys irritate the other side. 1. Pass off case calls to a series of attorneys in the firm The attorney of record doesn't answer his phone. The next attorney knows nothing about the case. The junior associate knows nothing about the case, and nothing about the law. At this point, the caller will have to fight the desire to drive to the firm and insert the phone in someone's naughty parts. Is that really necessary? 2. Remind young attorneys of their relative lack of experience. Repeatedly. Yes, we're not all seasoned barristers. How about you ask us what it was like to graduate in 2011 again? You might also use age as a passive-aggressive way of intimidating less-experienced foes. "My goodness, you are young." "How old are you?" Young attorneys get it - we're younger and less experienced. 3. Return documents, correspondence slowly Get a stipulation in the mail? Why rush to respond? Sure, there isn't anything to do but sign-and-return. And it has been a freaking week. But why should lawyering be easy? Or quick? Except there's no reason to waste time. You stip. We stip. We all stip. Get it together, man. 4. Skip procedural steps Discovery? Nahhh. Case management conferences? Who needs 'em. Alternative dispute resolution and mediation? He'll be there, but he won't try. There's a reason why certain steps are mandates by the court. Skipping steps not only makes you look incompetent, it's a pain in everyone's buttocks as well. 5. Be OCD about Procedural Steps, Mistakes Then again, there's the converse of the step-skipper: The guy who makes a big deal because subsection 16 of Rule 57 wasn't followed. You forgot to discuss the cost of postage stamps! HOW DARE YOU! There's meaningful participation and fulfillment of procedures. There's also obsessive-compulsive disorder. Try to find a happy medium.

America Fast Forward Bonds

Posted January 23, 2013 by Steve Hymon America Fast Forward gets another thumbs up review; check out list of loan applicants First, a point of emphasis: the America Fast Forward program to expand federal funding to speed up the construction of transportation projects is very much a work-in-progress. Congress adopted part of America Fast Forward last year — an expanded federal loan program called TIFIA that backs loans with the big wallet of the federal government and helps secure low interest rates. To put it another way, Low Interest Rates = Lower Project Costs. The super-size version of TIFIA is so far drawing some pretty good reviews. The Brookings-Rockefeller Project on State and Metropolitan Innovation sung America Fast Forward's praises last week, saying it's one of the top programs of 2012 and poised to make a mark in the years ahead. “This metro-led reform signals a new bottom-up federalist approach that could be replicated to other economy-building efforts,” wrote the Project on its website (It's also on CNN's opinion pages). It's fair to say other regions are certainly trying to benefit from the expanded TIFIA program. Check out this list of applicants for TIFIA loans below on the Federal Highway Administration's website (the agency that administers the program) — looks like a lot of big asks from Red and Blue states alike. As I wrote above, America Fast Forward is not yet a complete program. While Congress expanded the TIFIA loan part of AFF last year, Metro is also advocating for an expanded federal bond program (called QTIB) that would supply more funds for transportation projects. More about that in this recent post. FY 2013 MAP-21 TIFIA Letters of InterestSubmitted through January 17, 2013(Amounts in Millions of Dollars) Continue Reading