Bridging the Weeks - July 2019 #5

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A federal appellate court in California issued a decision effectively ratifying the Commodity Futures Trading Commission’s expansive view of its authority to bring enforcement actions addressing a diverse range of purported wrongdoings under the Dodd-Frank Wall Street Reform and Consumer Protection Act provision prohibiting any manipulative or deceptive device or contrivance. In the same decision, the court also agreed with the CFTC that another Dodd-Frank section that excludes from CFTC licensing requirements the sale of leveraged or margined commodities to retail customers where actual delivery occurs within 28 days mandates meaningful, real delivery to such persons or their agents where they have effective control. This interpretation may have a significant impact on virtual currency and other businesses that offer or seek to offer leveraged or margined financial products from the United States or to US persons. As a result, the following matters are covered in this week’s edition of Bridging the Week:

  • Federal Appeals Court Upholds Expansive CFTC View of Prohibition Against Manipulative or Deceptive Device and Restrictive View of Actual Delivery (includes My View);
  • SEC Corp Fin Says Gaming Digital Token Not Marketed as an Investment Is Not a Security (includes Legal Weeds);
  • Securities Exchanges Sanction Trading Member for Reg MAR Violation Even Though No Problematic Trading (includesMy View); and more.

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Briefly:

  • Federal Appeals Court Upholds Expansive CFTC View of Prohibition Against Manipulative or Deceptive Device and Restrictive View of Actual Delivery: A federal appeals court in California reversed the dismissal by a federal district court of the Commodity Futures Trading Commission’s September 2017 lawsuit against Monex Credit Company and related companies and principals (collectively, “Monex”). Monex is a retail precious metals dealer based in Newport Beach, California.

The CFTC had alleged that Monex enabled retail investors to purchase precious metals on margin without actual delivery through its proprietary Atlas Program and not on a licensed exchange or board of trade as required by law, acted as a futures commission merchant without registration and committed fraud in connection with solicitation activities by making false or misleading statements.

In response, Monex moved to dismiss the CFTC’s lawsuit. The firm claimed that its Atlas Program was not prohibited because it entailed the actual delivery of precious metals in financed transactions to retail persons even though it retained control over the commodities because of the financing. Monex also asserted that the statutory prohibition relied on by the CFTC against the firm – prohibiting “any manipulative or deceptive device or contrivance” – required that it commit fraud that affected or potentially affected a market or constituted fraud‑based manipulation. Monex argued that since the CFTC solely alleged that it engaged in fraud without reference to any market or manipulation, the agency’s charges against it could not stand.

The federal district court agreed with Monex’s legal analysis and dismissed the CFTC’s lawsuit in May 2018. (Click here for details in the article “California Federal Court Dismissal of CFTC Monex Enforcement Action Upsets Stable Legal Theories” in the May 6, 2018 edition of Bridging the Week.) However, the United States Court of Appeals for the Ninth Circuit reversed the district court’s appeal.

First, the appeals court held that the district court misapplied the relevant law that exempts leveraged or margined retail commodity transactions from CFTC oversight where “actual delivery [occurs] within 28 days.” (Click here to access 7 U.S.C. § 2(c)(2)(D)(ii)(III)(aa).) Monex had claimed that this provision would have no practical meaning if “actual delivery” required possession or control by a customer “because such a reading would clash with ‘margin,’ which means ‘cash or collateral required to be paid to a securities broker by an investor to protect the broker against losses from securities bought on credit’.” However, the appeals court rejected this view, writing that “[w]hile permitting customers to obtain significant control over or possession of metals might be practically difficult here, that fact does not displace the statute’s plain meaning.”

Second, the court of appeals concluded that the word “or” in the phrase “manipulative or deceptive device or contrivance” (emphasis added) must be read disjunctively and not conjunctively. (Click here to access the relevant legal provision, 7 U.S.C. § 9(1).) As a result, the CFTC has authority to bring enforcement actions where it alleges either a manipulative device or a deceptive device or contrivance; it need not charge both, said the appeals court. It is not relevant, as Monex argued, that the applicable law (i.e., the Commodity Exchange Act) contains express stand-alone anti-fraud provisions. According to the appeals court, the relevant law’s “overlap with other provisions is minimal, and partial redundancy hardly justifies displacing otherwise clear text.”

In reversing the district court’s dismissal of the CFTC’s enforcement action, the court of appeals presumed all facts alleged by the Commission were true. The CFTC will still have to prove its allegations in any subsequent trial. In addition to other remedies, the CFTC seeks an injunction against Monex, a fine and to have the company pay restitution to its customers.

My View: The Ninth Circuit’s decision is a significant victory for the CFTC as it effectively, materially validates its sweeping view of a section of law enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This provision makes it illegal:

for any person, directly or indirectly, to use or employ, or attempt to use or employ, in connection with any swap, or a contract of sale of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity, any manipulative or deceptive device or contrivance, in contravention of such rules and regulations as the Commission shall promulgate.

Pursuant to this law, the CFTC adopted CFTC Rule 180.1 (click here to access).

The CFTC has already utilized these measures as the wild junkyard dog of its enforcement arsenal without any apparent leash or restraint as it sees them as “broad, catch-all provision[s] reaching fraud in all its forms.” (Click here for background at 75 Fed. Reg. 67,657, 67,658 (CFTC November 3, 2010).) The CFTC has employed these sections in a wide range of enforcement actions stemming from its first use in 2013 in the JP Morgan “London Whale” episode to subsequent allegations of illegal off-exchange metals transactions, claims of more traditional manipulation of wheat, allegations of spoofing, and claims of insider trading, among other offenses. Most recently, the CFTC used these provisions to bring an enforcement action against a former portfolio manager for mismarking valuations of certain interest rate swaps from approximately June 2016 through April 2017 in order to increase his performance bonus. (Click here for details in the article “Ex-Portfolio Manager for Commodity Pool Operator and Investment Advisor Charged by CFTC and SEC for Mismarking Swaps for Bigger Bonus” in the July 21, 2019 edition of Bridging the Week.)

The Monex case is likely to embolden the CFTC in its aggressive and creative use of these provisions of law.

Similarly, rejection by the court of appeals of the district court’s holding that the CFTC’s view of “actual delivery” undercuts Congress’s apparent effort to accommodate leveraged and financed commodity transactions in Dodd-Frank may also embolden the CFTC to prosecute more US-based unlicensed trading platforms or dealers that offer persons anywhere leveraged or margined commodities of any kind (including virtual currencies) and non-US-based persons that offer such leveraged or margined products to US retail persons (technically, non-eligible contract participants; click here for the definition of an ECP at 7 U.S.C. §1a(18.). This decision could also jump-start the CFTC’s finalization of its 2017-proposed interpretation on “actual delivery” involving virtual currencies that has been dormant for some time. (Click here for background in the article “CFTC Proposes Interpretation to Make Clear: Retail Client + Virtual Currency Transaction + Financing + No Actual Delivery by 28 Days + No Registration = Trouble” in the December 17, 2017 edition of Bridging the Week.)

  • SEC Corp Fin Says Gaming Digital Token Not Marketed as an Investment Is Not a Security: The Securities and Exchange Commission’s Division of Corporation Finance issued a no-action letter saying that a digital token designed to facilitate access to a multitude of online video games would not be required to be registered as an equity security. The NAL was sought by Pocketful of Quarters, Inc. (“POQ”) for its proposed “Quarters” digital coin. POQ proposes to introduce a Quarters platform that will leverage blockchain technology to allow gamers to access participating video games and enter hosted tournaments using Quarters which it hopes to evolve into a universal gaming token.

Corp Fin said it granted no action to POQ because, among other reasons, (1) the firm would not use funds from Quarters’ sales to develop the Quarters’ platform; (2) Quarters would be immediately usable at the time they were sold; (3) gamers would only be able to transfer Quarters for gameplay to developers with approved accounts or to POQ for tournaments; (4) only developers and so-called “influencers” with approved accounts would be permitted to exchange Quarters for the virtual currency “ether” at predetermined exchange rates; (5) Quarters would be made available in unlimited quantities and fixed prices; and (6) the purchase price of Quarters would correspond to the market price of accessing and playing participating games. Additionally, Quarters would be marketed solely for consumptive use and as a means to access participating games and not as an investment.

According to the NAL request submitted by POQ, Quarters would not constitute investment contracts (and thus securities) under the 1946 Supreme Court decision SEC v. W.J. Howey principally because “no gamer will be motivated to purchase Quarters by any reasonable expectation of profits.” The SEC has previously relied on the four prongs derived from Howey to assess whether a digital asset might be an investment contract and be subject to applicable securities laws (i.e., (1) an investment of money, (2) in a common enterprise with (3) the expectation of profits (4) from the efforts of a promoter or third party. (Click here to access the Howey decision.)

In other legal and regulatory developments involving cryptoassets:

  • Bitfinex and Related Companies Answer NY AG Complaint by Saying They Had No NY Connections: Bitfinex and related companies moved to dismiss the special proceeding commenced by the New York Attorney General against them earlier this year, claiming that respondents have for some time barred US persons from their platforms, and thus they are not subject to lawsuit by the NY AG. In April 2019, the NY AG obtained an ex parte order from a New York State court prohibiting companies associated with Bitfinex as well as the stablecoin “tether” from accessing, loaning or encumbering in any way US dollar reserves supporting tether digital coins. Respondents also argued that tether is neither a security nor a commodity and thus not subject to the relevant law the NY AG sued them under. (Click here to access the most relevant provision of the Martin Act. Click here to access background regarding the NY AG’s initial lawsuit in the article “NY Attorney General Sues Stablecoin Issuer and Related Companies for Purportedly Misusing Tethered Fiat Currency Without Customer Disclosurein the April 28, 2019 edition of Bridging the Week.)
  • IRS Begins Reminding Individual Taxpayers of Virtual Currency Transactions Tax Payment Obligations: The United States Internal Revenue Service announced it has begun sending letters to US taxpayers reminding them of their obligations to pay taxes on transactions involving virtual currencies no matter where they occurred The IRS noted that persons who do not meet their tax obligations on a timely basis could be subject to fines and interest in addition to the amount of taxes, and in some circumstances, criminal prosecution. The IRS previously has said that virtual currencies are property for federal tax purposes (click here for IRS Notice 2014-21).
  • NYS DFS Moves Licensing of Virtual Currency Companies to New Research and Innovation Division: The New York Department of Financial Services placed the former division responsible for licensing and overseeing virtual currency activity in a new division named the “Research and Innovation Division.” The new section will also “assess new efforts to use technology to address financial exclusion, identify and protect consumer data rights, and encourage innovation in the financial services marketplace.” Presumably, the new section will oversee issuance of so-called BitLicenses. (Click here for background regarding New York’s BitLicense requirements in the article “New York BitLicense Regulations Virtually Certain to Significantly Impact Transactions in Virtual Currencies” in a July 8, 2015 Advisory by Katten Muchin Rosenman, LLP.)
  • Facebook Agrees to Settle FTC and SEC Charges Related to Data Use for US $5.1 Billion Fine: Less than two months after announcing its Libra stablecoin initiative, Facebook settled charges filed on behalf of the Federal Trading Commission and by the Securities and Exchange Commission related to customers’ data use. In a legal action brought by the Consumer Protection Branch of the US Department of Justice on behalf of the FTC, Facebook agreed to pay a US $5 billion fine and to establish a privacy committee of the firm’s board of directors and appoint compliance officers to be responsible for Facebook’s privacy program in order to settle charges that, at various times from 2010 through at least June 2018, it misled users regarding their ability to control the use of their personal information through privacy settings. Separately, Facebook agreed to pay US $100 million to the SEC for advising investors from 2016 until mid-March 2018 about the potential misuse of users’ personal data in theoretical terms, when in fact Facebook was aware since December 2015 that a company employee had improperly sold information of “tens of millions of Facebook users” to Cambridge Analytics, a data analytics firm. Facebook made such disclosures, charged the SEC, in risk factor disclosures in public filings. (Click here for background regarding Facebook's Libra initiative in the My View commentary t0 the article "Global AML Standards Setter Says Countries Should Require Virtual Asset Service Providers to Obtain and Transmit Certain Information Regarding Senders and Recipients for All Virtual Asset Transfers” in the June 23, 2019 edition of Bridging the Week.)
  • Canada OSC Settles With Company for Trading Cryptosecurities Without License: CoinLaunch Corp., a Canadian company, agreed to pay a fine, disgorgement and costs totaling over CAN $50,000 to the Ontario Securities Commission for facilitating the offering of two digital tokens that constituted securities, without registering to be in the business of trading securities, as required, under Ontario law. CoinLaunch marketed itself as a crypto consulting firm that helped companies administer digital token offerings, solicit potential investors, and find seed funding for token offerings.

Legal Weeds: Previously, SEC Corp Fin indicated it would not recommend an enforcement action against TurnKey Jet, Inc. for issuing a digital asset to facilitate sales of air charter services without registering the token as a security under applicable law.

According to a description written by TurnKey, the digital token, as proposed, would effectively be a stablecoin offered in increments of US $1 that would effectuate easier payment for air charter services by potential users to air charter providers (including potentially TurnKey) and intermediary brokers. All transactions would occur solely among subscribers to TurnKey’s membership program utilizing the firm’s fully developed permissioned blockchain and smart contract technology. Proceeds from token purchases would be deposited in escrow accounts maintained at FDIC-insured US banks. Users could only use the tokens on the TurnKey network. Tokens might be repurchased by TurnKey but ordinarily only at a discount to face value. As a result, tokens might also be bought and sold among members, but there would be no “incentive to buy from other Token holders at a premium above one dollar per Token.”

TurnKey itself would solely fund the development and operation of its network (and not use any proceeds from token purchases) and would charge membership fees to users, providers and brokers. TurnKey would market the tokens for their functionality and not as an investment. (Click here for a copy of the TurnKey NAL.)

Although both the TurnKey and Quarters NALs provide valuable insight into what indicia Corp Fin believes would not cause an asset to be regarded as an investment contract (and thus a security), the fact patterns hardly seem controversial. A stablecoin backed 100 percent by one fiat currency and an admission token to arcade games do not seem the type of instruments that could reasonably be deemed securities. Although SEC staff is applauded for taking small steps to not interfere with the development of legitimate blockchain technology applications, some bigger, more insightful leaps are hopefully forthcoming.

  • Securities Exchanges Sanction Trading Member for Reg MAR Violation Even Though No Problematic Trading: Clear Street Markets, LLC, a registered broker-dealer, settled disciplinary actions by six US securities exchanges, including Cboe BZX and EDGX (collectively, the “Exchanges”), for solely utilizing a manual surveillance system for a large period from November 1, 2012, to January 31, 2016, to satisfy its obligation under the Securities and Exchange Commission’s Market Access Regulation that became effective in 2011. Under this rule, broker-dealers with market access must maintain a system of risk management controls and supervisory procedures to control the risks associated with market access, including their own and other market members’ financial circumstances, the integrity of trading on the markets and the stability of the financial system. (Click here to access SEC Rule 15c3-5.)

According to the Exchanges, during a large period of the relevant time period, Clear Street’s business involved making markets in over 3,000 securities and handling over five to 20 million orders daily as part of its proprietary activities. However, during much of the relevant time, the firm solely conducted manual reviews to detect market disruption activities such as marking the close, layering or spoofing Although the Exchanges expressly acknowledged that during the period “there were no instances” of the identified abuses occurring, they claimed the firm’s manual surveillance was not a reasonable system of risk management controls and supervisory procedures.

The Exchanges also claimed that the firm’s automated system to prevent the accidental entry of erroneous orders was also not satisfactory because the thresholds of one of its electronic quoting systems was set too high. There was no charge against Clear Street that at any time it actually entered too many erroneous orders. The firm agreed to pay a fine of US $60,000 to resolve the Exchanges’ disciplinary action.

My View: Implicit to the old adage “if it ain’t broke, don’t fix it” is that "it" worked. It is troubling enough when regulators routinely challenge the reasonableness of procedures when something goes wrong; it is puzzling, at a minimum, to read of this challenge when apparently everything went right.

More Briefly:

  • Former Trader with Two Separate Investment Banks Settles CFTC Spoofing Charges and Enters Into Cooperation Agreement: The Commodity Futures Trading Commission settled enforcement actions against Corey Flaum, a former precious metals traders accused of engaging in spoofing.

According to the CFTC, Mr. Flaum engaged in his illicit conduct from approximately 2007 through approximately 2016, a period of time when he was employed by Bear, Stearns & Co. Inc and Scotia Capital (USA) Inc. He would typically place at least one non-aggressive order on one side of a market intending it to be executed, and one or more very visible non-aggressive orders on the other side of the market with the intent to cancel such orders. He entered his spoofing orders with the intent to facilitate the execution of his genuine orders, claimed the CFTC.

As part of the settlement, the CFTC reserved a determination of sanctions against Mr. Flaum who agreed to fully cooperate with the CFTC’s Division of Enforcement.

Separately, Mr. Flaum pleaded guilty to attempted commodities price manipulation in connection with the same conduct for which he was charged by the CFTC; his sentencing is scheduled for October 29, 2019.

  • CFTC Staff and FinCEN Agree That Certain Registered Introducing Brokers Need Not Comply With Customer Identification Program Requirements: The Commodity Futures Trading Commission issued interpretive guidance relieving introducing brokers that do not have customers or introduce customer accounts to futures commission merchants from having to conduct due diligence and obtain certain information and documents to satisfy customer information program and beneficial ownership obligations imposed by the Commission and the Financial Crimes Enforcement Network of the US Department of Treasury. (Click here to access CFTC Rule 42.2.) Typically such IBs are those commonly referred to as “voice brokers” that enter orders for transacting parties that already have independently established relationships with FCMs.
  • SEC OCIE Notes Investment Advisors Sometimes Weak in Disclosing Prior Disciplinary History of Supervised Employees: The Securities and Exchange Commission’s Office of Inspections and Examinations observed that one half of disclosure-related deficiencies spotted at investment advisors involved failures to provide adequate information regarding disciplinary events of supervised employees or the advisor itself. Also, OCIE observed that some firms did not have a compliance program containing procedures that addressed the risks of employing persons with disciplinary histories, and did not adequately document in writing expectations of supervisors in hiring and overseeing employees with disciplinary histories. OCIE recommended that investment advisors enhance their written policies and procedures related to the hiring of persons with disciplinary histories and the supervision of such persons once employed.
  • Two International Firms Cited by Ontario Securities Regulator for Operating Online Trading Platforms Accessible by Province’s Residents Without Registration: Ava Trade Ltd and International Capital Markets Pty Ltd. (“ICM”) – non-Canada-based companies – were sanctioned collectively over CAN $10 million by the Ontario Securities Commission for selling derivatives to Ontario-based investors through online trading platforms without being appropriately registered or providing investors prospectuses. The products included contracts for differences based on underlying assets, including virtual currencies, foreign exchange, equities and commodities. In connection with ICM, the OSC found that the firm’s interactions with Ontario investors were inadvertent as they were not expressly targeted, while OSC “found no evidence o[f] dishonest conduct” by AVA.
  • CFTC, SEC and Other Federal Agencies’ Inspection Units Highlight Top Management and Performance Challenges of Financial Sector Regulatory Organizations: The Council of Inspectors General on Financial Oversight identified enhancing oversight of financial institution cybersecurity as a principal risk in its 2019 annual report of key challenges in identifying and responding to emerging threats to US financial stability. Other challenges identified by this organization of inspection heads of nine federal financial regulatory agencies included managing and securing information technology at regulatory organizations; sharing threat information; ensuring readiness for new crises; strengthening agency governance; managing human capital; and improving contract and grant management.

According to the report, 31.5 percent of all permanent federal employees will be eligible for retirement in 2022. As a result, agencies need to plan for succession and identify potential leadership gaps. CIGFO identified material deficiencies among federal financial regulators in addressing potential leadership and institutional knowledge issues in the coming years.

CIGFO was created under the Dodd-Frank Wall Street Reform and Consumer Protection Act to oversee the Financial Stability Oversight Council and to suggest measures to enhance financial oversight. The organization includes inspection heads of the Commodity Futures Trading Commission and the Securities and Exchange Commission and seven other federal financial regulators.

For further information:

Bitfinex and Related Companies Answer NY AG Complaint by Saying They Had No NY Connections:

Canada OSC Settles With Company for Trading Cryptosecurities Without License:
https://www.osc.gov.on.ca/documents/en/Proceedings-RAD/rad_20190724_coinlaunch.pdf
https://www.osc.gov.on.ca/documents/en/Proceedings-SET/set_20190719_coinlaunch.pdf

CFTC, SEC and Other Federal Agencies’ Inspection Units Highlight Top Management and Performance Challenges of Financial Sector Regulatory Organizations:
https://www.sec.gov/files/CIGFO-TMPC-Report-July-2019.pdf

CFTC Staff and FinCEN Agree That Certain Registered Introducing Brokers Need Not Comply With Customer Identification Program Requirements:
https://www.cftc.gov/csl/19-18/download

Facebook Agrees to Settle FTC and SEC Charges Related to Data Privacy for US $5.1 Billion Fine:

Federal Appeals Court Upholds Expansive CFTC View of Prohibition Against Manipulative or Deceptive Device and Restrictive View of Actual Delivery:
http://cdn.ca9.uscourts.gov/datastore/opinions/2019/07/25/18-55815.pdf

Former Trader with Two Separate Investment Banks Settles CFTC Spoofing Charges and Enters Into Cooperation Agreement:
https://www.cftc.gov/media/2301/enfCoreyD.Flaumorder072519/download
https://www.justice.gov/opa/pr/former-precious-metals-trader-pleads-guilty-attempted-commodities-price-manipulation

IRS Begins Reminding Individual Taxpayers of Virtual Currency Transactions Tax Payment Obligations:
https://www.irs.gov/newsroom/irs-has-begun-sending-letters-to-virtual-currency-owners-advising-them-to-pay-back-taxes-file-amended-returns-part-of-agencys-larger-efforts

NYS DFS Moves Licensing of Virtual Currency Companies to New Research and Innovation Division:
https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1907231

SEC Corp Fin Says Gaming Digital Token Not Marketed as an Investment Is Not a Security:
https://www.sec.gov/corpfin/pocketful-quarters-inc-072519-2a1

SEC OCIE Notes Investment Advisors Sometimes Weak in Disclosing Prior Disciplinary History of Supervised Employees:
https://www.sec.gov/files/OCIE%20Risk%20Alert%20-%20Supervision%20Initiative.pdf

Securities Exchanges Sanction Trading Member for Reg MAR Violation Even Though No Problematic Trading:
http://cdn.cboe.com/resources/regulation/disciplinary/2012/WBPX-Cboe-EDGX-2012035187507-AWC_Redacted.pdf
http://cdn.cboe.com/resources/regulation/disciplinary/2012/WBPX-Cboe-BZX-2012035187504-AWC_Redacted.pdf

Two International Firms Cited by Ontario Securities Regulator for Operating Online Trading Platforms Accessible by Province’s Residents Without Registration:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.