On this day in legal history, November 28th marks a pivotal moment in the advancement of women's rights in politics with the entry of Lady Astor into the British Parliament. In 1919, Lady Nancy Astor became the first woman to take her seat as a Member of Parliament (MP), breaking centuries of male-only representation in the UK's House of Commons. Her election was a landmark achievement not only for women in the United Kingdom but also for women's political participation worldwide.
Astor's journey to Parliament was set in motion by a combination of societal changes and personal ambition. Born in Virginia, she moved to England after her first marriage and later married Waldorf Astor, a British newspaper proprietor and politician. When her husband ascended to the House of Lords upon inheriting his father's title, his Commons seat became vacant, and Nancy Astor decided to run for it.
Her campaign faced numerous challenges, including skepticism and opposition rooted in traditional gender roles. Despite these hurdles, Astor's charisma, commitment, and the support of the women's suffrage movement propelled her to victory. Her election was a culmination of the long struggle for women's suffrage in the UK, coming just a year after women over the age of 30 were granted the right to vote.
Lady Astor was known for her wit, her advocacy for women and children's rights, and her outspoken stance on a range of issues. Her tenure in Parliament, which lasted until 1945, paved the way for future generations of women in politics, setting a precedent that challenged the norms of political representation and gender roles in governance. Lady Astor’s legacy continues to inspire and remind us of the importance of diversity and representation in democratic institutions.
Changpeng Zhao, the former CEO of Binance and a citizen of both Canada and the United Arab Emirates, is currently required to remain in the United States. This follows his guilty plea to violating U.S. anti-money laundering laws. U.S. District Judge Richard Jones in Seattle is reviewing whether Zhao should stay in the U.S. until his February sentencing. Zhao stepped down from his role at Binance, which also pleaded guilty and agreed to pay over $4.3 billion for breaking U.S. laws. Despite arguments that Zhao isn't a flight risk, the government expressed concerns about securing his return for sentencing, given the lack of an extradition treaty with the UAE. Zhao, facing a maximum of 18 months in prison, has agreed not to appeal any sentence of that length.
Former Binance CEO Changpeng Zhao must stay in US for time being, judge says | Reuters
A National Labor Relations Board judge ruled that Starbucks Corp. unlawfully terminated two workers at a Portland, Oregon store due to their union activities, among other unfair labor practices. The violations also involved discriminatory enforcement of dress code against union supporters and blocking union-related information on a store bulletin board. This decision is part of a series of cases where Starbucks has been found to breach federal labor laws, with numerous complaints still pending.
The Portland store unionized in July 2022, prompting the ruling, which included sanctions against Starbucks for withholding requested information including company manuals and information the so-called “barista approach.” While the judge refrained from imposing all requested penalties due to judicial precedents, adverse inferences were made against Starbucks for failing to produce relevant information.
Starbucks intends to appeal the decision, maintaining that their actions adhered to lawful policies regarding store appearance and safety, rather than being a response to union involvement. The judge's decision highlighted the significance of withheld documents and testimony in drawing adverse conclusions against Starbucks.
Starbucks Illegally Fired Union Supporters, NLRB Judge Rules (1)
The U.S. Securities and Exchange Commission (SEC) implemented a new rule on Monday, in line with the Dodd Frank law, designed to prevent traders in asset-backed securities from engaging in activities that mimic behavior seen during the 2008 financial crisis. This rule prevents "securitization participants" like underwriters, placement agents, and sponsors from engaging in transactions that involve betting against the same securities they sell to investors. Exceptions are made for activities like risk hedging.
SEC Chair Gary Gensler highlighted that this rule specifically addresses a sector that played a significant role in the 2008 financial crisis. The rule has undergone modifications to include exceptions for affiliates not acting jointly with traders and for investors holding "long" positions, as opposed to those betting on securities' decline.
Although four of the SEC's five members approved the rule, Republican Commissioner Hester Peirce, who had previously supported the proposal with reservations, voted against it. The implementation of this rule comes after instances, such as Goldman Sachs' 2010 settlement, where the bank faced allegations of misleading investors about mortgage-backed securities.
The SEC plans to enforce compliance with this rule for asset-backed securities with closing dates occurring 18 months after its publication in the Federal Register.
Wall St regulator adopts Dodd Frank rule against trader conflicts | Reuters
It’s “Column Tuesday”, where we get to see what my co-host Andrew Leahey is working on at Bloomberg Law. This week, Leahey writes about the concerning prevalence of electronic sales suppression (ESS) – a form of tax fraud via software manipulation of transaction values.
By way of very brief background, when a business makes a sale, they collect sales tax from the customer, which is meant to be remitted to the government. However, the business can alter or delete the transaction records, essentially erasing or reducing the reported sales. Think of your local restaurant that deletes large cash transactions from its records and pockets the sales tax collected on those transactions. Without the record of such sale, the government does not know that such sales tax was collected on behalf of the government by the business and the business is able to pocket that money. This manipulation allows them to underreport their earnings and evade paying the accurate amount of sales tax owed to the government. This fraudulent practice enables businesses to retain the tax funds that should rightfully go to the government, resulting in substantial revenue loss for tax authorities.
A five-year probe in 2021 found electronic sales suppression, or ESS, devices in one-fifth of California restaurants. As early as 2003, Germany reported yearly tax revenue losses from ESS in the billions of euros, and there’s no indication ESS has diminished since then.
The UK’s response to this issue, as outlined in guidance FS68, involves a harsh crackdown, urging ESS users to confess or face severe penalties. However, the defined scope of what constitutes an ESS system under this guidance is overly broad. It encompasses common business tools like Excel or Google Sheets, creating a risk of penalization for possessing such software.
HMRC’s approach raises global concerns, especially within the Joint Chiefs of Global Tax Enforcement (J5), a collaboration of five countries. Their coordination means actions taken by one member have repercussions for others, potentially impacting tax enforcement internationally.
The UK's strategy significantly shifts the landscape of tax compliance, creating a gray area for legitimate software users and possibly shifting the burden of proof onto businesses to demonstrate innocence, rather than authorities proving guilt. This overreach poses risks of unwarranted audits, particularly burdening small and medium-sized enterprises that lack resources for compliance.
Moreover, this crackdown might discourage the adoption of new technologies, as even AI-driven accounting systems could fall under suspicion. The fear is that HMRC's stringent policies could hinder technological innovation essential for business operations.
Looking beyond the UK, Canada and Australia have implemented different approaches to combat ESS, utilizing technology and partnerships with businesses. However, the concern remains that the UK's expansive enforcement approach might influence global tax enforcement practices.
Ultimately, while the intent of HMRC’s crackdown on ESS is to protect revenue and competition, its execution risks unintentionally ensnaring compliant businesses, stifling innovation, and creating a climate of uncertainty.
UK Electronic Sales Suppression Crackdown Shows What Not to Do
