Business Law Newsletters

Antitrust Liability Limitations for Standards Development Organizations

Under the Standards Development Organization Advancement Act of 2004, a standards development organization (SDO) that registers with the Department of Justice and the Federal Trade Commission will not be subject to treble damage liability in private antitrust actions. Also, the rule of reason rather than a per se illegal analysis will be used in evaluating the anti-competitive effect of any alleged antitrust violations by a registered SDO.

Independent Director Requirements for Companies on the New York Stock Exchange

Independent directors must make up the majority of the board of directors of any company listed on the New York Stock Exchange, according to NYSE Rule 303A.01. The board of directors of each company on the Exchange is responsible for determining that each of the listed company's independent directors meets criteria for independence.

Insider Trading

(Bounties for Persons Reporting Insider Trading)

Failing Company Defense

A merger or acquisition that has the potential to lessen competition significantly may violate Section 7 of the Clayton Act, 15 U.S.C.S. § 18. However, a "failing company" defense has emerged from case law and legislative history of an amendment to Section 7 that allows an acquisition or merger to proceed if the company being acquired is subject to imminent bankruptcy or liquidation, and the acquiring company is the only prospective purchaser of the failing company.

Breakpoints in Mutual Fund Charges

Mutual funds may offer "breakpoints" in their front-end sales load. Thus, a fund that charges a fee of five percent for investments up to $25,000 may charge only four percent for investments from $25,000 to $50,000 and three percent for investments over $50,000. The fund has breakpoints at $25,000 and $50,000.