Personal Liability

News & Analysis as of

SEC Sends A Message — To Executives And Their Companies

In October 2013, SEC Chair Mary Jo White gave a speech at the Securities Enforcement Forum in which she declared an “enforcement mission” of the SEC to be implementation of the “broken windows” theory of crime deterrence...more

“Culture of Compliance” Urged by FinCEN

Following months of rumors that the Financial Crimes Enforcement Network (FinCEN) is preparing to impose personal liability on officers, directors and employees for shortcomings in their financial institutions’ Bank Secrecy...more

Personal Responsibility for PA Tax Assessments

Under Pennsylvania law, there are important exceptions to the general rule that officers, employees and owners of a corporation or limited liability company have no personal liability for the business’s unpaid tax...more

Reminder: Just Being Incorporated Isn’t Enough

Being incorporated isn't enough for a construction company to keep its assets protected. As a contractor or subcontractor you need to keep up the corporate formalities to avoid the possibility of personal assets being on the...more

LLC Managers Beware: Get Involved With Member Distributions By an Insolvent LLC and You May Be Personally Liable

A chapter 7 trustee sued a manager of three limited liability company (LLC) debtors for breach of fiduciary duty and to hold the manager personally liable for distributions made to members, including himself....more

Personal Liability In Business Ownership/Operation

Common practice for well advised business owners is to operate the enterprise through a chartered corporation or other limited liability entity recognized in the state(s) in which the business will be operated. The main...more

Idaho Real Estate & Development Law Update: Lack of Corporate Formalities Will Not Destroy the Limited Liability Protection...

In the case of Wandering Trails v. Big Bite Excavation released June 18, 2014, the Idaho Supreme Court clarified the requirements for piercing the veil of a limited liability company or LLC and thereby imposing liability on...more

Individual Responsibility under the ACA

Effective 2014, if a taxpayer is not covered under minimum essential coverage for one or more months, then, unless an exemption applies, the taxpayer is liable for the individual shared responsibility payment on his return. ...more

Georgia Supreme Court: Business Judgment Rule Valid, But Bank Officers Can Still Be Liable

In the context of Federal Deposit Insurance Corporation (FDIC) litigation against the former directors and officers of a failed bank, the Georgia Supreme Court has upheld the validity of the business judgment rule in the...more

Pin the Blame on the Corporate Officer: Senators Introduce Hide No Harm Act

Three Senate Democrats recently introduced a bill that seeks to hold company executives of a product maker or seller criminally liable for knowingly "failing to inform and warn of serious dangers" associated with a product....more

Business Judgment Rule in Georgia: Not a "Get Out of Jail Free Card" for Officers and Directors

The Georgia Supreme Court has adopted the Business Judgment Rule with a very important nuance that requires officers and directors to not only be prepared when making their decisions but to document their preparations in...more

Doing Business in Canada: Directors' Liabilities

DIRECTORS’ LIABILITIES - In Canada, there is a legal duty for every director and officer of a corporation to act honestly and in good faith with a view to the best interests of the corporation when exercising his/her...more

Chancery Court Provides Additional Room for Shareholders Challenging Change of Control Transactions

What you need to know: In its recent decision in Chen v. Howard-Anderson, Delaware’s Court of Chancery held that directors and officers may be found to have acted in bad faith, thereby breaching their fiduciary duty of...more

Individual Liability: What’s Behind The Headlines?

It’s been open season on financial institutions since the 2008-2009 financial crisis (“Financial Crisis”). State and federal prosecutors and regulators are competing with each other for press coverage of their latest consent...more

MoFo New York Tax Insights - Volume 5, Issue 7 - July 2014

In This Issue: - Department of Finance Announces Updated Commercial Rent Tax Audit Policy on Billboards - ALJ Finds No Hearing Right To Challenge Notice and Demand, and Corporate “President” Is Personally...more

CFPB Has Authority to Bring Actions Against a Non-Depository Institution’s Related Persons; Are Payday Lenders Next?

The Dodd-Frank Wall Street Reform and Consumer Protection Act grants to the U.S. Bureau of Consumer Financial Protection (the “CFPB”) the power to bring actions against “related persons” of non-depository institutions. A...more

The New York Legislature Passes a Bill Eliminating the Annual Wage Notice Requirement

Employers in New York will not have to issue annual wage notices to employees in 2015 and beyond. On June 19, 2014, a bill was passed in both the New York Assembly and Senate that eliminates the requirement contained in the...more

Virginia’s Privity of Contract Defense Continues to Protect Defendants in Economic Loss Cases

I am often told by clients that they are protected from a lawsuit because they have a corporation. The advice I usually give them is that while the corporate shield is strong it does not protect them if they are negligent...more

Corporate Compliance Officers Face Threat of Civil Monetary Penalties and Criminal Prosecution for Institutional AML Deficiencies

While financial institutions have long faced the possibility of civil monetary penalties and criminal prosecution for violations of the Bank Secrecy Act (“BSA”) and its implementing regulations, found at 31 C.F.R. Chapter X,...more

Collateral Estoppel Sinks LLC Members' Claim

It might seem uncontroversial that the members of a limited liability company cannot follow with a personal lawsuit for injuries after their LLC litigates, and loses, claims based on the same issues. But it took the Business...more

50 For 50: Five Decades Of The Most Important Discrimination Law Developments - Number 26: Individuals Cannot Be Liable For Title...

There are all sorts of reasons why an employee would want to avoid discrimination or harassment of co-workers or direct reports, but the one which resonates the most is the potential that the employee can be found...more

Regulators Increasingly Pursue Individual Liability for Money-Laundering Violations

The Financial Crimes Enforcement Network (FinCEN), an arm of the U.S. Department of Treasury, recently fined a Miami-based money services business (MSB) and its owner $10,000 for failing to implement proper anti-money...more

The Epic Buckyballs® Saga Settles

May 2014 brought an ordinary end to a series of extraordinary events, with the Consumer Product Safety Commission (CPSC) settling an unprecedented proceeding against Craig Zucker, the former CEO of Buckyballs® manufacturer...more

City Not Liable For Mayor's Alleged Improper Conduct

Gong v. City of Rosemead (May 20, 2014, B247601) -- Cal.App.4th --, a Court of Appeal declined to hold the City of Rosemead ("City") liable for the alleged tortious conduct of former mayor and City Council member John Tran...more

Individual Liability in CFPB Enforcement Proceedings

To date, the CFPB has brought 12 cases—out of more than three dozen total CFPB enforcement cases—in which it named individuals as defendants or respondents liable for violations of consumer protection statutes. Below, we...more

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