Tuesday, September 23, 2014

Professor William Byrnes Develops Online Teaching Methodologies And Distance Learning In Face Of Disabilities

William Byrnes pioneered the “online classroom” so he could continue teaching, despite a prognosis of lifetime disabilities resulting from traumatic injury. The program he developed to guarantee his future employment has now become a groundbreaking distance learning model used by higher education institutions and the U.S. military.
Byrnes suffered life threatening injuries in an African ski country accident and spent six months in the hospital undergoing grueling recovery from physical and brain trauma. Doctors could not predict his level of recovery, nor his future quality of life. In an effort to prepare himself for a productive future, Byrnes developed online, multi-media teaching methodologies that effectively ignore disability.
Byrnes says his motivation was to create a way to communicate with students whether or not he could walk or use body language, as was his practice in the traditional classroom. What he ended up with was a new way of teaching and learning.
“Presenting curriculum using universal design was the answer,” said Byrnes. “I used the basic tenets of audio, visual, and tactile sensibilities so I could teach at every different level. I realized that this approach would also allow me to meet the learning styles of every student.”
It has been more than 20 years since Byrnes developed his first online program. He is fully recovered but has never forgotten the lessons he learned when faced with the possibility of lifelong disability. Today, Byrnes’ first online curriculum is an extensive program using audio, video, text, e-mail, and sometimes that first simple universal design of pictures and colors to teach. He revises and upgrades the modalities every five years to incorporate new technology.
Students with a wide range of disabilities including birth defects, visual and hearing impairments, and memory issues caused by head injury are now able to pursue higher education using the online classroom. Byrnes interfaces regularly with disabled groups and associations to learn the newest assistive technologies and incorporate them into his teaching modalities. The feedback he receives from students indicates that the multi-media approach to teaching does indeed accommodate disabilities and removes obstacles that previously prevented them from obtaining advanced degrees.
The military is taking advantage of distance learning because it allows deployed, active duty soldiers to pursue higher learning. Byrnes relates the story of a soldier in Iraq who was wounded and spent two years in rehab, but was able to continue his studies and complete his advanced degree because he did not need to attend class in a traditional classroom. The military is also finding that the electronic curriculum is ideal for training deployed military intelligence officers the advanced skills of forensic criminology, financial crimes, money laundering and legal analysis.
Byrnes underscores the need for colleges and universities to employ multi-media technology, saying “Students who don’t suffer with disabilities also learn in different ways, some are visual learners, some are auditory learners. If we don’t teach using different modalities we are leaving students behind and that is wrong. I believe that education is part of human development and we need to deliver it to all of humankind.”
On September 18 - 20, 2014, Byrnes lead a workshop that is drafting best practices recommendations for online legal education. For more than four years, he has worked diligently to achieve this outcome through a concerted effort of many ABA institutions. The Working Group for Distance Learning in Legal Education, is a loosely structured alliance of law educators collaborating to provide increased opportunities for faculty, students, and other participants to access high quality, innovative, and interactive online legal education.

Monday, September 22, 2014

Wolf of Wall Street Back With a Pack, Seeking Vengeance

International Financial Law Prof Blog

...bankers and brokers defiantly have hardened in their quest for bigger and bigger paydays. Wolf of Wall Street? What we’re seeing is a pack of wild dogs that continue to use any means necessary to line their pockets no matter the fines, convictions and settlements that regulators throw at them.

Sunday, September 21, 2014

Mafia Takes Over FirstPlus Financial, Drains it Into Bankruptcy

International Financial Law Prof Blog

According to court documents and evidence introduced at the trial of his coconspirators, Scarfo is a made member of the Lucchese organized crime family.  In April 2007, Scarfo, Salvatore Pelullo and others devised a scheme to take over FirstPlus.  Scarfo and Pelullo used threats of economic harm to intimidate and remove the prior management and board of directors and replaced those officers with individuals beholden to Scarfo and Pelullo....   

Willingness to Pay to Reduce White Collar and Corporate Crime

International Financial Law Prof Blog

Utilizing a contingent valuation survey approached that has been used to estimate the cost of street crimes, the average willingness to pay for a 10% reduction in each of these four offenses is estimated to range between $70 and $75 per household. In the case of consumer fraud and financial fraud – where estimates of prevalence are available, this translates into a willingness to pay of $2,700 per consumer fraud and $21,000 for financial fraud. In contrast, the out-of-pocket costs to victims of consumer fraud have been estimated to average about $100, and about $200 to $250 for various types of financial frauds. These figures also compare favorably to the willingness to pay for a reduced household burglary of $18,000.

Wednesday, September 17, 2014

How many Wall Street and Bank CEOs went to jail compared to Rappers?

International Financial Law Prof Blog

“After the savings and loans crisis, the government brought over 1,000 criminal prosecutions and got over 800 convictions” whereas there is a glaring lack of Wall Street bankers behind bars for their role in the financial collapse. ...

Monday, September 15, 2014

Mark Cuban joins critics of SEC’s ‘broken windows’ policy

SECInternational Financial Law Prof Blog

Washington’s war on the tiniest regulatory violations — modeled after the New York Police Department’s “broken windows” policy — is drawing criticism from top investors, including Dallas Mavericks boss Mark Cuban, ...

Sunday, September 14, 2014

How innovative is the education sector?

International Financial Law Prof Blog

The public sector, including education, is often perceived as reluctant to change and disinclined to innovate. We define innovation as the introduction of “new or significantly improved products, processes, organisation or marketing methods” (OECD/Eurostat, 2005). As they are in “non-competitive” markets, public sector organisations do not face the same pressure as the private sector to innovate and improve efficiency. But what does the evidence say ? ...

Taxpayers Recover $218.7 Million From First Ally Trading Plan; Treasury Launches Second Plan to Sell Additional Ally Common Stock

International Financial Law Prof Blog :

$18.0 billion recovered on the Ally investment of $17.2 billion Treasury’s second trading plan of Ally common stock is part of its continuing effort to wind down TARP.  ...

Saturday, September 6, 2014

Will Delaware Give Up Its Status as the #1 Corporate Tax Haven?

International Financial Law Prof Blog

The tiny state is perennially at the top of the list of global tax havens and has gained a reputation as place where those with something to hide – embezzlers, arms merchants, money launders, drug dealers and the like – can set up shop, no questions asked. This is thanks to Delaware laws that allow the true owners of a corporate entity to remain a secret.

Friday, September 5, 2014

Follow Up on FATCA's Soft GIIN Registration Numbers - or - Why Isn't Every FFI Excited to Register WIth the IRS?



What I thought would happen?My educated 'guess' back in March put the number of GIIN registrants at close to 200,000 by September (before the 4Q of 2014).  Moreover, I calculated with some precision, and understanding of the industry, that the UK would have 10,000 FFI GIINs registered, while France and Germany would each have 5,000.  I looked at numbers of licensed banks, registered investment funds and estaimtes of non-registered funds such as private partnerships, estimates of trust companies and fiduciary firms.  I also estimated that registration compliance would be over 50% for September for these three countries.
Back in April and May I was still of the opinion that only 300,000 FFIs, by that FATCA definition (after exemptions by regulation and by IGA, after sponsored entities), would need to actually register with the IRS from all 250 countries and territories.
Then what happened? ...

Thursday, September 4, 2014

Did Russian State Sponsored Hackers Attack 5 US Banks To Retaliate Against Sanctions? Or the NSA Attacks Against Russia?

International Financial Law Prof Blog:

"At least one of the banks has linked the breach to Russian state-sponsored hackers, said one of the people. The FBI is investigating whether the attack could have been in retaliation for U.S.-imposed sanctions on Russia, said the second person, who also asked not to be identified, citing the continuing investigation."

Wednesday, September 3, 2014

BPI Shuts Down its MSB Operation After Money Laundering Investigation

See International Financial Law Prof Blog: The Financial Crimes Enforcement Network (FinCEN) today imposed a civil money penalty of $125,000 against BPI, Inc., a New Jersey money services business (MSB), for willful and repeated violations of the Bank Secrecy Act (BSA).  In November 2013, BPI’s parent, Banco BPI, S.A., ceased BPI's operations as an MSB ... read the full story at the Law Professor Blog Network International Financial Law Prof Blog

PwC must face $1 billion lawsuit over MF Global advice

International Financial Law Prof Blog: A federal judge on Wednesday ordered PricewaterhouseCoopers to face a $1 billion lawsuit claiming ....

Monday, August 25, 2014

Goldman Sachs' $3.15 billion Settlement with FHFA

International Financial Law Prof Blog Under the terms of the settlement, Goldman Sachs will pay $3.15 billion in connection with releases and the purchase of securities that were the subject of statutory claims in the lawsuit FHFA v. Goldman Sachs & Co., et al., in the U.S. District Court of the Southern District of New York

Monday, August 11, 2014

Why DId BNP Paribas Pays $8.9 Billion for Sanction Violations With Iran, Sudan & Cuba?

$8.9 Billion Settlement of $19 Billion Possible Penalty
On June 30th, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), as part of a combined $8.9 billion settlement (settlement agreement here) with federal and state government agencies, today announced a $963 million agreement with BNP Paribas (BNPP) to settle its potential liability for apparent violations of U.S. sanctions regulations.  The $8.9 billion is the largest OFAC settlement to date.  However, the statutory maximum and base civil monetary penalties in this case were $19,272,380,006.
What Did BNP Paribas Do Exactly?
For a number of years, up to and including 2012, BNPP processed thousands of transactions to or through U.S. financial institutions that involved countries, entities, and/or individuals subject to the sanctions programs listed above.  BNPP appears to have engaged in a systematic practice, spanning many years and involving multiple BNPP branches and business lines, that concealed, removed, omitted, or obscured references to, or the interest or involvement of, sanctioned parties in U.S. Dollar Society for Worldwide Interbank Financial Telecommunication payment messages sent to U.S. financial institutions.
The specific payment practices the bank utilized in order to process sanctions-related payments to or through the United States included omitting references to sanctioned parties; replacing the names of sanctioned parties with BNPP’s name or a code word; and structuring payments in a manner that did not identify the involvement of sanctioned parties in payments sent to U.S. financial institutions.  While these payment practices occurred throughout multiple branches and subsidiaries of the bank, BNPP’s subsidiary in Geneva and branch in Paris facilitated or conducted the overwhelming majority of the apparent violations.
How Bad Was BNP Paribas Conduct?
OFAC determined that BNPP did not voluntarily self-disclose its violations (it was a whistleblower), and that the apparent violations constitute an egregious case: BNPP’s systemic practice of concealing, removing, omitting, or obscuring references to information about U.S.-sanctioned parties in 3,897 financial and trade transactions routed to or through banks in the United States between 2005 and 2012, including:
$8 Billion with Sudan
BNPP officials have described Darfur as a “humanitarian catastrophe” and, while discussing the Sudanese business, noted that certain Sudanese banks “play a pivotal part in the support of the Sudanese government which…has hosted Osama Bin Laden and refuses the United Nations intervention in Darfur.”  BNPP’s senior compliance personnel agreed to continue the Sudanese business and rationalized the decision by stating that “the relationship with this body of counterparties is a historical one and the commercial stakes are significant. For these reasons, Compliance does not want to stand in the way.”
BNPP processed 2,663 wire transfers totaling approximately $8,370,372,624 between September , 2005, and July 24, 2009, involving Sudan.  The total base penalty for this set of apparent violations was $16,826,707,625.  $8 billion in four years – approximately $2 billion a year.
$1 Billion with Iran
BNPP processed 318 wire transfers totaling approximately $1,182,075,543 between July 15, 2005, and November 27, 2012, involving Iran.  The total base penalty for this set of apparent violations was $2,382,634,677.
$700 Million With Cuba
BNPP processed 909 wire transfers totaling approximately $689,237,183 between July 18, 2005, and September 10, 2012.  The total base penalty for this set of apparent violations was $59,085,000.
$1.5 Million with Burma
BNPP processed seven wire transfers totaling approximately $1,478,371 between November 3, 2005, and approximately May 2009, involving Burma.  The total base penalty for this set of apparent violations was $3,952,704.
Who Was Involved?
Benjamin M. Lawsky, New York’s Superintendent of Financial Services, said, “BNPP employees – with the knowledge of multiple senior executives – engaged in a long-standing scheme that illegally funneled money to countries involved in terrorism and genocide. As a civil regulator, we are taking action today not only to penalize the bank, but also expose and sanction individual BNPP employees for wrongdoing. In order to deter future offenses, it is important to remember that banks do not commit misconduct – bankers do.”
- COO Signed Off on Continuing Illicit Transactions at Meeting Where He Asked Minutes Not to be Taken”;
- North American Head of Ethics/Compliance wrote: “The Dirty Little Secret Isn’t So Secret Anymore, Oui?”
Did Anyone Go to Prison?
No.  No charges have been brought.
If Not Prison, Then What Was the Discipline?
Some executives were merely ‘separated’.  What does separated mean?  Asked to resign?  Awarded severance?  Kept the high salaries and bonuses derived from the illicit business – yes.  What of the COO who “signed off on continuing illicit transactions at a meeting where he asked minutes not to be taken“?  He was allowed to retire.  He keeps his pension, retirement funds, bonuses …
What BNP states: “As a result of BNP Paribas’ internal review, a number of managers and employees from relevant business areas have been sanctioned, a number of whom have left the Group.”
But what the Department of Financial Services states: At DFS’s direction, 13 individuals were terminated by or separated from the Bank as a result of the investigation, including the following senior executives:
  • George Chodron de Courcel, Group Chief Operating Officer
  • Vivien Levy-Garboua, Current Senior Advisor to the BNPP Executive Committee and Former Group Head of Compliance
  • Christopher Marks, Group Head of Debt Capital Markets
  • Dominique Remy, Group Head of Structured Finance for the Corporate Investment Bank (CIB)
  • Stephen Strombelline, Head of Ethics and Compliance for North America
In total, including those terminated, the Department of Financial Services reports that the Bank disciplined 45 employees, with levels of discipline ranging from dismissals, to cuts in compensation, demotion, and other sanctions, while 27 additional BNPP employees who would have been subject to potential disciplinary action during the investigation had already resigned.
Who Is Paying the Fine?
BNP Paribas shareholders inevitably.  No fines have been levied against the employees involved.  BNP shareholders include:
Belgian State (through SFPI (1))10.3%
Grand Duché de Luxembourg1.0%
Employees5.5%
Retail shareholders4.9%
European institutional Investors46.1%
Non-European institutional investors30.0%
Other and unidentified2.2%
Total100%
How Will BNP Minimize the Risk of Its Doing It Again?  
Under the settlement agreement, BNPP is required to put in place and maintain policies and procedures to minimize the risk of the recurrence of such conduct in the future.  BNPP is also required to provide OFAC with copies of submissions to the Board of Governors relating to the OFAC compliance review that it will be conducting as part of its settlement with the Board of Governors.
BNP states that it has designed new robust compliance and control procedures:
  • a new department called Group Financial Security US, part of the Group Compliance function, will be headquartered in New York and will ensure that BNP Paribas complies globally with US regulation related to international sanctions and embargoes.
  • all USD flows for the entire BNP Paribas Group will be ultimately processed and controlled via the branch in New York.
Read my previous analysis warning to financial institutions about lack of education
book cover
LexisNexis’ Money Laundering, Asset Forfeiture and Recovery and Compliance: A Global Guide - This eBook with commentary and analysis by hundreds of AML experts from over 100 countries,  is designed to provide the compliance officer accurate analyses of the AML/CTF Financial and Legal Intelligence, law and practice in the nations of the world with the most current references and resources. The eBook is organized around five main themes: 1. Money Laundering Risk and Compliance; 2. The Law of Anti-Money Laundering and Compliance; 3. Criminal and Civil Forfeiture; 4. Compliance and 5. International Cooperation.  As these unlawful activities can occur in any given country, it is important to identify the international participants who are cooperating to develop methods to obstruct these criminal activities.

Friday, August 8, 2014

William Byrnes' Thoughts on Online Legal Education


The article comprises four sections. Part 1 addresses the economics reasons for, and logistics considerations of, the Internet-delivered Program. Part 2 reviews the pedagogicalin officeapproach to legal education employed in the United States, criticisms thereof, and finally examines an emerging pedagogical trend in the United Kingdom. Part 3 reviews the teaching tools employed in the Program, and Part 4 reviews the practical aspects of developing the Program and obtaining American Bar Association (ABA) acquiescence, and reviews the Internet-delivered law courses that came before it. Finally, the article concludes with some personal observations.
The Decision Process …
Before making the decision to offer an Internet delivered Masters of Law program, integration of the Internet with legal education must be a matter of strategic thinking by the Faculty and Administration. A law school should consider several issues in its decision to pursue integration between legal education and the Internet. From a pedagogical perspective (addressed in Part 2 below), a law school’s faculty may determine a need to provide a complementary methodology for its legal teaching methods. Collaterally, the law school may want to stay in the academic and technology forefront relative to competitor law schools. The law school may also want to maintain or increase the student body size beyond the law school’s geographical boundary. ...
teaching photo
The Pedagogy for the Internet Delivered Program ...
Because the Program had to be approved by a majority vote of the law school's faculty, a discussion will ensued between the monastic school traditionalists and the technological pioneers. This discussion in focused on the use of the Socratic Method in the Program's pedagogy. Consequently, Part 2 reviews the pedagogical approach of the Socratic Method, criticisms thereof, and finally examines an emerging pedagogical trend of 'student-centered learning' in the United Kingdom. The Program's pedagogy follows the United Kingdom approach in combination with the suggested US alternatives to the Socratic Method. … read the 47 page at SSRN

Wednesday, August 6, 2014

New IRS Form 1023-EZ for Small Charities Reduced to 3 pages

On Monday July 1, the IRS released its new, short application form for small charities to apply for 501(c)(3) tax-exempt status.  The new Form 1023-EZ is three pages long (instructions link is here), compared with the standard 26-page Form 1023.

As many as 70% of all charity applicants for tax exemption will qualify to use the new streamlined three page form. Most organizations with gross receipts of $50,000 or less and assets of $250,000 or less are eligible.  The IRS created a Q&A worksheet to help an organization's representative determine if it can use the new 1042-EZ: link available here:
Question 1: Do you project that your annual gross receipts will exceed $50,000 in any of the next 3 years? (Gross receipts are the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses. You should consider this year and the next two years.) 
Question 2: Do you have total assets in excess of $250,000? (Total assets includes cash, accounts receivable, inventories, bonds and notes receivable, corporate stocks, loans receivable, other investments, depreciable and depletable assets, land, buildings, equipment, and any other assets.)
"Previously, all of these groups went through the same lengthy application process -- regardless of size," aid IRS Commissioner John Koskinen. "It didn't matter if you were a small soccer or gardening club or a major research organization. This process created needlessly long delays for groups, which didn’t help the groups, the taxpaying public or the IRS.”

The change will allow the IRS to speed the approval process for smaller groups and free up resources to review applications from larger, more complex organizations while reducing the application backlog. Currently, the IRS has more than 60,000 501(c)(3) applications in its backlog, with many of them pending for nine months.  There are more than a million 501(c)(3) organizations recognized by the IRS.

The Form 1023-EZ must be filed using pay.gov, and a $400 user fee is due at the time the form is submitted. Further details on the new Form 1023-EZ application process can be found in Revenue Procedure 2014-40, posted today on IRS.gov.

For a history of US tax treatment of charity, please read http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2304044  This article studies the American political debate on the charitable tax exemption from 1864 to 1969, in particular, the debate regarding philanthropic, private foundations.

tax-facts-online_medium
“Robert Bloink, Esq., LL.M., and William H. Byrnes, Esq., LL.M., CWM®—are delivering real-life guidance based on decades of experience.” said Rick Kravitz.  “The authors’ knowledge and experience in tax law and practice provides the expert guidance for National Underwriter to once again deliver a valuable resource for the financial advising community.”
Anyone interested can try Tax Facts on Individuals & Small Business, risk-free for 30 days, with a 100% guarantee of complete satisfaction.  For more information, please go to www.nationalunderwriter.com/TaxFactsIndividuals or call 1-800-543-0874.
 Authoritative and easy-to-use, 2014 Tax Facts on Insurance & Employee Benefits shows you how the tax law and regulations are relevant to your insurance, employee benefits, and financial planning practices.  Often complex tax law and regulations are explained in clear, understandable language.  Pertinent planning points are provided throughout.
2014 Tax Facts on Investments provides clear, concise answers to often complex tax questions concerning investments.  2014 expanded sections on Limitations on Loss Deductions, Charitable Gifts, Reverse Mortgages, and REITs.

Monday, August 4, 2014

When Should A Client's Portfolio Contain a Modified Endowment Contract?

A MEC is essentially a type of cash value life insurance policy that is subject to less favorable tax rules because it has been funded with premiums during the first seven years of the policy’s existence that exceed certain maximum amounts (depending on the policy’s benefit level and cost).  

Despite this, the MEC’s worth today can remain substantial.  In some cases, dismissing the MEC too quickly can cause your clients to miss out on a valuable product. 

For clients with sufficient means, the opportunity to rapidly fund a life insurance contract so as to become subject to the rules governing MECs may actually provide a powerful strategy in the well-rounded planner’s arsenal.

read the discussion of Professor Byrnes and Robert Bloink about Modified Endowment Contracts’ Role in Estate and Post-Retirement Planning in the article "The MEC and the Modern Portfolio"


If you are interested in discussing the Master or Doctoral degree in the areas of financial planning, please contact me: profbyrnes@gmail.com to Google Hangout or Skype that I may take you on an “online tour”