Almost every year since 1975, it has become customary for the President to issue a message recognizing the important contribution made to our nation’s life and culture by its African American citizens. This year, the President issued a Proclamation designating February as National African American History Month 2012. The Law Library of Congress has compiled guides to commemorative observations, including a comprehensive inventory of the Public Laws, Presidential Proclamations and congressional resolutions related to African American History Month.

Every year, the theme changes and this year, it is “Black Women in America: Culture and History” to honor African American women and the roles they played in the shaping of our nation. The theme, chosen by the Association for the Study of African American Life and History (ASALH), urges all Americans to study and reflect on the value of their contribution to the nation. This theme combines February’s celebration of Black History Month with March’s celebration of Women’s History Month. The theme is announced annually by ASALH in Washington DC, which also offers “theme kits” for every African American History year. A list of past and future themes for Black History Month is available at this page of the ALALH website.

The Brooklyn Law School Library has in its collection a book by Monica Parker, an African American lawyer, Harvard graduate and renowned career coach titled What It Takes: How Women of Color Can Thrive Within the Practice of Law (Call #KF299.A35 P37 2010). The book is in three parts with 11 chapters: Part One: How Did We Get Here? Chapter 1 Our Glorious History, Chapter 2 Our Not-So-Glorious Present: The Intersection of Race and Gender, Part Two: The Potential Minefields and Time-Tested Strategies for Getting Around Them, Chapter 3 It’s All About the Work, Chapter 4 Relationships at Work, Chapter 5 Relationships with Clients, Chapter 6 I Can’t Be Being Discriminated Against, Can I? Chapter 7 Assimilate or Not? Part Three: Should I Stay or Should I Go? Chapter 8 The Imposter Complex, Chapter 9 Is It Our Responsibility to Uphold the Race? Chapter 10 On Becoming a Golden Child Chapter 11 Counting the Hours, Minutes, and Seconds.

An article in the Feb. 14th edition of the Wall Street Journal, Stop-and-Frisks Hit Record in 2011 (full text available in print at the Brooklyn Law School reference desk and online in Lexis and the BLS online subscription to the WSJ), reports that the use of the stop and frisk tactic in New York City effected 684,330 people in 2011, a 14% increase over 2010. Of the total, about 12% were arrested or received summonses; males made up 92% of the stops, 87% of the total were either black or Hispanic and whites were 9%. An analysis by the New York Civil Liberties Union estimates that the use of stop and frisk has increased 603% since the first year of the Bloomberg administration, when there were only 97,296 stops. It says that under the Bloomberg administration, the NYPD has conducted more than 4.3 million street stops with about 88% of those stops – nearly 3.8 million – resulting in no arrest or summons.

In defense of the practice, a spokesperson from the NYPD said that 8,263 weapons, including 819 guns, were recovered as a result of stops and that tactic has reduced crime. NYCLU Executive Director Donna Lieberman counters that “crime rates were going down before the skyrocketing stop-and-frisk campaign.” Critics say that stop and frisk targets minority men in NYC where blacks make up 25% of the city’s population, Hispanics 29% and whites 33%, according to the 2010 census. In response, the NYPD spokesperson said that the stop numbers “comport by race with victim-crime reports.” In 2011, 66% of violent-crime suspects were black, 34% were Hispanics and 9% white. The NYC website maintains a Stop, Question and Frisk Report Database for the years 2003 through 2010.

Students at Brooklyn Law School can review the law related to stop and frisk on the CALI website where there are two relevant lessons: Stop and Frisk (CRMPRO12) and Stop and Frisk Exception (CRMPRO06). SARA, the BLS Library catalog, lists an internet resource Analysis of Racial Disparities in the New York Police Department’s Stop, Question, and Frisk Practices by Greg Ridgeway published by RAND Safety and Justice and sponsored by the New York City Police Foundation.

Last month, the Second Circuit Court of Appeals in Capital Management Select Fund Ltd. v. Bennett ruled that plaintiff investors failed to allege deceptive conduct by the principals because the investors knew what they were getting into when they signed a standard agreement allowing Refco Capital Markets to “re-hypothecate” or otherwise use securities and other property held in customer brokerage accounts to secure margin trading. Re-hypothecation, which was at the heart of the MF Global collapse (see MF Global and the Great Wall St Re-Hypothecation Scandal), is the pledging to banks by securities brokers of the amount in customers’ margin account as collateral for broker loans, which are used to cover margin loans to customers for margin purchases and selling short. Re-hypothecation occurs when a broker, to whom his customers have hypothecated — or pledged — securities as collateral for a margin loan, pledges those same securities to a bank or other lender to secure a loan to cover the firm’s exposure to potential margin account losses. This video explains the process simply.

Judge Ralph Winter in the 2nd Circuit case decision upheld the dismissal of the consolidated lawsuits for lack of standing, as well as failure to show how Refco officers had deceived them, saying “We hold that appellants have no remedy under the securities laws because, even assuming they have standing, they fail to make sufficient allegations that their agreements with RCM misled them or that RCM did not intend to comply with those agreements at the time of contracting.” He went on to say “On review of the customer agreement, we conclude that it unambiguously warned the RCM Customers that RCM intended to exercise full rehypothecation rights as to the customers’ excess margin securities.” The judge also found that because Refco had stated that it was not a US regulated entity, rehypothecation rights in the agreement were not subject to either SEC rules or New York state law. “In short, RCM’s alleged violation of federal law does not in and of itself constitute deceptive conduct,” Judge Winter found, adding that the customers’ monthly account statements were not deceptive “about what securities may or may not be rehypothecated.” For more, see the article in the NY Law Journal.

A 2010 IMF working paper, The Sizable Role of Rehypothecation in the Shadow Banking System, provides estimates from the hedge fund industry for the “churning” factor or re-use of collateral and examines the policy implications of the practice. The paper states that “In the aftermath of Lehman, larger hedge funds are increasingly seeking to ensure that assets that have not been pledged as collateral are kept in segregated client accounts, so that prime brokers have absolutely no claim over those assets.” See chart below.

A Financial Times article, Lehman Collapse Puts Prime Broker Model In Question (available to member of Brooklyn Law School via the BLS Library ProQuest subscription) suggest blocking rehypothecation altogether. “Even if there is no dramatic change to the business model, prime brokers face a less profitable future and hedge funds will have to pay more for less generous leverage. If investors get their way, that cost will be even higher – but at least there will be less chance of funds being destroyed by a catastrophic bank collapse.”

 I don’t Tweet and I’m not on Facebook, although I probably should re-join LinkedIn and I can’t image that anyone is actually interested in the minutiae of my daily life.  I, on the other hand, am very much interested in hearing what you have to say about the Library.

If you have a question, comment or suggestion about Library resources, please let me know via an e-mail letter.  Your query can be about print or electronic resources, services or facilities.  For example, if there are research topics that you would like to see covered in our Fall or Spring Lunch & Learn Sessions (you come to learn; we provide lunch), let me know.

Please e-mail me at:  linda.holmes@brooklaw.edu and I will reply back to you within 48 hours (except weekends).  If I think your query/comment/suggestion would be of general interest to the entire student body, I will use a forthcoming blog to post your e-mail and my response.

I look forward to hearing from you, so send those Letters to Linda.  (Linda Holmes, Associate Law Librarian)

The current edition of Barron’s, the Down Jones Business and Financial Weekly newspaper that covers US financial information, has an excellent interview with Brooklyn Law School Professor Roberta Karmel for anyone interested in understanding the 2008 financial meltdown and how to avoid a repeat of that near economic collapse. The interview, in How to Break Up the Banks, is available through the BLS Library print subscription to Barron’s and its online counterpart which members of the BLS community can access by speaking to a reference librarian. Prof. Karmel, a former Securities and Exchange Commissioner, sees the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, designed to shore up the financial system against the next big financial shock wave, as window dressing that will not withstand another major credit bubble or financial collapse. Instead she suggests that a strong New Deal prescription be applied to take the banks apart by resurrecting the techniques used in the Public Utility Holding Company Act of 1935, what she calls “the most ambitious legislation of the Depression-inspired federal attack on concentrated economic power.”

Viewing Dodd-Frank as weak tea diluted by politicians who engaged in the deregulatory policies of the last three decades and lacking the political will to change, Prof. Karmel says that the legislation neither curtailed the leverage inherent in derivatives trading nor reduced the size or complexity of the existing mega-banks. Noting the historic American aversion to the concentration of banking power, she says that “we have to eliminate the problem that comes along with too-big-to-fail: that of socializing losses and privatizing profits. Such a system is antithetical to any notion of the capitalist ideal.” She notes that between 1980 and 1995, the number of banks dropped from 14,000 down to 10,000. This chart (click to enlarge) shows how 37 banks were consolidated into just four mega banks in the last two decades.

Prof. Karmel sees parallels in the current too-big-to-fail banking system and the 1930s where a specialized antitrust program was brought against the public-utility holding companies, seen as the culprits in the 1929 crash. PUHCA, passed in 1935, but not fully implemented until the 1950s due to intense industry opposition, was finally accepted by the judiciary and the industry so that the SEC succeeded in restructuring the public utilities. She imagines a statute analogous to PUHCA that could prove an effective antidote to the functional regulation that sowed the seeds for the financial crisis of 2008.

For more on this topic, see the BLS Library copy of Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves by Andrew Ross Sorkin (Call # HB3722 .S659 2009), a moment-by-moment account of the 2008 financial collapse that documents state efforts to prevent an economic disaster, offering insight into the pivotal consequences of decisions made throughout the past decade.

On Tuesday, Jan. 31, Brooklyn Law School Intellectual Property Professors Derek Bambauer, Jonathan Askin, Jason Mazzone, Samuel Murumba, Jane Yakowitz, and Irina Manta held a Town Meeting on SOPA with a standing room only crowd in the Student Lounge. Leading off the meeting, Prof. Bambauer presented an overview of the differences and similarities in the Protect IP Act (PIPA) and the Stop Online Privacy Act (SOPA) which are both still pending in Congress. Next Prof. Yakowitz spoke about the privacy issues inherent in the bills especially concern that the government may use seized domain names to collect IP addresses from end users who go to those seized domains.

Next, Prof. Askin discussed the success of the internet community in opposing SOPA and PIPA bills which major companies in the TV, music and movie industry largely authored and for which they lobbied. Calling the online protest to SOPA and PIPA the first significant victory for the internet community, Prof. Askin also discussed the OPEN Act (S. 2029) which Sen. Ron Wyden (D-OR) introduced in the U.S. Senate. Rep. Darrell Issa (R-CA) introduced in the House a companion bill, H.R. 3782, the Online Protection and Enforcement of Digital Trade Act on the same day as the internet protest when high-profile websites like Wikipedia went dark. He noted that the KeepTheWebOpen site is soliciting input from the public to comment on the OPEN Act to make suggestions for its revision. Seeing this as an opportunity for lawyers and law students to provide input into the legislation, Prof. Askin will be leading a Hack-the-Act initiative to offer law students experience with legislative drafting. In a future podcast, Prof. Askin will discuss the series of events in the Hack-the-Act program scheduled later this month.

The other speakers at the Town Meeting were Prof. Mazzone who commented on the need for strong protections for owners of IP content but acknowledged concerns that copyright law is being privatized and that its meaning and application are determined not by governmental actors but by private parties, particularly deep-pocketed copyright owners. Increasingly, the balance between private rights and public interests is set by private lawmaking. Prof. Murumba noted that SOPA and PIPA are part of a broader application of protections for copyright owners making reference to the Anti-Counterfeiting Trade Agreement (ACTA), a multilateral treaty with the purpose of establishing international standards for intellectual property rights enforcement.

Finally, Prof. Manta commented on the dire warnings of the entertainment industry about the impact of online piracy at a time when the market is booming, with ever greater content choices for consumers, more options for creators, and many more opportunities for smart businesses and artists to make money. She noted a recent report entitled The Sky is Rising which shows that the entertainment industry is thriving and that anti-piracy laws are more about profit-maximization rather than survival.

Topical areas where courts have made conflicting decisions on legal issues can be fruitful writing topics. Below are some resources useful in researching recent Circuit splits.

BNA U.S. Law Week is a weekly publication that reports summaries of new decisions from state, federal, and administrative courts, and reports on new legislative and regulatory developments. Circuit splits are featured by topic, case name, and summary of the disputed issue. This publication can be accessed from the Library’s Quick Links menu while at the law school or while connected through the proxy server from an off-campus location.

From the front page of BNA U.S. Law Week, select the “Advanced Search” option below the search box.

• To find circuit splits, try searching  circuit* /s split* /s report* and restrict by date to see recent splits.
• To find recent cases dealing with Fourth Amendment issues, try searching the HEADINGS field for “fourth amendment” and restrict by date to the last year.

There are also two great blogs devoted to reporting on splits among federal circuit courts:

• Split Circuits, written by law professor A. Benjamin Spencer
• Circuit Splits, written by two Texas attorneys, a law professor, and a law review editor

For additional tips on developing and researching a seminar paper topic, check out the Research Guide by librarian Kathleen Darvil, or speak to any of the Reference Librarians.

A Wells Notice is a notification from the SEC or another regulator like FINRA or NASD sent to a respondent when the regulator intends to recommend that enforcement proceedings be commenced against it. The Wells Notice provides the respondent with the opportunity to present a case against the commencement of these proceedings. Providing a Wells Notice is not legally required but it usually the practice for regulators to do so. See Section 2.4 of the SEC Enforcement Manual for more on the Wells Process.

The use of Wells Notices dates to 1972, when SEC Chairman William J. Casey appointed a committee chaired by John Wells, commonly known as the Wells Committee, to examine and evaluate the SEC’s enforcement policies. Among the recommendations made by the Wells Committee in its Report of the Advisory Committee on Enforcement Policies and Practices was the following:

Except where the nature of the case precludes, a prospective defendant or respondent should be notified of the substance of the staff’s charges and probable recommendations in advance of the submission of the staff memorandum to the Commission recommending the commencement of an enforcement action and be accorded an opportunity to submit a written statement to the staff to be forwarded to the Commission together with the staff memorandum.

Recent newsworthy instances of the use of Wells Notices include Standard & Poors, the largest U.S. credit-rating firm, which acknowledged last September that it had received a Wells Notice from the SEC warning the firm it could face civil enforcement action for its ratings actions in a 2007 collateralized-debt obligation, a pool of subprime mortgages and other assets sold in slices to investors. S&P said it was cooperating with the SEC on the probe and that the Wells notice was “neither a formal allegation nor a finding of wrongdoing.” More recently, Puda Coal, a Chinese company facing regulatory scrutiny over its financial reporting, received a Wells Notice from the SEC that it intends to recommend administrative proceedings to suspend or revoke the registration of its securities for failure to comply with certain rules under the Securities Exchange Act of 1934. The SEC offered Puda an opportunity to make a Wells Submission no later than January 16, 2012 setting forth any reasons of law, policy or fact why it believes the administrative proceedings should not be brought.