The 9th U.S. Circuit Court of Appeals affirmed the district court’s ruling in Aqua Star (USA) Corp., vs Travelers Casualty and Surety Company of America. The case involved fraudulent emails purporting to be from the insured’s suppliers directing that the insured direct its payments to a new account purportedly opened by that supplier. Based on that fraudulent communication, the insured transferred $713,890 due its supplier to the fraudulent “new account.”
FTC Announces Expanded Settlement with Uber
The FTC withdrew its August 2017 administrative complaint and proposed consent agreement with Uber Technologies, Inc. (Uber) and issued a revised complaint against Uber Technologies, Inc. Uber has accepted a revised proposed consent agreement which will be subject to public comment for 30 days.
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U.S. Congress Approves CLOUD Act for Data Stored Overseas
On March 23, 2018, Congress passed the “Clarifying Overseas Use of Data Act,” also known as the “CLOUD Act” (H.R. 4943, S. 2383), a new U.S. law that will have a dramatic effect on the United State government’s control over and access to data stored overseas. The CLOUD Act was introduced to the U.S. Senate and House of Representatives on February 6, 2018, as part of a $1.3 trillion omnibus spending bill. The bill passed both houses of Congress on March 23, 2018, and was signed into law by the President the next day.
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FCC to Wade into the US Telecom Supply Chain in the Name of National Security
The Federal Communications Commission (FCC) made headlines on March 26 when Chairman Ajit Pai proposed that the FCC bar several companies, in the name of national security, from participation in the FCC programs. The FCC plans to vote on this proposal at its next Open Meeting on April 17, 2018.
The proposal was prompted by letters he received from 18 Congressional leaders last December, which asserted the potential for compromised security of U.S. telecommunications networks through insecure equipment supply chains required FCC consideration. Chairman Pai responded to the Congressional letters by noting that FCC itself does not purchase or use the equipment from the named companies and would not intend to take service from a service provider that does. The Chairman however did not stop there; he is proposing that certain companies be barred from participating in the Universal Service Fund (USF) program that subsidizes carrier equipment.
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Tabula Rasa: President Nominates Fifth FTC Commissioner
As anticipated, President Trump nominated Rebecca Slaughter, Chief Counsel to Senator Charles Schumer, for the FTC’s fifth vacant commissioner slot. Ms. Slaughter identified the following items as the top three challenges facing the FTC:
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SEC Freezes $27 Million Related to a Blockchain/Cryptocurrency Acquisition
The Securities and Exchange Commission (SEC) obtained a court order freezing more than $27 million in proceeds from alleged illegal distributions and sales of restricted shares of a public company , and charged the company, its CEO, and three other affiliated individuals on April 6, 2018. That same day, the Nasdaq Stock Market halted trading in the company’s stock.
The SEC’s complaint alleges that shortly after the company began trading on the Nasdaq Stock Market and announced the acquisition of a purported blockchain-empowered cryptocurrency business, its stock price rose dramatically until its market capitalization exceeded $3 billion. The SEC further alleges that the CEO and the three other individual defendants then illegally sold large blocks of their restricted shares to the public while the stock price was excessively elevated and that they collectively reaped more than $27 million in profits.
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