Smart contracts are self-executing transactions that are written in computer code often utilized to “facilitate, execute, and enforce agreements between two or more parties.” While the term might sound new to some, the phrase was actually coined in 1994. The concept behind a smart contract is rooted in basic contract law; offer, acceptance, and consideration are all necessary, but smart contracts are enforced by different means. A key advantage of using smart contracts is efficiency. Once uploaded to the blockchain, smart contracts do not rely on a third party for recordkeeping or enforcement. Because they are self-executing and stored on a shared platform, smart contracts could potentially eliminate the manual effort currently necessary to execute domestic and international financial transactions.
Read MoreAn initial coin offering (ICO) is the term used to describe the method that a crypto firm or company utilizes to raise capital to fund a particular venture or project through the sale of its tokens. While an ICO is similar to the concept of raising capital by selling shares of stock, it is also different because the crypto firm is selling a digital asset (i.e. a token). The tokens can be utility tokens meaning the investor can use the tokens to access a product or a service or the tokens can be security tokens meaning the investor has some type of an investment stake. Another significant difference is that investors in ICOs do not generally have an ownership interest in the crypto firm, like a purchaser of common stock. Though this difference in investment may change with the advent of equity tokens. Yet, similar to owning stock, investors earn a return as a result of an increase in the value of their tokens, whether as utility or security token holders.
Read MoreBest known for its role in the rise of cryptocurrencies like Bitcoin, blockchain is a revolutionary technology that has the potential to transform how business transactions are conducted. For now, blockchain is primarily applied in digital financial transactions, like cryptocurrencies, but it presents a lot of opportunities for a wide variety of industries—from home entertainment to real estate to contract drafting —and beyond. This short article offers a brief introduction to blockchain, provides insight about its current uses, and summarizes some future applications.
Read MoreIn Laborers’ Local #231 Pension Fund v. Cowan, No. 17-478, 2018 BL 85103 (D. Del. Mar. 13, 2018), the court granted Rory Cowan and his co-executives’ (“Defendants”) motion to dismiss Laborers’ Local #231 Pension Fund’s (“Plaintiffs”) amended complaint. The court held Plaintiffs failed to state a claim in violation of the Securities Exchange Act of 1934 (the “Exchange Act”) because they failed to allege “a misleading or false statement or omission” in the proxy statement.
Read MoreIn Webb v. SolarCity Corp., No. 5:14–CV–01435–BLF, 2018 BL 79348 (9th Cir. Mar. 08, 2018), the Ninth Circuit Court of Appeals affirmed the district court’s dismissal of a securities fraud action brought in a third amended complaint (“TAC”) by James Webb (“Plaintiff”), a member of a class of plaintiffs who purchased shares in SolarCity, against SolarCity Corporation and two of its cofounders, Lyndon Rive and Robert Kelly (collectively “Defendants”). The court held Plaintiff failed to adequately plead the scienter element necessary to state a claim under § 10(b) of the Securities Exchange Act of 1943 (“Act”).
Read MoreIn Pfizer Inc. 2018 BL 030118 (March 1, 2018), Pfizer Inc. ("Pfizer") asked the staff of the Securities and Exchange Commission (“SEC”) to permit the omission of a shareholder proposal submitted by Trinity Health (“Proponents”) requesting Pfizer disclose the risks from rising pressure to contain U.S. prescription drug prices and explain how Pfizer plans to mitigate those risks. The SEC issued the requested no action letter allowing for the exclusion of the proposal under Rule 14a-8(i)(10).
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