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  • Tad A. Devlin was quoted in an Investor’s Business Daily article by Richard Acello on February 2, 2016.

    Uber, the popular ride-sharing service for the new sharing economy, continues to drive into legal problems with the old economy. Uber is being sued by drivers who have formed a class action so that they can be regarded as employees, in Douglas O’Connor et al v. Uber Technologies Inc., filed in U.S. District Court for Northern California. The suit has a long way to go, but it could involve as many as 160,000 drivers.

    It is a tough call at this point, which way a jury trial would go,” said Tad Devlin, a partner at Kaufman Dolowich & Voluck in San Francisco who specializes in the sharing economy. But he says a pretrial settlement is likely.

    An Uber settlement or trial would almost certainly have to decide the question of whether Uber drivers are “employees, quasi employees, independents or simply Ubers, which is what I call a new modern sharing economy hybrid employee,” Devlin said.

    In a landscape where the arrangements for business/worker relationships are fluid, Devlin says one answer might come in the form of a regulatory scheme that would address this new type of independent employee.

  • Feb 9, 2016

    Join Kaufman Dolowich & Voluck (KDV) attendees at the Advisen 2016 Cyber Risk Insights Conference.

    Overview: Advisen again brings its acclaimed Cyber Risk Insights Conference series to Europe with a full-day event in London addressing the critical privacy, network security and cyber insurance issues confronting risk professionals and their organizations. An expert faculty comprised of leaders in network security, regulation, law enforcement, risk management and cyber risk insurance will offer their insights on managing risk on a rapidly evolving and increasingly dangerous threat landscape. This day of learning and networking for risk managers, CISOs, CROs, insurance brokers, underwriters, reinsurers and other risk professionals will present a global perspective on cyber threats, but also will examine how the European business and regulatory environment influence cyber risk management decisions.

    For more information and to register, click here.

  • Jan 21, 2016

    Tad A. Devlin was quoted in a Law360 article on January 20, 2016. He comments on The U.S. Supreme Court ruling made on Wednesday, January 20, in Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan that states a retirement plan cannot sue under the Employee Retirement Income Security Act for reimbursement of medical expenses from a third-party settlement that a plan participant has already spent.

    “Based on the USSC ruling, under ERISA, strict tracing — i.e., identifying a fund within the possession and control of the member/participant — is required. ERISA plans should implement more aggressive methods of payment detection and/or seek alternative means of issuing conditional payments through coordination of benefits procedures and protocols. Without the strict tracing requirement for ERISA reimbursement claims, the scope of potential liability would have potentially extended beyond plan members/participants to include any party who possessed the funds subject to an equitable lien, including attorneys representing plan members. Under the Montanile decision, proof and tracing issues will likely become more frequent and could result in incentivizing quick spending of plan money to avoid tracing and reimbursement claims.”

  • Jan 12, 2016

    By Brendan P. McGarry and Stefan R. Dandelles

    On Monday, January 11, 2016, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities Exchange Commission (“SEC”) released its Examination Priorities for 2016 (“Priorities”). Generally, OCIE will continue to focus on certain practices and products that it perceives to present potentially heightened risks to investors and/or the integrity of the U.S. capital markets. Much like 2015, OCIE’s 2016 priorities are organized around three thematic areas:

    1. Examining matters of importance to retail investors, including investors saving for retirement;
    2. Assessing issues related to market-wide risks; and
    3. Using OCIE’s evolving ability to analyze data to identify and examine registrants that may be engaged in illegal activity.

    With respect to protecting retail investors and investors saving for retirement, OCIE is planning and/or conducting various examination initiatives to assess risks to retail investors that could arise from the enumerated areas, including:

    • ReTIRE: Continuing an initiative launched in June 2015, OCIE will examine SEC-registered investment advisers and broker-dealers and the services they offer to investors with retirement accounts, which will include examining the reasonable basis for recommendations made to investors, conflicts of interest, supervision and compliance controls, and marketing and disclosure practices.
    • Exchange Traded Funds (“ETFs”): OCIE will be examining ETFs for compliance with applicable exemptive relief under the Securities Exchange Act of 1934 and the Investment Company Act of 1940, as well as other regulatory requirements, and review the ETFs’ unit creation and redemption process. OCIE will also focus on sales strategies, trading practices, and disclosures, particularly in niche or leveraged/inverse ETFs.
    • Variable Annuities: OCIE will assess the suitability of sales of variable annuities to investors, as well as the adequacy of disclosure and the supervision of such sales.

    With respect to using data analytics to identify signals of potential illegal activity, OCIE has highlighted several of its initiatives in which it will leverage its capabilities in the area of data analytics, including:

    • Recidivist Representatives and their Employers: OCIE will continue to use its analytic capabilities to identify individuals with track records of misconduct and examine the firms that employ them.
    • Anti-Money Laundering (“AML”): OCIE will continue to examine clearing and introducing broker-dealers’ AML programs, focusing on firms it feels have not filed an adequate number of suspicious activity reports (“SARs”), or have filed incomplete or late SARs. OCIE will also continue to assess the degree to which broker-dealers’ AML programs are robust and targeted to the firms’ business models, and the extent to which the firms are able to adapt their AML programs to current risks.
    • Product Promotion: OCIE will continue to focus on detecting the promotion of new, complex and high risk products and related sales tactics with respect to suitability and potential breaches of fiduciary duties.

    OCIE also identified other areas of focus, including:

    • Private Placements: OCIE will review private placements, including those made under Regulation D of the Securities Exchange Act of 1933 or the Immigrant Investor Program (“EB-5 Program”) to evaluate whether legal requirements are being met within such areas as due diligence, disclosure and suitability.
    • Private Fund Advisers: OCIE will be examining private fund advisers, maintaining a focus on fees and expenses, and evaluating the controls and disclosure associated with side-by-side management of performance-based and purely asset-based fee accounts.

    OCIE’s priorities for 2016 are largely a continuation of their initiatives for 2015, which emphasizes the importance of areas of focus such as advice to older investors and retirees, AML compliance, and the increased scrutiny of private funds. OCIE’s list of priorities is sure to keep the compliance departments of SEC-registered firms busy throughout 2016. The attorneys of Kaufman Dolowich & Voluck are prepared to help firms navigate this tumultuous regulatory environment.

    KDV Financial Services Team Contacts:

    Gregg Breitbart
    Managing Partner – Florida
    (561) 910-5651
    gbreitbart@kdvlaw.com

    Stefan R. Dandelles
    Managing Partner – Chicago
    (312) 646-6742
    sdandelles@kdvlaw.com

    Louie H. Castoria
    Partner – San Francisco
    (415) 926-7638
    lcastoria@kdvlaw.com

    Brendan P. McGarry
    Attorney – Chicago
    (312) 646-6745

  • Jan 6, 2016

    By Brendan P. McGarry and Stefan R. Dandelles

    On January 5, 2016, the Financial Industry Regulatory Authority (“FINRA”) released its 2016 Regulatory and Examination Priorities Letter (the “Letter”), in which FINRA outlined its areas of focus for the coming year. For 2016, FINRA has outlined three “broad issues” on which it will focus:

    (1) Culture, Conflict of Interest and Ethics;
    (2) Supervision, Risk Management and Controls; and
    (3) Liquidity.

    FINRA’s most important area of focus for 2016 will be firm culture, especially as it relates to compliance and ethics. In the Letter, FINRA announced that it will focus on the frameworks that firms use to develop, communicate and evaluate conformance with their culture. In doing so, FINRA will assess five indicators of a firm’s culture:

    (1) Whether control functions are valued within the organization;
    (2) Whether policy or control breaches are tolerated;
    (3) Whether the organization proactively seeks to identify risk and compliance events;
    (4) Whether supervisors are effective role models of firm culture; and,
    (5) Whether sub-cultures (e.g., at a branch office, trading desk, or an investment banking department) that may not conform to overall corporate culture are identified and addressed.

    In making this issue its primary focus, FINRA appears to be telling member firms that compliance should be a key function of firms’ operations, and that firms are expected to encourage active compliance departments, rather than merely tolerate them.

    Within the broad issues, FINRA referenced several more narrowly focused topics, including:

    • Management of Conflicts of Interest;
    • Technology, including Cybersecurity;
    • Anti-Money Laundering (“AML”) Controls; and
    • Firm Funding.

    A couple of the more narrowly focused topics are not new for 2016 but remain on FINRA’s hot-button issues list: AML and Cybersecurity. FINRA focused on AML compliance in 2015 and will continue to do so in 2016. FINRA will be assessing the adequacy of firms’ monitoring for suspicious activity, including surveillance of both money movements and trading activity, and expects firms to continually test their systems to ensure all types of accounts and activity are properly identified and reviewed, and to document any reasons for not doing so pursuant to any risk-based decision.

    With respect to Cybersecurity, FINRA intends to review a firm’s approach to Cybersecurity risk management, examining one or more of the following topics: governance, risk assessment, technical controls, incident response, vendor management, data loss prevention, and staff training. In addition, FINRA will continue to examine firms’ ability to protect confidential client information, including compliance with SEC Regulation S-P and Securities Exchange Act Rule 17a-4(f).

    As to be expected, FINRA also pointed out other areas of focus for 2016, including:

    Sales Practices, specifically referencing suitability and concentration, as well as seniors and vulnerable investors; and
    Private Placements, the JOBS Act and Public Offerings.

    FINRA’s priorities for 2016 are extensive and are sure to present a challenging regulatory environment for member firms.

    The attorneys of Kaufman Dolowich & Voluck are poised to assist with these and other issues facing your member firm.

    KDV Financial Services Team Contacts:

    Gregg Breitbart
    Managing Partner – Florida
    (561) 910-5651
    gbreitbart@kdvlaw.com

    Stefan R. Dandelles
    Managing Partner – Chicago
    (312) 646-6742
    sdandelles@kdvlaw.com

    Louie H. Castoria
    Partner – San Francisco
    (415) 926-7638
    lcastoria@kdvlaw.com

    Brendan P. McGarry
    Attorney – Chicago
    (312) 646-6745
    bmcgarry@kdvlaw.com

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Dean Herman and Hee Young Lee Join Kaufman Dolowich & Voluck as Partners in Firm’s Los Angeles Office; Senior Counsel and Three Associates Also Join LA Office

(June 3, 2013, Los Angeles, CA) — Kaufman Dolowich & Voluck, LLP (KDV), a leading national law firm, today announced that Dean B. Herman, who has more than 30 years of experience in insurance industry and business litigation, and Hee Young Lee, who has represented insurers and policyholders for more than a decade, have joined the firm as partners in its Los Angeles office. They will be accompanied by Craig D. Aronson as senior counsel and Steven S. Son, Andrew C. Johnson and Mikhaile P. Savary as associates.

Dean Herman defends and advises insurers and professionals on liability, first and third party insurance coverage issues, bad faith, and errors and omissions issues. His experience also includes sophisticated business and commercial litigation in state and federal trial and appellate courts on issues across a broad range of industry sectors and a diversified array of issues, ranging from IP to employment and contract disputes, executive risk exposures,  entertainment, wine industry,  as well as professional liability claims involving lawyers, insurance agents and brokers, real estate agents and brokers, directors and officers, business managers, financial advisors among others. He has also served as an expert witness and consultant and acts as a mediator in complex insurance coverage and other disputes. He comes to Kaufman Dolowich & Voluck from Mendes & Mount where he was a partner in the firm’s Los Angeles office.

Hee Young Lee also joins from Mendes & Mount, where she was a partner and her practice is focused on advising and defending insurers and their insureds in federal and state courts in matters involving intellectual property, environmental, construction defect, agribusiness, privacy, and personal lines claims. She also defends insureds in professional liability claims.

“Dean and Hee Young are preeminent insurance attorneys who will enhance not only our West Coast but our national presence in this field, which has always been a core strength of the firm,” said Ivan J. Dolowich, co-managing partner of KDV.  “This group enhances our practice on the West Coast providing insurance coverage, business litigation, professional liability, labor & employment and financial services for our clients.”

Herman will also be working out of the KDV San Francisco office due to the considerable work he does in the Bay area for clients based there.  He earned his B.A.  from California State University at Fullerton, his J.D. from Loyola Law School and his Master of Laws from the University of California, Berkeley. He is admitted to practice in California, and regularly handles matters in many other states either on a pro hac vice basis or an advisory or national coordinating counsel basis.

Lee will have a leadership role in the Los Angeles office. She earned her B.A. from the University of California, Los Angeles and her J.D. from the University of California Hastings College of the Law. She is admitted to practice in California, and also handles insurance coverage matters in many other states.

“Hee Young and I are excited to be joining a firm whose key practice areas are so compatible with our strengths,” said Herman. “We look forward to the opportunity to helping to grow KDV’s already strong insurance, professional liability and litigation practices on the West Coast and nationally.”

Craig Aronson, who has been practicing law for 30 years and whose practice focuses on coverage and professional liability, joins KDV from Gaglione, Dolan & Kaplan (Los Angeles) where he was a partner. He is admitted to practice in California. Aronson graduated summa cum laude and Phi Beta Kappa from Dartmouth College and earned his law degree from the University of Chicago Law School.

Steven Son, Andrew Johnson and Mikhaile Savary are litigation attorneys joining KDV from Mendes & Mount where they were all associates. Son, admitted to practice in California, earned his B.A. from the University of California, Los Angeles and his J.D. from the University of Illinois College of Law.  Johnson, admitted to practice in California and Nevada, received his B.F.A. from the University of Kansas and his J.D. from St. John’s University School of Law. Savary, admitted to practice in California and New York, received his B. A. from Cornell University and his J.D. from Columbia Law School.

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