More From Eric Dixon at http://www.NYBusinessCounsel.com

Twitter Rank #35 For Startup Advice May 2014 (#44 June 2014, #50 July 2014 -- now TRENDING UP at #41 for August 2014). Go to my professional site for solutions to your legal, business and strategic problems. Bitcoin Protocol Development -- Among the World's Legal Leaders in New Bitcoin Technology -- Top Strategic Judgment -- When You Need A Fixer -- Explore Information Protection and Cryptographic Security -- MUST-WIN: JUST DON'T LOSE -- SURVIVE!: Under Investigation? Being Sued? Handling Extreme Stress -- Corporate Issues -- Startup Issues -- Investor Issues -- Contracts To Meet Your Needs -- Opposition Research -- Trademark, Patent, Copyright -- Media and Reputation Issues -- Independent, top-notch legal, strategic and personal advice -- Extensive ghostwriting, speechwriting, book writing, issue research, press and crisis management services. Listed among the American Bar Association's Law Bloggers (Blawgers). Contact EDixon@NYBusinessCounsel.com 917-696-2442.

Tuesday, November 30, 2010

A "Do Not Track" Internet Registry? Anonymous Internet Browsing

As a public service, those who wish to avoid being tracked on the Internet by cookies and other malware may wish to check out Mozilla Firefox, which I first heard about way back in 2004.  It is profiled this morning in the Wall Street Journal.

The article also speculates as to how a so-called "do not track" registry might work.  When that legislation comes out, we expect there will be flaws -- "trap doors" if you prefer that nomenclature.  The existence of such a registry, into which your information would have to be provided, by itself presents its own potential threat.  Any system can be penetrated. 

In essence, your privacy may be secure (as promised); however, that safety, and your peace of mind, depend on the fidelity of others to the law. 

Our bulging prisons and court systems attest to the volume of people who seek to get away with breaking the law.  How is that for comfort?

Eric Dixon is a New York lawyer who handles investigative matters, strategic analysis and legal dueu diligence for small business clients and individuals.  Mr. Dixon also provides lawsuit stress management consulting for individuals who feel the need to help cope with the stress of being sued or, even worse, investigated by government agencies such as the IRS.  Mr. Dixon may be reached for comment or consultation at 917-696-2442 and through his website at http://www.nybusinesscounsel.com/ and edixon@NYBusinessCounsel.com.

Monday, November 29, 2010

Anti-Bullying as New Bully Tactic

New Jersey's Governor has yet to sign - or veto - a new anti-bullying statute (A.3488) passed two weeks ago by both houses of the New Jersey legislature.

Chris Christie should veto it, for among other reasons, it creates liability for teachers and school administrators who fail to respond appropriately to a bullying complaint.

True bullying is a problem, undoubtedly, but it is best served with personal attention and supervision. Instead, New Jersey promises to have a law which will, in practical terms, compel risk-averse (I.e. wanting to avoid liability) teachers to monitor, supervise and in some cases prohibit virtually all student socializing where someone could claim to have hurt feelings.

Note that last phrase. The burden of proof is on the object of the complaint, who could be totally innocent. What if a few kids get together and agree to make false claims against another unpopular student? (Sound like bullying to you?) This law gives the bullies a new weapon: false accusations instead of fists.

This bill will increase the ranks of the falsely accused, the wrongfully accused and the totally innocent children -- that's right, children -- who will be stigmatized and traumatized by punishments, authority figures who will assign blame to them on nothing more than the say-so of others, and even by possible juvenile experiences with law enforcement.

Families will need to have lawyers (like me) on call to protect their kids' rights under a system where the true primary objective is to protect the teachers and administrators (the same ones not getting raises and having their salaries under attack by Christie) from legal liability. The schools' objective won't be to protect kids, certainly not from true bullies. (The real bullying will go on outside, as always, beyond the watchful eye of parents and teachers.).

And actual teaching of students? That's going to be forgotten under a maze of liability traps.  As teachers and administrators become more concerned with their own liabilities (and in fairness, with good reason), their time and energy available to devote to what you think is their primary job -- actually teaching our kids -- will diminish.

(One could be Machiavellian and say that in New Jersey, this is part of a nefarious plot to cause the public school system to deteriorate further in order to build up more public support for "charter schools," which are nothing more than conduits to transfer taxpayer dollars to favored private-sector parties who run these schools.)

This is what happens with short-sighted policy measures enacted for political gain.

But stopping bullying? This bill won't do anything of the sort.

Eric Dixon is a New York lawyer, also admitted in New Jersey, who represents individuals, entrepreneurs and small businesses on legal, management consulting and strategic analysis issues. Mr. Dixon's professional website is http://www.NYBusinessCounsel.com and he can be reached for comment at edixon@NYBusinessCounsel.com and 917-696-2442.

Friday, November 26, 2010

TSA and the Germ-Friendly Skies

Crime, Politics and Policy addressed the biohazards of the TSA's new policy in an article posted Wednesday morning, November 24th.  Now, the cross-contamination peril of the TSA's by-hand pat-down for people afraid of the naked body scanners has been addressed by a major news service, World Net Daily.

The World Net Daily report, posted late the evening before Thanksgiving, recognized (as we did) that the infection-spreading risk extended to patdowns over clothing.  While Crime, Politics and Policy merely addressed by name one particular pathogen -- fecal coliform -- Bob Unruh's article at http://www.wnd.com/ highlighted a whole list of nasty germs, bugs and parasites, from syphillis and staph to the dreaded norovirus.

I emphasize for your protection the doctor's warning in the article that travelers facing the plastic glove should remove their clothes and shower ASAP after the encounter.

Eric Dixon is a New York lawyer and strategic analyst who has practiced law since graduating from Yale Law School in 1994.  Mr. Dixon has represented several former candidates for president and statewide office on election law and ballot access matters.  He represents businesses and individuals on matters including litigation and negotiating strategy, lawsuit stress management and handling government and private investigations.  He is available for comment or consultation at 917-696-2442 and via e-mail at edixon@NYBusinessCounsel.com.


Thursday, November 25, 2010

Politics, Criminalized: DeLay Convicted by Texas Jury

Who decides what activity should be a crime?  The people whose duty it is to make the law, or someone else?

Civics classes teach us that the law is made by the legislature and enforced by the executive (with the judiciary to oversee adherence to the federal and state constitutions).  However, over the last several decades the executive branch has expanded its power into the law-making realm, using its bureaucracy to determine what the law is and forcing the legislatures (on federal issues, this means the House of Representatives) to play catch up.

One way the executive branch can overreach is to use its prosecutorial powers to target certain people or activities it doesn't like...or to remain silent when one of its prosecutors down below on the chain of command "goes rogue."

Such seems to be the case with a Texas county-level prosecution of former Congressman Tom DeLay for campaign finance violations which seem to be, if not entirely legal, transgressions warranting a civil remedy such as a large fine, an agreement to cease and desist (or even relinquish one's office) or even some sort of other disqualifying sanction (like debarment from public contracts).  

The problem is where certain practices stop being legitimate campaign fundraising and jump from odious pay-to-play practices to the arguably criminal.  In DeLay's prosecution, the challenged activities (which arguably ought to be more regulated or outright prohibited) were considered by the State to have satisfied the elements of the crime of money laundering.  That charge was brought, because the campaign finance law enacted by the Texas legislature did not contemplate these activities being illegal.  Apparently, an omission from the criminal code is not considered a sign that the activity is legal; this implies that our legal system is changing from one in which the law tells you what you may not do, to one in which the law tells you only what you may do. Under this paradigm shift, the realm of the illegal is vast -- the polar opposite of what we are used to in this country. 

That's right, a statute more appropriate for organized crime and large narcotics operations is now being used as a way to silence political opponents.

On this road, anyone involved in politics -- warning: business is next -- could face prosecution and incarceration if they have powerful and ethically-challenged friends who have the power to bring these cases.

Such a prosecution imperils all manner of political speech and civic activity.  One can no longer freely engage in these activities while being completely free of the concern that opponents may seek your imprisonment!  Just think what could happen if you run a business, or if you even go to work, and you have a competitor or jealous colleague who merely has the ear of (or even worse, some sort of extortionate leverage over) someone with this type of police power.

Jail time does not seem to be appropriate for arguably legal campaign finance activities, and that is what DeLay faces in the wake of a jury finding him guilty of two criminal counts.

Even if the sentences on the two counts run concurrently (i.e. at the same time), DeLay faces a minimum of five years imprisonment.

If money laundering statutes can be used to imprison someone for political fundraising, can any business activity -- and anyone owning, running or working for a business -- be at risk?

Eric Dixon is a New York lawyer who represents small businesses and individuals on various matters. Mr. Dixon has been a practicing lawyer since graduating in 1994 from Yale Law School.  He engages in strategic analysis, investigative due diligence, regulatory compliance and lawsuit stress counseling.  Mr. Dixon is available for consultation or comment at edixon@NYBusinessCounsel.com. 

Wednesday, November 24, 2010

TSA and Plastic Gloves

The TSA's new practice of forcing air travelers to choose among the lesser of two evils (naked body imaging versus having one's genitals touched by strangers) provoked my absolute astonishment when I was first told about it by privacy activist Katherine Albrecht at a recent New York City Bar Association symposium on privacy, technology and regulation. Almost as if by coincidence, the news has been flooded ever since with new daily revelations and outrages.


Least among the concerns is the prospect of cross-contamination. That is the activity by which pathogens and other icky things are brought from their original location to a new location. Ordinary situations we always encounter involve touching any contaminated surface; think of a public restroom's door handle as the perfect disgusting example.


The TSA groping involves screeners wearing plastic gloves to touch multiple people in or near parts of the body which secrete fluids. Add in the transporting power of perspiration and the partial wicking of moisture away from clothes (and hence to the outside of one's garments), and even an over-the-clothes touching can result in host-to-glove transmission of nasty bugs like fecal coliform. That same glove may then be touching you.


The gist of the dilemma: You just don't know where that finger has been.


TSA workers may prefer you shower before flying. You should be advised to take a shower the first thing after flying.
____________
Eric Dixon is a New York lawyer, privacy rights activist and political consultant. Mr. Dixon has practiced law for 16 years since graduating from Yale Law School in 1994. Mr. Dixon handles strategic analysis, crisis management and lawsuit stress management counseling for clients. He is available for consultation or comment on the record at 917-696-2442 and via email at edixon@NYBusinessCounsel.com.



Monday, November 22, 2010

Christie Owes Quick Veto to Anti-Bullying Proposal

The New Jersey Legislature on Monday passed an anti-bullying bill that may protect the bullied -- but also may make many, many people increasingly vulnerable to all sorts of harassment, intimidation and retaliation. (Read the bill -- Assembly bill number 3466, also referred to as A.3466 -- as it came out of the Assembly committee, by clicking here.) 

Make no mistake, bullying has been a problem.  However, bullying is best solved by personal attention of the people closest to the issue: parents and teachers.  Laws are no substitute for a child -- or adult, of any age -- who feels unloved, abandoned or ignored.  That child doesn't want (or need) a new law.  That child needs the love, affection and attention of people who care.

In short, this bill is an example of a proposed law that should be evaluated, not on its intent, but on its likely effect. 

If the true, and unstated, goal is to have a bunch of state legislators pat themselves on the back for an anti-bullying measure (a necessity going into an election year), voting yes on the bill may do the job. 

However, measuring the effect is a different story (and one focus of Crime, Politics and Policy).

There is serious potential for mischief here -- and none of this has anything to do with stopping bullies.

First, the definition of "harassment" would be amended to include "an incident...[that would] substantially disrupt or interfere with the orderly operation of the school or the rights of other students" as well as "the creation of a hostile educational environment" for a student including anything which "severely or pervasively causing physical or emotional harm to the student."  All of these phrases will be defined, in New Jersey World, in the courts, meaning that you will have people hammered by this law who have done nothing wrong except get on the wrong side of someone in authority who has the ear -- and complicity -- of a regulator or prosecutor.  It will be too easy to fit speech -- or people -- you don't like into these definitions.

It's a good thing this law wasn't amended earlier, or else that Bergen County mother who cursed out a high school principal for what she thought was indifference to her daughter being "pantsed" would surely be in jail.   

Another problem is the section making "bias intimidation" a crime for which conviction is a disqualifying offense.  This gives prosecutors another hammer to pressure perhaps otherwise innocent people into accepting guilt for something they didn't do.  Besides, the entire concept of "bias" or "hate crimes" has too much potential to infringe upon constitutionally-protected (if unwelcome) free speech to be glossed over.  It is too easy, in an age of politically-ambitious or career-ambitious prosecutors and legislators, to take what is in reality disfavored political opposition and brand it as "bias" and a crime in order to intimidate and silence opposition.  This may be the concern behind the lone "no" vote by Assemblyman Michael Patrick Carroll (the Assembly voted 71-1 in favor with five abstentions, while the Senate vote was unanimous).

The bill also imposes reporting requirements on school administrators and teachers.  Expect a hypersensitivity to all sorts of benign behavior as a predictable and reasonable reaction by school employees, already fearful for their jobs, also afraid of losing their jobs "for cause" for failing to report anything that someone else might characterize as bullying. 

Note how none of the foregoing actually helps kids who are genuinely bullied. In fact, by creating the temptation for too many false alarms and bogus claims, legitimate cases of bullying become more likely to be ignored.  The problem is, one suspects this bill is not about protecting bullies.  It is about looking good.

This is one bill that Governor Christie should veto. 

Eric Dixon is a New York lawyer who handles strategic analysis, legal analysis and litigation stress consulting for clients.  He is available for comment or consultation at edixon@NYBusinessCounsel.com and 917-696-2442.





 

Saturday, November 20, 2010

Strategic Defaults: Criminal Bank Fraud?

Bank fraud today hurts all prospective borrowers tomorrow, and all bank depositors both today and tomorrow.  This is why Crime, Politics and Policy has a tiny box of tissues for that class of putative victim known as the strategic defaulter.  These professional deadbeats may be engaging in criminal activity which may warrant a close look by local authorities and perhaps even the Department of Justice.

The essence of mortgage fraud is a knowingly false or fraudulent representation by the borrower in order to induce the bank to hand over its money, either to purchase a property or cash out its equity.  The question with strategic defaulters like nationally-known foreclosure defense lawyer Peter Ticktin (in strategic default since December 2006, or four years ago, on a Boca Raton home he bought in 2004 for $650,000) is whether they lied to their bank about their true intent to pay in order to get a mortgage.  

Let's examine the similarity between a common type of mortgage fraud which, when discovered, is often prosecuted by your local United States Attorney's Office or county prosecutor.  The typical straw buyer fraud involves someone buying (or refinancing with a "cash out refinance") a house, using funds gotten from a bank under false pretenses -- the criminally, knowingly false or fraudulent representations in the mortgage application.  The essence of these lies is the representation that the buyer is going to live in the house and has both the ability and the intent to pay the mortgage -- to fulfill his part of the bargain.  The bank relies (at its own risk) on these representations to grant the loan. 

When the fraudulent straw buyer cashes out equity and vanishes, the bank is stuck with a nonpaying (and often nonexistent, totally phony borrower, thanks to fraudulent documents) buyer and collateral in the form of a house that often is actually worth far less than the appraised value of the house (the appraisal is often just as fraudulent, as it is prepared by an appraiser also in on the scam).  

The strategic defaulter does not lie about his ability to pay.  He may lie about his intent to pay.  Arguably, that is worse and more criminal, because this presents a homeowner who essentially declares, "I can pay you, but I'm just not going to.  Come and get me!"

The aforementioned Mr. Ticktin can use "changes in circumstances" and a two-and-a-half-year record of payment to explain that his ability to pay changed, and that his intent is not an issue. Others may not have so much luck explaining their strategic defaults as not involving some sort of nefarious intent to deceive or defraud their banks.
When you misrepresent or outright lie about your ability to pay back a loan in order to convince a bank to grant you a loan, that is a fairly clear case of bank fraud. It should be no different when the misrepresentation is not about the ability to pay a mortgage, but one's intent.

 
Eric Dixon is a New York lawyer who provides strategic analysis and litigation stress management consulting through his proprietary concern, Eric Dixon LLC. Mr. Dixon has been a lawyer since graduating from Yale Law School in 1994 and has substantial experience with complex business transactions, regulatory compliance and government and regulatory investigations. He may be reached for comment or consultation at edixon@NYBusinessCounsel.com and by phone at 917-696-2442.







Deadbeats' Defender Is Himself a Deadbeat

In a case that may warrant the attention of the authorities, a prominent foreclosure defense attorney in South Florida learned his trade by defending himself from foreclosure in what looks like a very intentional, strategic default that may be a form of bank fraud.

Peter Ticktin has not paid his mortgage since December 2006, according to this Sun-Sentinel of Fort Lauderdale report.  Ticktin is fighting his own foreclosure action on the basis of shoddy paperwork and the related concept that Deutsche Bank cannot prove it has standing to foreclose (i.e., he claims they don't hold the mortgage note).  (Background:  Public records show that Debra Ticktin is the sole owner of a home, purchased for $650,000 in May 2004.)

Just asking, but wasn't the typical homebuyer in 2004 in South Florida looking to score a quick profit in a housing market going up at an annual clip of 25 percent or more?  In other words, weren't many of these buyers consumed by greed? (That greed has since consumed them, you can bet, but in a different way.)

Due process and standing issues aside, just note that Ticktin -- an apparently successful lawyer with two offices -- has not paid his mortgage in four years.  His mortgage is reportedly over $574,000, but unless he was a subprime borrower with some sort of funky mortgage terms (like interest-only or negative amortizing), one has to assume the interest rate cannot be over six or seven percent a year and would thus produce a monthly payment obligation which cannot be over, say, $3,500-4,000 per month inclusive of taxes.

How is this that this man -- ostensibly well off with two law offices and a $6cannot pay this mortgage?

Why does one think that many of these delinquent homeowners are just doing strategic defaults, pocketing the money they're supposed to be paying, and trying to see how long they can get away with stiffing the bank holding their mortgage -- and by extension, the rest of the economy?

The more that the apparently able-to-pay borrowers get away with such intentional strategic defaults -- a form of a "tort" or civil wrong -- it encourages the rest of the borrowers who play by the rules to consider doing the same.  Bad behavior must be punished, or else it will be rewarded and it will increase.

In fact, cases like Ticktin make one wonder if a criminal investigation is in order, on the theory that a strategic default, in certain cases where the borrower is clearly able to pay the monthly payment, shows that the borrower took out a bank loan without a bonafide intent to maintain his obligations under the loan, while representing that he was able and willing to assume and fulfill those obligations in order to induce the bank to grant the loan. 

Ticktin bought his house (it apparently is in his wife's name as an extra way of asset protection) about 30 months before defaulting, and within a year of the South Florida property market bubble bursting with amazing speed.  If he had bought it and defaulted much quicker after the purchase, it would create a fact pattern much more similar with the "traditional" mortgage fraud cases.  In such cases, so-called straw buyers take out "cash out" mortgages with banks -- often using entirely fraudulent documents and sometimes with the assistance of collaborators inside the banks --  get the cash back and then disappear, usually without even making the first payment.  

The bank gets stuck with a nonpaying and often entirely-fraudulent mortgage, and is out the entire cash payment.  The bank ostensibly has collateral -- the house -- but the appraisal of that house has often been inflated or also entirely fraudulent, and since then actual values have dropped. 

The essence of mortgage fraud is a knowingly false or fraudulent representation by the borrower in order to induce the bank to hand over its money, either to purchase a property or cash out its equity.  (Reminder:  Bank fraud today hurts all prospective borrowers tomorrow, and all bank depositors both today and tomorrow.)  The question with strategic defaulters like Mr. Ticktin (who should not receive special scrutiny because of  his professional activities, by the way) is whether their pre-purchase representation as to their intent to pay was fraudulent.  The typical straw buyer fraud explained above has a much closer proximity between the time of the fraudulent representation and the default.   Here, Mr. Ticktin can use "changes in circumstances" and a two-and-a-half-year record of payment to explain that his ability to pay changed, and that his intent is not an issue.  Others may not have so much luck explaining their strategic defaults.

When you misrepresent or outright lie about your ability to pay back a loan in order to convince a bank to grant you a loan, that is a fairly clear case of bank fraud.   It should be no different when the misrepresentation is not about the ability to pay a mortgage, but one's intent.

Eric Dixon is a New York lawyer who provides strategic analysis and litigation stress management consulting through his proprietary concern, Eric Dixon LLC.  Mr. Dixon has been a lawyer since graduating from Yale Law School in 1994 and has substantial experience with complex business transactions, regulatory compliance and government and regulatory investigations.  He may be reached for comment or consultation at edixon@NYBusinessCounsel.com and by phone at 917-696-2442.

Thursday, November 18, 2010

Islanders on Brink of Bankruptcy?

The New York Islanders hockey club may be on the brink of bankruptcy.  This is pure speculation, but a logical strategic analysis of certain facts points to this being a reasonable scenario. 

If this scenario comes true, it would mean Islanders owner Charles Wang might be following the moral hazard example set by former Phoenix Coyotes owner Jerry Moyes.  Follow the logic.

Moyes was reportedly losing $30-35 million per year on the Coyotes, had declining attendance and, in the depths of the 2008-09 credit crunch, probably saw even worse prospects.  Moyes allegedly encountered interference from the National Hockey League with his plans to sell the team to a willing buyer, Research in Motion's founder Jim Balsillie, who planned to move the Coyotes to Hamilton, Ontario.  (The league wanted the club to stay in Phoenix, for reasons that are not entirely justified, in my thinking, by a desire for United States television money.  Crime, Politics and Policy questioned the economic viability of the Phoenix Coyotes, and the league's efforts to keep the club in Arizona, in November 2009.)

Thwarted in his legitimate attempts to sell his deteriorating asset, and likely (and justifiably) sick and tired of losing oodles of money, Moyes threw the franchise into bankruptcy in May 2009 as a last-ditch attempt to sell the club and realize some return on his losing investment.  The league fought the bankruptcy and ultimately agreed to buy the club out of bankruptcy -- thereby rewarding Moyes with his cash-out exit strategy -- in order to prevent a privately-negotiated sale to Balsillie with the bankruptcy court's approval. 

The lesson:  Moyes played hardball, or what the Delaware chancery court has called "greenmail."  This is a nice way of saying, I want my price...or else.  Moyes used a "screw you" attitude -- hey, fellas, sports is business, after all -- and got his relief in the end. 

In the parlance of today's economy and regulatory climate, Moyes got his bailout.

Why wouldn't you think Islanders owner Charles Wang wasn't taking notes, and now planning to do the same?

After all, Wang already played the white knight, rescuing his hometown club in 2000 from previous owners (Howard Milstein, Steven Gluckstern) who saw -- but couldn't realize -- a real estate development opportunity and decided to basically strip the team and reduce its budget to the minimum in order to cut losses while putting it up for sale.  (From a business perspective, was that wrong?).   Wang and his co-owner Sanjay Kumar (now an admitted felon thanks to the thirty-five-day month and other accounting frauds at Computer Associates) bought the Islanders (including the team's cable television rights) for about $200 million in 2000.

Since that time, Wang had to buy out Kumar.  This may have been at a loss.  That's on top of Wang's likely loss on his initial investment.  And then factor in the reported annual losses of at least $10 million per year from the Islanders' ongoing operations.  (Thanks to the league-mandated salary floor, the Islanders are now required to spend a minimum of $39 million on player salaries -- about double what the salary expense was when the Islanders were rock-bottom under previous ownership -- and recent reports peg those annual losses at $20-25 million.) 

Take these figures, and you can easily extrapolate them and infer an aggregate operating loss of $100-200 million...or more...on top of a deteriorating franchise value.

But wait, there's more.  Wang saw a chance to build a Long Island destination, the Lighthouse Project.  (Sound familiar?  Milstein and Gluckstern were also developers, but they bailed when they could.)  This project also met considerable political opposition in 2009, after which Wang has publicly said that "all options" regarding the franchise's future on Long Island are on the table.

Maybe Wang has had enough.  Maybe he has lost enough money -- and he has lost plenty of money.  Maybe he now sees no end to the losses.

In business, owners and managers who want to "cash out" look for what's called an "exit strategy" to liquidate their investment.  Here, you have an illiquid investment, losing money every day with marginal prospects for improvement and perhaps no viable way to turn a profit at any reasonable price point for tickets (even if all games are sold out).  Therefore, Wang may have to sell the club to get anything back. 

This is where bankruptcy comes into play.  If there is no willing buyer -- that is, willing to buy the club at the price Wang wants -- why wouldn't Wang throw the Islanders into bankruptcy?  After all, he can use the Phoenix Coyotes as a roadmap for how to get his price, if not from a true buyer, then from the National Hockey League.

But even this scenario has its flaw.  Wang would have to assume that the NHL values the Islanders as a New York franchise, one of three in the market, more than it would value the Islanders in a different market like Portland, Oregon or even Winnipeg, Manitoba.  The Islanders were a stored, model franchise -- a quarter of a century ago.  

Twenty-five years ago, the model baseball team may have been the Kansas City Royals.  The same Royals who now can't avoid losing 90-100 games every year and drawing less than 20,000 fans a game.

Twenty-five years ago, one of the three model basketball franchises was the Philadelphia 76ers.  The 76ers are a nearly moribund franchise now, the fourth team in a four-team city.

Times change.  The Islanders of yesteryear are gone.  The team may not be economically viable on Long Island without a new arena.  And if there's no prospect of getting one, why wouldn't ownership look to move or, failing that, to cut costs as much as possible to attract a buyer -- or declare bankruptcy to force the league to cash Wang out?

Eric Dixon is a New York lawyer with substantial experience in business transactions and the securities laws.  He is president of Eric Dixon LLC, a privately-held concern which provides strategic analysis, crisis management and litigation stress management.  Mr. Dixon has been a lawyer since graduating from Yale Law School in 1994.  Mr. Dixon is available for consultation or comment at edixon@NYBusinessCounsel.com and by phone at 917-696-2442.

The Confidence to Accept Criticism

A very common flaw among management is the refusal to acknowledge past mistakes.

Some fear that admitting that "things haven't worked out as we expected" is some sort of sign of weakness. It is not. Not if the strategic analysis that supported the original decision was sound (in which case the strategy was correct but the results were not as planned). In such a case, admitting disappointment in results can be construed as a sign of confidence.

Certainly, failure is not the same as a mistake.

The admission of failure, subpar results, poor performance, etc. could be interpreted by others as a sign of incompetence. Those "others" are in many cases naysayers whom you'd never win over if you walked on water and cured cancer tomorrow.

I contend that acknowledging the obvious sends messages that management knows what it's doing...and that it is confident enough in its abilities that it can admit failure (which is different than a mistake). The conveying of this message, and the demonstration of candor, shows both confidence in oneself (or the team) and a respect for the customer base.

Now contrast this confident approach with the panic surrounding the New York Islanders hockey club. The Islanders had serious playoff hopes this year and counted on young prospects (former top draft picks) to lead the charge.

Things did not work out as planned. The Islanders have not won in one month (since October 21st to be exact). An 11-game losing streak resulted in their coach being fired. The team's offense is in a rut so bad that it is comparable only to a stretch of futility in the Islanders' first season, 1972-73. That season, the Islanders lost 60 of 78 games.

Instead of fixing the offense, the Islanders fired their coach. Next, they revoked the press credentials of the popular fan blog "Islanders Point Blank" which is run by none other than the Islanders' former 20-year public relations director Chris Botta.

Think that was a fan-friendly move? The announced crowd for the Islanders' Wednesday game: 8,025. That's less than 50 percent capacity.

Should this mismanagement continue -- and that means the anti-blog, anti-fan actions which are enraging a loyal but oft-abused fan base -- the few players worth keeping around will look to flee the Islanders organization when their current contracts expire. That would be a disaster. See what fear of criticism can do?


Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Two Madoff Aides Arrested

Multiple reports today that Bernard Madoff aides Annette Bongiorno and Joann Crupi were arrested today and will be charged with crimes arising from the huge Madoff scandal.

As an observer of this case I can tell you both Bongiorno and Crupi's names have surfaced in earlier speculation. Both women worked for Madoff for more than 25 years.

Just as with Madoff, the same long-running, patient investigation should be progressing with the crimes of former superlawyer Marc Dreier.

Watching...and waiting.

Patience wins in the end.


Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Wednesday, November 17, 2010

Genetic Mom Ignored On Birth Certificate

In a startling New York case sure to raise eyebrows, a Nassau County Supreme Court judge refused to order the issuance of a baby's birth certificate naming the genetic mother -- the mother whose egg produced the baby -- as the mother instead of the surrogate mother.  Notably, this decision was rendered despite the agreement among the genetic mother and surrogate mother than the genetic mother's name should be on the birth certificate.  (Before you read further or click the link, be advised that the genetic parents are in the process of formally adopting the child who is 100% the product of their genetic material.)

This decision does recognize the role of the State Legislature in crafting a solution. Nevertheless, the decision voices two troubling paradoxes.  The first is that a baby can have two mothers under the law.  This involves a disturbing uncertainty over how one defines "mother."  (Currently the New York Domestic Relations Law contemplates both a genetic and surrogate mother.)  The second is that there can be only one paternal genetic contributor -- in plain English, the father -- and that very much unlike the maternal genetic contributor (i.e., the genetic mother, as distinguished from the "carrier" or the surrogate mother whose uterus is subleased), the man who makes a genetic contribution faces an 18-year-long financial obligation.   Yet a woman whose contribution is equal, but for the missing Y chromosome, not only faces no such obligation but may actually endure uncertainty over whether her maternity may be recognized by the courts.

This sounds like a violation of the equal protection clause of the Fourteenth Amendment, by fundamentally disparately treating male and female genetic contributors.  It raises another question -- that of what types of relationships by non-genetic parents can give rise to those people having "rights" over a child who is not theirs?  Will we now have scheming nannies seeking to shake down their wealthy employers by charging that they should be declared "the real parents."  What about jealous -- or plainly evil -- grandparents, in-laws or other miscreants? 

The issue, by extension, becomes one of how the bonafide parental rights can be eroded, either by jealous caregivers, extortionists and criminals, or the courts.

This is very serious.  There cannot be a more bedrock, fundamental human right than the right to be a parent and to care for one's own child.  Any legislative or judicial interference with such a right, especially in this Nassau County case where the natural parents had the support of the surrogate, must be viewed with alarm and responded to with alacricity.   This case will raise new issues of how our society, laws and courts define a mother and father


 Eric Dixon is a New York lawyer who provides legal analysis, litigation stress consulting and strategic analysis through his firm, Eric Dixon LLC.  Mr. Dixon has been a New York lawyer since graduating from Yale Law School in 1994.  Mr. Dixon has represented over two dozen political candidates and organizations on election law and policy matters.  Mr. Dixon opines regularly on public policy and legal issues and is available for comment and consultation at edixon@NYBusinessCounsel.com and by phone at 917-696-2442. 

You Need To Have a Plan

Patience can be very effective in executing a plan. This is true whether you are starting a business, managing a business, doing a job search, planning a career change, managing a portfolio, looking for a mate, or running a dilapidated sports franchise.

The New York Islanders have been a perennial doormat of the National Hockey League for a full generation. This is a franchise that won four championships (called the Stanley Cup, for you non-hockey fans) in the early 1980s. During that time, they had one coach (Al Arbour), one general manager (Bill Torrey), and such little player turnover that one can name about a dozen players who stayed on the team from 1977-84. In that span, the Islanders made it to the playoff semifinals each year but one.

Think the discipline to stick to the plan had anything to do with that success?

The current generation of Islanders fans has seen the opposite in execution. The Islanders routinely change operating philosophies and personnel. Since Arbour retired in 1994, no Islanders coach has lasted three seasons. New hires come in, blame the predecessor, change strategies, and so on.

The essence of the advice followed by the Islanders is this: Write two letters.

The first reads: blame your predecessor.

The second reads: write two letters.

The lack of continuity, of basic strategic planning, will handicap any endeavor. For the Islanders it is continuing a long, downward spiral of deterioration. Until the core philosophy changes, the results will be the same.

Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Tuesday, November 16, 2010

Private Internet Searches and the Attorney-Client Privilege

Internet searchers afraid that Google records and retains data about their searches, and other data in order to do behavioral analysis (whether for marketing or other purposes) may want to try out http://www.startpage.com.

The Startpage engine promises anonymous internet searching. In addition, a newer feature called Startingpage promises Google search results while also providing a buffer (or anonymous cloaking) for users.
This may be a very worthwhile search engine tool for those people afraid that Google is tracking the web browser activity of anyone who uses its sites.

This search engine tool should be of particular interest for those professionals whose work activity involves sensitive or confidential information. High-ranking business executives, government officials, investigators, auditors and almost all lawyers should consider using a cloaking service such as Startpage to enhance their anonymity and protect the confidentiality of their clients and their data.

Lawyers -- particularly anyone involved in criminal defense, regulatory defense, government investigations or internal investigations -- should be especially interested. The attorney-client privilege can be compromised if there is no reasonable expectation of privacy in a communication. There is a possibility that courts could rule that the client's privilege as to his/her communications with his/her lawyer may be lost, due to electronic communications that may be so readily accessible (that is, by being interceptible) that there was no legitimate expectation of the confidential nature of the communication being preserved. The result could be the admission into evidence of communications between lawyer and client which the client thought were confidential. Cases can be lost on such decisions; criminal cases may also be lost or become more likely to result in guilty pleas. And as communications can led to multiple inferences (including clearly erroneous ones), one can see the potential for miscarriages of justice and even wrongful investigations, prosecutions and convictions on the basis of revealed, intended-to-be-confidential communications which are taken out of context and manipulated.

The consequences of this development could be far-reaching. Such a ruling could deter clients from sharing vital -- and perhaps case-breaking or deal-breaking -- data with their lawyers. This would make lawyers' jobs more difficult, and raise the specter of lawyers being more easily accused of negligence, incompetence or malpractice. One can even see the day when lawyers' professional malpractice policies preclude or restrict their internet communications as a condition of the policy being granted. And what's the next domino to fall? Lawyers may stop doing certain investigative work (not that many are doing it now, much less doing it well) or even avoid taking certain cases because of the enhanced risk of being sued for malpractice.
______________
Eric Dixon is a New York lawyer who handles regulatory and investigative matters, litigation stress counseling and related matters.  He accepts press and client inquiries for comments or consultations by e-mail at edixon@NYBusinessCounsel.com and at 917-696-2442. 


Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Private Internet Searches

Internet searchers afraid that Google records and retains data about their searches, and other data in order to do behavioral analysis (whether for marketing or other purposes) may want to try out http://www.startpage.com.

The Startpage engine promises anonymous internet searching. In addition, a newer feature called Startingpage promises Google search results while also providing a buffer (or anonymous cloaking) for users.

This may be a very worthwhile search engine tool for those people afraid that Google is tracking the web browser activity of anyone who uses its sites.

This search engine tool should be of particular interest for those professionals whose work activity involves sensitive or confidential information. High-ranking business executives, government officials, investigators, auditors and almost all lawyers should consider using a cloaking service such as Startpage to enhance their anonymity and protect the confidentiality of their clients and their data.

Lawyers -- particularly anyone involved in criminal defense, regulatory defense, government investigations or internal investigations -- should be especially interested. The attorney-client privilege can be compromised if there is no reasonable expectation of privacy in a communication. There is a possibility that courts could rule that the client's privilege as to his/her communications with his/her lawyer may be lost, due to electronic communications that may be so readily accessible (that is, by being interceptible) that there was no legitimate expectation of the confidential nature of the communication being preserved. The result could be the admission into evidence of communications between lawyer and client which the client thought were confidential. Cases can be lost on such decisions; criminal cases may also be lost or become more likely to result in guilty pleas. And as communications can led to multiple inferences (including clearly erroneous ones), one can see the potential for miscarriages of justice and even wrongful investigations, prosecutions and convictions on the basis of revealed, intended-to-be-confidential communications which are taken out of context and manipulated.

The consequences of this development could be far-reaching. Such a ruling could deter clients from sharing vital -- and perhaps case-breaking or deal-breaking -- data with their lawyers. This would make lawyers' jobs more difficult, and raise the specter of lawyers being more easily accused of negligence, incompetence or malpractice. One can even see the day when lawyers' professional malpractice policies preclude or restrict their internet communications as a condition of the policy being granted. And what's the next domino to fall? Lawyers may stop doing certain investigative work (not that many are doing it now, much less doing it well) or even avoid taking certain cases because of the enhanced risk of being sued for malpractice.

______________
Eric Dixon is a New York lawyer who handles regulatory and investigative matters, litigation stress counseling and related matters.
Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Anti-Bullying Law Advances

New Jersey students are going to be driven to the internet to socialize much more. That will be one unintended consequence of an anti-bullying law that would require teachers to act to prevent bullying and other forms of intimidation, which has advanced through the New Jersey State Senate on the rocket fuel provided by the exploitation of the Tyler Clementi suicide (or murder?). Tearful testimony from parents of bullied children preceded a Monday vote.


As with most legislation, be wary of how vague the definitions are for certain terms. It is very tough to draw the line between regular interaction and sanctionable bullying, particularly when the standard may arise from the subjective feelings of the victim.


One unintended consequence is that teachers will need to monitor and discipline students much more, not so much to control students as to avoid liability for "negligence" in "not doing their job."


Another unintended consequence will be much more student interaction on the internet. In-school and near-school socializing, subject to regulation, will decrease. Teenagers will go to Facebook to avoid the prying eyes of teachers and school administrators, just like they do with parents now. Another example of how attempts to modify behavior too often backfire.


Bullying is a problem. Has been a problem. But the solution isn't regulation or more laws. Or even jail time for bullies. We need an attitudinal shift, an intolerance of bad behavior. Social pressure and the pressure to conform can sometimes be the best deterrent.

Eric Dixon is a New York lawyer.  The comments in this article are opinions and are meant for informative purposes only.  Mr. Dixon provides legal analysis and strategic analysis on a fee-for-service basis, and also will make comments for reputable news media sources.  He can be reached at edixon@NYBusinessCounsel.com and by phone at 917-696-2442


Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Monday, November 15, 2010

When You're Wang, You're Wang

The New York Islanders used to be the model franchise of the National Hockey League. Just three years after playing its first game as an expansion club in 1972, the team came within one game of the Stanley Cup finals in 1975, and later won four Cups between 1980-83. The team sold out almost every game.

Fast forward a quarter-century. Most Islanders club owners have had legal troubles, the fan base has steadily eroded (a far-reaching consequence of shifting all games to cable back when cable TV was accessible only in high-density or affluent areas) and the team has been at the bottom of league standings for most of the last 20 years.

The Reign of Error continues. This morning, the club fired coach Scott Gordon. The move suggests Gordon was responsible for a 10-game losing streak. In fact, the move is just another sign of impatience and impulsiveness, in this case of an owner -- former Computer Associates founder Charles Wang (pronounced, "Wong") -- who wants to be hands-on yet admits he needed to read "Hockey for Dummies" when he bought the franchise in 2000.

Wang clearly cares about his business -- that is, the Islanders and/or the untapped real estate development potential Wang sees for a new arena/convention center (such as his proposed Long Island Lighthouse).  Reportedly, Wang has lost between $150 million to $250 million during his decade of owning the Islanders; in addition, it is likely the Islanders ae worth considerably less than its original purchase price.  An uncaring owner would have shut the doors, filed for bankruptcy and sold the franchise to an out of town group.  Wang's financial patience, however, has not extended to his "customer service"-- meaning, the product. 

While Wang has apparently been very patient in trying to rebuiild the franchise's value, the constant upheavals every two years just continue to delay any renewal of the on-ice product, in turn delaying the restoration of the overall franchise's value.  Those qualities of impatience and impulsiveness are bad, for investors, farmers or litigants. Patience is a virtue, especially in those fields.
________

Eric Dixon is a New York lawyer who advises on litigation stress management and helps litigants cope and prepare to survive grueling litigation. He is available for comment or consultation at 917-696-2442 and by email at edixon@NYBusinessCounsel.com.

Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
917-696-2442

Human Chip Implant Rumor of the Day

Here's something unverified but passed on from a reliable source:

Reportedly, RFID chips (miniature chips that can be embedded in things like clothes, pills and your skin and allow for both tracking your whereabouts and storing information) are not currently being manufactured.  Someone who worked with the CIA claims that more than six (6) billion implantable RFID chips--one for every man, woman and child--already have been manufactured and are being stored in a warehouse in Atlanta, Georgia.  (Stored by whom?) According to him, we are just waiting for a directive to be issued in response to the right kind of emergency in order to justify their use. 
(But what type of use? For human implantation? Or regular inventory tracking? Or are humans now inventory?)

Readers, is this a concern for you?

Eric Dixon
Eric Dixon LLC
World-Class Strategic Analysis
edixon@NYBusinessCounsel.com

Housing Bubble Villains: The Sellers

It is largely accepted that many underwater homeowners today are victims. The premise of that notion is that the homeowners would not be underwater if not for those dastardly, evil banks who forced these people to sign paperwork to borrow other people's money to buy homes...not coincidentally, at a time when house prices were increasing 15 percent a year on average.

The related concepts, that the homes were overvalued and that banks fed the pre-2007 bidding wars with easy money (OPM), involve a truism that is ignored. If the party on one side -- the homeowner-buyer -- is a victim, doesn't that make the party on the other side some sort of villain?

That other side party would be the home seller. Those people who sold their homes for perhaps double their "true value."

Ordinarily, if one side of a deal is entitled to relief, there is the implication that the other side did something to cause the damage to be relieved.

We aren't hearing this argument. Maybe, just maybe, that's because there's nothing to relieve. Maybe the underwater borrowers are not real victims. Just maybe.

Eric Dixon is a New York lawyer and provides strategic analysis, litigation stress management and consulting as president of Eric Dixon LLC. He is available for comment or consultation at 917-696-2442 and via email at edixon@NYBusinessCounsel.com.

Thursday, November 11, 2010

Your Cookie Monster

A handy, casual layperson's reference to anti-web tracking devices is provided, courtesy of this recent New York Times article.  The article gives some easy pointers on how to delete cookies, which are the primary means by which a web user's traffic can be monitored by third parties.

Forcing Good Lawyers Out?

There is an interesting -- some would say, alarming -- new criminal prosecution of a high-ranking assistant general counsel, Lauren Stevens, at GlaxoSmithKline for allegedly making false representations in advocacy correspondence with the Food and Drug Administration.  (There was also an article in the National Law Journal, available at www.law.com.)

Lawyers often base their judgments and statements on information and representations provided by a client, and do not investigate or try to independently verify the accuracy or completeness of such information or representations. Trying to do so can be difficult; it requires the client's cooperation, after all.

This prosecution is another step towards new, government-imposed obligations on lawyers. It sends the implicit message that advocacy on behalf of clients interacting with the government puts the lawyer at risk, as advocacy disfavored by the government can become the basis for a "crime.".

It also sends a secondary, less noticed but more troubling message: Any representation by a lawyer to the government that fails to say exactly what the government desires can be viewed as criminally misleading, and the party getting prosecuted is not the supposed wrongdoer client, but the lawyer!

This is a recipe for some arbitrary prosecutions. It also creates a moral hazard, as it can encourage wayward clients to do wrong, deceive the lawyers (or auditors - another profession at risk), and then when they get caught, blame the lawyers.

Why is the government bent on intimidating lawyers, some of the people most inclined and able to fight injustice and expose wrongdoing?


If the Stevens prosecution sets a new standard, any lawyer risks imprisonment any time he or she communicates with the government.

Jailing lawyers for disfavored advocacy is something that happens in Iran. It should not be allowed to happen here.
___________________

ERIC DIXON is a New York investigative lawyer who specializes in strategic analysis, legislative and privacy advocacy and various investigative matters. He is available for comment or consultation at 917-696-2442 and by e-mail at edixon@NYBusinessCounsel.com.

Tuesday, November 9, 2010

Technology Dangers to Privacy: Bar Association Symposium Addresses Possible Solutions

The dangers of technology and the threats to our privacy and other freedoms take center stage tomorrow night (Wednesday, November 10th) at a New York City Bar symposium which is free to the public (registration required, see below) and highly recommended. 

Details follow below:

SYMPOSIUM: RACE AGAINST THE MACHINE: PRIVACY, SECURITY AND REGULATORY CONCERNS IN THE FACE OF RAPID ADVANCES IN TECHNOLOGY


Date and Time: Wednesday, November 10, 2010, 6:00 p.m.


Place: New York City Bar Association, 42 West 44th Street, New York



Emerging technologies have the potential for abuse and misuse in ways that uniquely challenge our regulatory and legal systems. Hear a panel of experts discuss the larger implications of technologies such as satellite imaging, through-the-wall photography, biometric information storage, Cloud Computing, facial recognition software, remote activation, RFID product tagging, and RFID human implants, and their impact on constitutional rights, privacy interests, and national security.



Moderator: Professor Jeffrey R. Rosen, George Washington University Law School


Panelists:


Dr. Katherine Albrecht, Privacy Expert and Author, Spychips


Dr. Keith Aliberti, Chief, Optics and Photonics Integration Branch, U.S. Army Research Laboratory


Ginger McCall, Esq., National Security Counsel, Electronic Privacy Information Center


David Szuchman, Esq., Chief, Cyber Crime Division, New York County District Attorney


Sponsored by: Committee on Science and Law, Subcommittee on Technology Regulation.


The complete agenda is available at http://www.nycbar.org/.


There is no fee to attend but online registration is required at http://www.nycbar.org/.

Eric Dixon is a New York lawyer who provides world-class strategic analysis and legal consulting through Eric Dixon LLC.  He is available for comment at 917-696-2442 and by e-mail at edixon@NYBusinessCounsel.com.






 

Friday, November 5, 2010

SEC Whistleblower Proposal Makes Lawyers Designated Scapegoats


Beware of Greeks bearing gifts, or a mousetrap holding cheese.

The Securities and Exchange Commission came out Wednesday with a proposal (PDF document) for rules to incentivize "eligible whistleblowers" to come forward with "original information" and report suspected violations of the federal securities laws.  The proposal is prompted by the recently-enacted Dodd-Frank Wall Street Reform and Consumer Protection Act.  Dodd-Frank requires the SEC to reward whistleblowers and penalize companies from retaliating against whistleblowers.
  
The proposal excludes lawyers, auditors and others in "those groups with established professional obligations that play a critical role in achieving compliance with the federal securities laws." (Go to the introduction on page 5, and the later discussion of proposed Rule 21F-4(b)(4) on page 19.)   The idea is that these people -- particularly lawyers -- would come into contact with information about securities violations through their involvement in a confidential attorney-client relationship.

The proposal -- specifically the proposed Rule 21F-4(b)(4) -- is flawed.  It puts these classes of professionals -- attorneys and auditors in particular -- at risk of ultimately being held liable (civilly or criminally) for the noncompliance or deliberate violations by other people. 

The premise of the 21F-4(b)(4) exclusion is that the attorney's and auditor's job is to ensure compliance with the federal securities laws.  The problem is that the drafters of this rule have not envisioned the scenario of the deliberate miscreant client, who not only is inclined to deceive, defraud and lie to his attorneys and auditors, but also to try to use their services to commit, conceal or continue a securities violation.  

Attorneys and auditors have many responsibilities.  The SEC proposal continues the troubling premise that attorneys and accountants are not just supposed to advise and watch for compliance, but to ensure -- in fact, to guarantee -- compliance. This becomes a problem when there is a client who is incorrigible, or when others "up the ladder" to whom the problem is reported decide to ignore it. In those scenarios, attorneys and auditors are professionally precluded from revealing certain violations. For example, lawyers face disbarment for revealing a client confidence unless they can prove a crime or fraud is ongoing and have the fortitude to wait years for their suspicion to be validated.  Under the SEC's view, such professionals are frozen in place, without the freedoms to report suspected violations which everyone else has, including many nonprofessionals whose motives will be less than pure.  But it get worse.   Attorneys and auditors are the government's designated scapegoats. 

Since the Enron fraud, there have been attorneys and auditors who have been threatened with debarment from SEC practice, and even with civiil lawsuits and criminal prosecution, for allegedly failing to meet a strict liability standard, that is, for failing to prevent their client's alleged violation.  The responsibility of not violating the law should be that of the client -- the actual violator.   The responsibility should never be allowed to be shifted to non-culpable parties tasked with an impossible, thankless job. 

The SEC's proposed Rule 21F-4(b)(4) is the latest demonstration of the SEC's contempt for attorneys and auditors as the designated wrongdoers.  Under this misguided world view, attorneys and auditors are supposed to "do their job" (however that is defined in SEC-land by someone who may well be "making it up as they go along"), keep quiet about client confidences, seek no rewards, and then be willing to be subject to being the designated scapegoats for plaintiffs, regulators and prosecutors who want someone to blame and are looking for the most vulnerable and easiest targets to pursue and pressure.

In such an environment, who would want to be a lawyer or auditor and face this immense downside, while being specifically excluded from any reward -- if there ever is any real reward for being a whistleblower?  The conspiracy theorist might think that this is the exact purpose: to drive out of the legal and auditing professions those people who are precisely the most able, and inclined, to detect, deter and report wrongdoing (subject to the applicable limitations of the attorney-client privilege).  Maybe Jesse Ventura (former Minnesota governor turned TV host of a TruTV network show actually called "Conspiracy Theory" might be interested in this.

Why is the SEC seeking to exclude -- and through such exclusion effect a punishment upon -- members of the two professions whose members may possess the skills, acumen and instincts to detect problems, irregularities, fraud or outright criminality?

Is it the smartest philosophy for our government agencies, tasked with policing our financial markets, to simultaneously (and unjustly) impose virtual strict liability compliance burdens on attorneys and accountants while then expecting these people to continue to be altruistic?  Is this good policy?  Or is it just another mistake by the SEC? 
  
Eric Dixon is a New York small business lawyer and 1994 graduate of Yale Law School.  Mr. Dixon is the president of Eric Dixon LLC.  Mr. Dixon offers world-class strategic analysis, business and investigative due diligence and negotiation, mediation and settlement services to businesses and individuals and political campaigns.  Mr. Dixon has an extensive background in the American federal securities laws, complex business transactions, compliance and related issues involving government investigations and internal investigations.  Mr. Dixon is available for comment or consultation at 917-696-2442 and by e-mail at edixon@NYBusinessCounsel.com.


Wednesday, November 3, 2010

Green Party Gets Official Ballot Status

There should be at least one new, officially-recognized political party in New York starting in 2011. The Green Party's gubernatorial candidate Howie Hawkins was within ten votes of crossing the magic 50,000 vote requirement under New York's Election Law. Reaching that number will allow the Green Party to become an official "party," which means the party can run candidates on its line in all elections in the state for the next four years.

This is a big deal. Without official party status, someone wanting to run as a "Green Party" candidate for Congress would need 3,500 signatures (from any registered voter who didn't sign another petition for that race). With official party status, that candidate would need only the lesser of 1,250 signatures or signatures equal to five percent of the party's enrollment in the district. As a new party would only start to gain enrolled members when it becomes official, one can presume that the number of enrolled members would be fairly small -- let's assume a few hundred at most (it may be closer to a few dozen). That candidate might only need a handful of signatures -- single digits perhaps -- to get on the ballot.

That's a far cry from 3,500. That's much, much easier for a candidate to achieve. Especially without money.

Now you can see why the third parties value official party status so much.

Surprisingly it seems other parties did not fare well. The Libertarian Warren Redlich may hit the 50,000 mark, and may come close enough that a legal challenge on the basis of votes allegedly denied or discouraged because of technical problems with the new scanner voting machines may be worthwhile.

Stay tuned.

About the author: Eric Dixon is a New York lawyer who has represented about two dozen candidates in election law matters since first starting as a petition coordinator for Ross Perot in 1992. Mr. Dixon is a 1994 graduate of Yale Law School and offers world-class strategic analysis and litigation stress management counseling. He represents clients on business and strategic matters, disputes and negotiations. He is available for comment or consultation to prospective clients at 917-696-2442 and accepts inquiries at edixon@NYBusinessCounsel.com).


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