A Plea For Better Protection And Regulation Of Financial Services
Foxman Environmental Development Services Convicted Of Unlawful Use Of Land As a Waste Facility (Aus – criminal)
Foxman Environmental Development Services Pty Ltd, Botany Building Recyclers Pty Ltd and Mr Phillip Foxman were found guilty by the Land and Environment Court in contested prosecutions initiated by the NSW EPA. They have not yet been sentenced.
I’ve included this for two reasons. The first is because the case is a good example of the way the resources of a regulator can be devoured by a criminal trial when the accused pleads not guilty, and of the evidentiary difficulties involved in establishing relatively simple matters (in this case, illegal dumping of waste) to a criminal standard. The court referred to “the extraordinary volume of evidentiary material” in the case, which ran over 19 hearing days (including a one-day site viewing).
The second reason I’ve included the case here is because the offender Botany Building Recyclers Pty Ltd had a liquidator appointed prior to the initiation of prosecution. According to the court, “The appointed liquidator of BBR approached the Court when the trial opened, seeking some time to consider his position, and soon resolved that he neither consented to, nor declined authority for, Foxman representing BBR in these proceedings. The Court granted Foxman leave to do so, pursuant to s 37(2) of the Criminal Procedure Act 1986 … and he proceeded to appear for himself and both defendant companies throughout the hearing, apparently seeking assistance outside Court from a solicitor and a barrister.” -
The Community Network Treated Bethanie’s Jumping Castles Unconscionably (Aus – civil)
The Federal Court has declared that Multimedia International Services Pty Ltd, trading as The Community Network, engaged in unconscionable conduct in its dealings with a small business, Bethanie’s Jumping Castles, and that it “made false or misleading representations to two other small businesses and wrongly accepted payments from them“. It received civil penalty orders totalling $230,000. The litigation was brought by the ACCC.
Not So Secure: The State Of Security Industry Regulation In NSW (Aus – regulatory)
I came across Kim and Prenzler’s article, “Nature, Rationale, and Effectiveness of Security Industry Regulation in New South Wales, 1985–2014” this week. It’s an interesting look at some of the problems and successes of the licensing regime, many of which apply to licensing generally. There is significant variation between Australian states and territories regarding which industries are licensed, and how, and licensing-related work can be a large part of state-based consumer regulators’ activity.
Extra Exciting 2016 OECD Forum on Tax Administration Concludes (Global)
“The Forum on Tax Administration (FTA) with participants from over fifty delegations, including international and regional tax organisations, met in Beijing on 11-13 May 2016 and committed to continued international co-operation in order to tackle offshore tax evasion and work towards a fairer and more transparent international tax system.
The communiqué released at the close of the meeting contains more details.”
Among the noteworthy events was the second signing of the Multilateral Competent Authority agreement for the automatic exchange of Country-by-Country reports (“CbC MCAA”); there are now 39 signatories, including Australia.
New Crown Court Bench Book For The UK (UK – criminal)
The UK never fail to impress with their judicial, government and regulatory websites and policies for transparency. This fortnight, the judiciary published a new Compendium to replace the existing Judicial College guidance. The first volume deals with jury management and directions; the second with sentencing.
Naming The Shells: Obama’s Moves To Bring Shell Company Ownership To Light (USA)
Bloomberg reports, “The Obama administration renewed its push Thursday to make it harder for people to hide money in the U.S., jumping on momentum created by the release of leaked Panama legal documents to pressure Congress on proposals that have been languishing for years.
The government will send proposed legislation to lawmakers that would require companies to name the owners of any new entities they create and would expand the Justice Department’s power to subpoena information in some corruption cases.
It also finalized a rule that will require financial institutions to identify the account holders hidden behind shell companies, while proposing new rules to eliminate a loophole that allows some foreign-owned companies to hide assets in the U.S.” The White House fact sheet is available here.
Facebook Inc And The Biometric Information Privacy Act (USA – civil)
In a civil suit filed by individuals against Facebook, a Judge has rejected the defendant’s argument that Illinois law does not apply to it, ruling that, despite its valid user agreement stating that California law applies, the Illinois BIPA also applies. The plaintiffs argue that Facebook’s facial-recognition ‘tagging’ violates their privacy rights established under the BIPA.
FDA To Regulate E-Cigarettes, Etc (USA)
The American Bar Association reports: “In a Thursday announcement, federal officials introduced a finalized rule (PDF) that will for the first time regulate e-cigarettes, as well as strengthen oversight by the U.S. Food and Drug Administration of other tobacco products. As of Aug. 8, the FDA will include e-cigarettes, vape pens, hookahs, pipe tobacco, premium cigars and nicotine gels within the definition of tobacco products it regulates.”
60 Tonnes Of Illegally Imported Honey Seized In Chicago (USA)
“Special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) have seized nearly 60 tons of illegally imported Chinese honey valued at more than $200,000 destined for U.S. consumers. The three shipping container loads (195 barrels) of bulk honey smuggled into the United States were falsely declared as originating from Vietnam to evade anti-dumping duties applicable to Chinese-origin honey.”
Very often, corporate crime and misconduct spills across a number of subject areas. But the separation of regulators and police forces means that generally speaking, whomever first identifies the conduct will determine which parts of the wrongdoing are addressed, and how. In the case of honey imported to a consumer market under false pretences, you’re looking at conduct that might be fraudulent, anti-competitive, involve tax evasion, violation of border protection law, and attempted violation of food standards and consumer information requirements, among other things. In this case, the matter was detected by Homeland Security. It will be interesting to see how it is dealt with.
“Affirmative Litigation” (USA)
The New York Times reports (blog here) US municipalities are increasingly teaming with class action law firms to bring litigation against corporations, in matters as diverse as discrimination, anti-competitive conduct, breaches of consumer and environmental laws.
When Arbitration Becomes Unarbitrarily Unfair To Consumers (USA)
The Centre For Progressive Reform reports that forced arbitration clauses are hurting US consumers, and calls for law reform to address the problem. Here in Australia, such clauses are unenforceable, as unfair contract terms are voided by the Competition And Consumer Act, and the types of clauses described in the CFPR report are caught within the definition. This is not one of the solutions proposed by the CFPR.