Credit Risk Retention Final Rule: Enforcement and Compliance Considerations

by Dechert LLP
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Predicting enforcement of the final rule regarding U.S. risk retention is an uncertain task. This OnPoint is designed to provide guidance on possibilities related to consequences of non-compliance, enforcement approaches by regulators and private rights of action by third parties.

In October, the Securities and Exchange Commission (“SEC”), the Board of Governors of the Federal Reserve System (“FRB”), the Office of the Comptroller of the Currency (“OCC”) and the Federal Deposit Insurance Corporation (“FDIC”) (collectively the “Agencies”) approved long-awaited final rules regarding credit risk retention (the “Final Rule”).1 The Final Rule, which implements Section 941 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), generally requires that the sponsor of asset-backed securities (“ABS”) or a majority-owned affiliate of the sponsor retain an economic interest in the credit risk of the securitized assets in the form of an eligible vertical interest or eligible horizontal residual interest, or any combination thereof, in an amount not less than 5% of the capital structure of the transaction determined as of the closing date of the securitization transaction. The provisions of the Final Rule are effective (i) one year from the date the Final Rule is published in the Federal Register with respect to ABS secured by residential mortgages and (ii) two years from the date the Final Rule is published in the Federal Register with respect to all other classes of ABS.2

The Final Rule does not directly address the consequences of non-compliance or detail any enforcement expectations. Many are wondering “or what?” Following are our big-picture conclusions regarding enforcement of the Final Rule:

  • U.S regulators will have a powerful array of enforcement options including, among others, civil money penalties, cease-and-desist orders, control person liability and industry bans. 
  • Plaintiffs will retain their traditional toolbox of private rights of actions for disclosure-based violations of federal securities laws under Rule 10b-5 and related securities laws. It is unclear whether investors may obtain rescission and unwind ABS contracts based on alleged violations of the Final Rule under Section 29(b) of the Securities Exchange Act of 1934 (“Exchange Act”); however, we believe rescission will be unlikely due to barriers created by judicial rulings.
  • The Final Rule authorizes the Agencies to provide post-adoption interpretation and guidance, and to grant exemptions to any securitization transaction as the Agencies “determine may be appropriate in the public interest and for the protection of investors.”3 We expect that industry associations will seek guidance on a host of unaswered questions.
  • For now we cannot be sure what remedies the government or private parties will pursue for violations of the Final Rule, and it may remain unclear after the Final Rule’s effective date. Nonetheless, it seems certain that the applicable governmental agencies will have the power to seek and impose penalties and pursue other remedies against sponsors who violate the Final Rule. We may need to wait for the commencement of regulatory actions before we get answers. 

Many unanswered questions remain under the Final Rule:

  • What remedies, if any, can an Agency or an investor seek if a sponsor intends to comply in good faith with the Final Rule, fully discloses the approach it intends to take and performs in accordance with the disclosed intended approach, but becomes subject to an Agency’s determination retrospectively that such approach does not in fact comply with the Final Rule?
  • For CLOs where a sponsor manager is removed or resigns and is replaced by a successor manager, will the transaction comply with the Final Rule if the manager involved in the organization and initiation of the CLO continues to hold the retention interest or must it be sold to the successor manager and, if it is sold, can a successor manager comply with the Final Rule’s risk retention requirements since it did not “organize and initiate” the CLO?  
  • For CMBS transactions where a B-piece buyer holds risk retention but the sponsor is responsible for making sure that the B-piece buyer complies with the Final Rule, is appropriate up-front due diligence by the sponsor and/or receipt of contractual assurances from the B-piece buyer sufficient if during the course of the transaction the B-piece buyer violates the Final Rule?
  • The Final Rule permits financing and pledging of the retention interest. If a lender forecloses on the pledge, will the pledgor be in violation of the Final Rule?

The Final Rule is entirely silent on these points. It simply defers to the Agencies’ authority to ensure sponsor compliance. 

Section 15G and Adoption of the Final Rule

Section 941 of the Dodd-Frank Act is codified as Section 15G of the Exchange Act.4 Section 15G requires the Agencies to issue regulations implementing risk retention requirements, which mandate resulted in adoption of the Final Rule on October 21 and 22, 2014.5

Who Has Enforcement Authority for the Final Rule?

Section 15G itself does not provide any express remedies for a violation of the Final Rule. However, Section 15G allocates responsibility for enforcement of the Final Rule among the Agencies.6 It provides that the Final Rule and any related regulations shall be enforced by “the appropriate Federal banking agency, with respect to any securitizer that is an insured depository institution” and “[the SEC] with respect to any securitizer that is not an insured depository institution.”7

This allocation was addressed by the Agencies in their respective codifications of the Final Rule and is assigned as follows:

Federal Banking Agency Enforcement Jurisdiction

  • FRB8 – state member banks and their subsidiaries.9
  • OCC – national banks, Federal savings associations, Federal branches or agencies of a foreign bank, or subsidiaries thereof.10
  • FDIC – state nonmember banks, insured Federal or state branches of a foreign bank, state savings associations, or subsidiaries thereof.11

SEC Enforcement Jurisdiction

  • The SEC has enforcement jurisdiction under Section 15G for all other entities that act as securitizers.12 This includes entities in bank holding company organizations that are not a bank or a bank subsidiary.

Federal Banking Agency Enforcement Authority

The banking agencies have authority under the Federal Deposit Insurance Act (“FDI Act”) to bring enforcement actions through an administrative process with an opportunity for judicial review against entities and individuals under their jurisdiction for violations of laws or rules, including the Final Rule issued under Section 15G. The banking agencies may, among other things, seek any of the following remedies:

Cease-and-Desist Orders:  An insured depository institution or an institution-affiliated party (such as a director, officer, employee, or agent, and under certain circumstances an independent contractor)13 may be subject to a cease-and-desist order, requiring a party to cease violations of rules and to take remedial actions, including affirmative action to correct conditions resulting from the party’s violations.14

Civil Money Penalty Orders:  An insured depository institution or an institution-affiliated party may be assessed civil money penalty orders to sanction the institution or institution-affiliated party for violations of rules.15 Depending upon the nature of the conduct, such penalties may range from $5,000 per day to $1,000,000 per day (or, in the case of an insured depository institution, the lesser of $1,000,000 per day or 1% of the total assets of the institution per day).16

Removal and Prohibition Orders:  An institution-affiliated party who is deemed to have directly or indirectly violated a rule may be subject under certain circumstances to an order that removes the individual from service with the institution and/or that prohibits the institution-affiliated party from participating in the affairs of other insured depository institutions or other specified entities.17

The banking agencies have broad discretion in deciding what, if any, actions, including enforcement actions, they will take if they believe that an insured depository institution or an institution-affiliated party has violated a law or a rule. The civil money penalty provision of the FDI Act provides some context for how the banking agencies are expected to exercise their enforcement authority. It calls for an agency to consider, among other things: the financial resources of the party, the good faith of the party, the gravity of the violation, and the history of previous violations.18 The banking agencies have provided additional guidance as to the factors they will consider in regard to the potential application of civil money penalty orders. These factors include evidence that the violation was committed with a disregard of the law, the duration and frequency of the violation, failure to cooperate with the banking agency, and any threat of loss or other harm to the institution including harm to public confidence in the institution.19

As a practical matter, the banking agencies are likely to focus on what types of controls and procedures an insured institution had in place to comply with the Final Rule and whether such controls and procedures were adhered to in regard to an alleged violation. Depending on the circumstances under which the alleged violation arose and the response of the insured institution, the banking agencies will have a wide degree of latitude in deciding whether to pursue enforcement action and what type of action to take. This underscores the importance of implementing policies designed to establish and maintain ongoing compliance with the Final Rule.

SEC Enforcement Authority

The SEC is empowered to initiate administrative enforcement actions or civil actions in federal court seeking any of the following remedies, depending on the egregiousness of alleged violations:

Cease-and-Desist Orders:  The SEC may, after notice and opportunity for hearing, issue cease-and-desist orders for violations of the Exchange Act (which would include any violations of Section 15G and the Final Rule promulgated thereunder)20 and for violations of the Securities Act of 1933 (the “Securities Act”).21

Temporary Cease-and-Desist Orders:  The SEC is authorized under both the Securities Act and the Exchange Act to issue temporary cease-and-desist orders in administrative actions where it determines that an alleged violation or threatened violation is “likely to result in significant dissipation or conversion of assets, significant harm to investors, or substantial harm to the public interest.”22

Civil Money Penalty Orders:  Pursuant to the Dodd-Frank Act, the SEC is authorized to impose civil money penalties in administrative cease-and-desist proceedings against any person, including any public company, found in violation of the Securities Act, the Exchange Act, the Investment Company Act of 1940, or the Investment Advisers Act of 1940.23 Thus violations of Section 15G and the Final Rule promulgated thereunder would provide bases for administrative money penalty orders as violations of a provision of the Exchange Act. Sponsors whose violations involve “fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement” resulting in substantial loss or a significant risk of substantial loss face penalties of up to $100,000 per act for a natural person and $500,000 per act for a non-natural person.24

Director and Officer Bans:  The SEC is authorized to pursue temporary and permanent prohibitions against service as an officer or director of an SEC-registered company.25 This remedy likely would be sought where violations of the Final Rule can be tied to a particular individual affiliated with the securitizer.

Control Person Liability:  Under Section 20(a) of the Exchange Act, the SEC is authorized to bring an action against a “control person” (such as an officer, director, or controlling entity) when the controlled person violates the Exchange Act “unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.”26

Loss of Investment Adviser Registration:  As part of its enforcement authority, the SEC may strip an investment adviser of its registration for violations of federal securities laws.27

Disclosure-Based Civil Claims:  To the extent a sponsor’s failure to comply with the Final Rule also results in a separate alleged violation of the anti-fraud provisions of the securities statutes – e.g., misrepresentations to ABS purchasers with respect to risk retained by the securitizer or sponsor – the SEC would be able to seek money judgments and injunctive relief for violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder through injunctive and civil penalty actions. 

Criminal Liability:  Although the SEC’s authority is limited to civil and administrative actions, the U.S. Department of Justice may bring criminal actions for willful violations of federal securities laws.28

Private Rights of Action

Disclosure-Based Exposure to Private Claims:  Third parties alleging harm or loss in a private action in connection with an ABS offering often point toward material misstatements or omissions in offering materials and the related liability under the anti-fraud provisions of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder based on “any untrue statement of a material fact” or any omission of “a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.”29 Third-party claims can also take the form of private rights of action under Section 11 (with respect to liability of issuers and underwriters for investor damages subject, in the case of underwriters, to available due diligence defenses) and Section 12(a)(2) (with respect to private rescission rights for misstatements or omissions) of the Securities Act. In addition, Section 17(a) of the Securities Act provides for liability for fraudulent sales of securities. However, the universe of case law is not dispositive as to whether a private plaintiff can assert claims under Section 17(a).

Undoubtedly, some plaintiffs will try to assert a disclosure claim under the Final Rule. However, for a transaction in which a sponsor intends to comply in good faith with the Final Rule, fully discloses the approach it intends to take and performs in accordance with the disclosed intended approach, but becomes subject to an Agency’s determination retrospectively that such approach does not in fact comply with the Final Rule, it would seem extremely difficult for an investor to win a claim alleging a Rule 10b-5 violation. Of course, where an investor can prove that the offering materials did contain misstatements of material facts or material omissions regarding how the sponsor intends to comply with the Final Rule, such a claim could be maintained.  

Rescission and Section 29(b) of the Exchange Act:  Private litigants may consider rescission as an option in seeking to unwind ABS transactions where the securitizer has failed to comply with risk retention regulations. Section 29(b) of the Exchange Act provides, “[e]very contract made in violation of any provision of [the Exchange Act] or of any rule or regulation thereunder . . . shall be void.”30 The Supreme Court has held that Section 29(b) is an equitable remedy that renders contracts that violate the Exchange Act voidable at the option of the innocent party (but not invalid from the outset). Courts generally construe Section 29(b) narrowly. To rescind a contract under Section 29(b) the plaintiff must show, among other things, that: (1) the contract involved a prohibited transaction, (2) the plaintiff is in contractual privity with the defendant, and (3) the plaintiff is in the class of persons that the securities laws were designed to protect. An investor may be unable to establish privity if there is no direct contractual relationship between the investor and the sponsor subject to the Final Rule. Because the Final Rule is aimed at regulating systemic risk in the ABS market, an investor plaintiff may have difficulty proving that it is in the class of persons the Final Rule was designed to protect. Moreover courts are wary of implying private rights of action absent clear congressional intent31 and neither Section 15G nor the Final Rule includes an express private right of action – rather Section 15G and the Final Rule are aimed at promoting confidence in the market as a whole. Even if a plaintiff can show that the required elements exist, use of Section 29(b) as an equitable remedy by a court will depend on whether the court determines that it is more equitable to void the contract than not to do so based on the facts and circumstances in the particular case.32

Sponsor Liability for Non-Sponsor Holders of the Retention Interest

In general, the Final Rule does not permit multiple sponsors to divide the required risk retention among the sponsor group. In commentary to the Final Rule, regulators indicated that the agencies were “not allowing sponsors to divide the required risk retention generally because allowing multiple sponsors to divide required risk retention among themselves would dilute the economic risk being retained and, as a result, reduce the intended alignment of interest between the sponsor and the investors.”33 Therefore, unless otherwise permitted under the Final Rule, even if multiple sponsors exist, one sponsor is required to hold the entire retention required under the Final Rule. Two circumstances in which someone other than the sponsor is permitted by the Final Rule to hold a retention interest relate to originators and, in the case of CMBS deals, to third-party purchasers (e.g., subordinate B-piece buyers). 

Allocation to Originators:  A sponsor may allocate a portion of the retention interest to eligible originators of assets underlying the ABS, and a sponsor may offset the amount of its retention interest by the amount of eligible interests acquired by such originator provided that (i) the originator acquires and retains at least 20% of the aggregate risk required to be retained by the sponsor and (ii) the ratio of the percentage retention interest retained by the originator to the percentage of the retention interest retained by the sponsor does not exceed the ratio of the balance of the assets in the securitization originated by such originator to the balance of all assets in the securitization.34

CMBS – Allocation to Third-Party Purchaser(s):  For CMBS transactions the Final Rule permits the related sponsor to satisfy risk retention requirements through originator allocations and also through allocations to one or two B-piece buyers, which in the case of two purchasers must be pari passu horizontal residual interests.35 These different approaches may be combined in certain ways.

Sponsor Still Has Duty to Comply:  With respect to a permitted allocation to an originator, the Final Rule states that the “retaining sponsor shall be responsible for compliance” related to any such allocation of the sponsor’s risk retention obligations; however, the Final Rule indicates that a sponsor relying on any such permitted allocation must “maintain and adhere to policies and procedures that are reasonably designed to monitor the compliance by each originator that is allocated a portion of the sponsor’s risk retention obligations.”36 With language that is reminiscent of due diligence defense concepts under the Securities Act, this part of the Final Rule could offer some breathing room to sponsors that allocate their risk retention obligations in accordance with the Final Rule so that a sponsor may avoid or limit regulatory enforcement or private claims if it reasonably designs policies and deal-party arrangements aimed at requiring the third-party holder of the risk retention to comply with the Final Rule. However, in many ABS transactions there may not be an eligible originator (that satisfies the criteria of the Final Rule) or one that is willing to hold that portion of the risk retention permitted to be allocated to it under the Final Rule. 

Similarly, with respect to the CMBS-specific provisions of the Final Rule that permit allocation of risk retention to one or two third-party purchasers, the Final Rule requires that the retaining sponsor “maintain and adhere to policies and procedures to monitor each third-party purchaser’s compliance.”37 Unlike the analogous requirements related to originator allocations, this provision does not include the qualifying language that such policies need only be “reasonably designed” for compliance. One is left wondering whether a sponsor’s monitoring obligations with respect to an allocation to an originator and an allocation to a CMBS-specific third-party purchaser are intended to be subject to different standards.

Expectations Regarding Enforcement and Compliance

It looks like the Final Rule is here to stay. Aside from any post-adoptive interpretation or guidance provided by the Agencies prior to the compliance deadline, open questions regarding enforcement may go largely unanswered until remedies are pursued by the Agencies or by third-party market participants. However, as detailed in this OnPoint, a sponsor of an ABS transaction can expect that (1) the SEC and applicable banking regulators will have broad discretion when selecting enforcement options, (2) Rule 10b-5 claims could be a ripe source of third-party actions at least for transactions where there is a failure to properly disclose the material terms of the risk retention, (3) absent a Rule 10b-5 violation, investors will likely have difficulty translating a violation of the Final Rule into a private rescission right and (4) any sponsor who intends to satisfy all or a portion of its risk retention obligation through a permissible third party (for example, an originator or a B-piece buyer) will need to have robust policies and procedures in place to assure itself that the third party will hold the risk retention in a manner that does not violate the Final Rule and will need to consider and agree with any such third party upon the precise form of risk retention, the identity of the holder of the risk retention and the amount of any permitted allocation to originators or third-party purchasers. Sponsors will have about two years (or, in the case of RMBS, one year) to prepare for life under the Final Rule – and there is plenty to consider so there is no better time than now.

Footnotes

1. The Final Rule is available here

2. The Final Rule has not yet been published in the Federal Register. 

3. Final Rule at 668 (Subpart D, §__.21).

4. 15 U.S.C. § 78o-11.

5. The Federal Housing Finance Agency and the Department of Housing and Urban Development were also required to act jointly with the Agencies with respect to the qualified residential mortgage provisions of the Section 15G.

6. The EU risk retention rules take a different approach when it comes to enforcement, imposing penalties on investors who buy securities issued by noncompliant securitizations. See, e.g., Articles 404-410 of the EU’s Capital Requirements Regulation.

7. 15 U.S.C. § 78o-11(f).

8. The FRB will codify the Final Rule as its Regulation RR. 12 C.F.R. § 244 (publication forthcoming).

9. 12 C.F.R. § 244.1(c)(1) (publication forthcoming).

10. 12 C.F.R. § 43.1(c) (publication forthcoming).

11. 12 C.F.R. § 373.1(c) (publication forthcoming).

12. 17 C.F.R. § 246.1(a) (publication forthcoming). Unlike the FRB, OCC and the FDIC, the SEC’s version of the Final Rule does not expressly address the types of entities that are allocated to the SEC’s enforcement jurisdiction. The SEC’s rule, which will be codified as Regulation RR, provides that its authority under the rule shall be in addition to its authority to enforce the federal securities laws, including, without limitation, the antifraud provisions of the securities laws. 17 C.F.R. § 246.1(b) (publication forthcoming). 

13. 12 U.S.C. § 1813(u).

14. 12 U.S.C. § 1818(b).

15. 12 U.S.C. § 1818(i)(2).

16. 12 U.S.C. § 1818(i)(2). These statutory limits are required to be adjusted for inflation periodically by the federal banking agencies. See, e.g., 77 Fed. Reg. 66529 (Nov. 6, 2012) (OCC rule implementing inflation adjusted civil money penalty limits).

17. 12 U.S.C. § 1818(e).

18. 12 U.S.C. § 1818(i)(2)(G). 

19. OCC Bulletin 1998-32 (July 24, 1998) (attaching the Interagency Policy Regarding the Assessment of Civil Money Penalties).

20. 15 U.S.C. § 78u-3.

21. 15 U.S.C. § 77h-1.

22. 15 U.S.C. § 77h-1(c)(1); 15 U.S.C § 78u-3(c)(1).

23. § 929P(a) of the Dodd-Frank Act (amending § 8A of Securities Act; § 21B(a) of Exchange Act; § 9(d)(1) of Investment Company Act; § 203(i)(1) of Investment Advisers Act); see also 15 U.S.C. § 78u-2.

24. 15 U.S.C. § 78u-2(b).

25. 15 U.S.C. § 78u(d).

26. 15 U.S.C. § 78t.

27. 15 U.S.C. § 80b-3(e).

28. 15 U.S.C. § 78ff (criminal penalties under the Exchange Act); 15 U.S.C. § 77x (criminal penalties under the Securities Act); 15 U.S.C. § 80a-48 (criminal penalties under the Investment Company Act); 15 U.S.C. § 80b-17 (criminal penalties under the Investment Advisers Act).

29. 15 U.S.C. § 78j; 17 C.F.R. § 240.10b-5.

30. 15 U.S.C. § 78cc(b).

31. Alexander v. Sandoval, 532 U.S. 275, 28 (2001) (“Like substantive federal law itself, private rights of action to enforce federal law must be created by Congress.”).

32. Mills v. Elec. Auto-Lite Co., 396 U.S. 375, 386 (1970) (“nothing in the statutory policy requires the court to unscramble a corporate transaction merely because a violation occurred…  [i]n selecting a remedy the lower courts should exercise the sound discretion which guides the determinations of courts of equity”) (internal citations and quotation marks omitted).

33. Final Rule at 42.

34. Final Rule at 618-19 (Subpart C, § __.11(a)).

35. Final Rule at 599-600 (Subpart B, § __.7(b)).

36. Final Rule at 620-21 (Subpart C, § __.11(b)(2)(A)).

37. Final Rule at 607 (Subpart B, § __.7(c)(2)(A)).

 

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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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.