August 20, 2007

Domestic Service Employees Are Exempt from Overtime Requirements under the FLSA

The Eleventh Circuit Court of Appeals has ruled that, under the Fair Labor Standards Act ("FLSA") domestic service employees, such as "granny nannies," are exempt from overtime rules under certain conditions. In Buckner v. Fla. Habilitation Network, Inc. held that overtime is not due to an employee of a home health care service who worked more than 40 hours in a week. The key point in this decision was that the Plaintiff was not a direct employee of a family but was paid by an agency who employed her.

The decision is a blow to home health care workers employed directly by employment agencies throughout the state of Florida. Such employees now need to negotiate the terms and conditions of their employment more carefully or be required to work burdensome work weeks far in excess of 40 hours without the possibility of overtime pay.

That's the view from The Law Planet, Jupiter, Florida

Posted by Admin |

Posted In: Labor & Employment

August 17, 2007

Hedge Fund Collapse Featured on YouTube

OK, I try to limit the posts to once a week, so I can actually do some billable work, but I read an article about this video on YouTube and I couldn't resist.

Enjoy.

That's the twisted view from The Law Planet - Jupiter, Florida

Posted by Admin |

Posted In: Investments , Securities Industry

August 8, 2007

Two Bear Stearns Hedge Funds File for Bankruptcy

Bear Stearns announced bankruptcy petitions for two of its hedge funds. The term "hedge fund" has been used to describe a variety of investment vehicles. Generally, these funds are designed for high net worth investors with significant assets. The investors in these funds have virtually no say in how the funds are invested and, generally, they pay significant management fees to the fund manager. They are usually organized as partnerships.

These funds invested heavily in sub-prime mortgage instruments. This is the domestic equivalent of Third World debt. These are instruments backed by loans made to borrowers with low quality credit.

To make matters worse, at least one of these funds appears to have been using leverage to purchase these instruments. Leverage is a buzzword for borrowing money. So the leveraged fund is borrowing money to buy investments that loaned money to people with bad credit. When it is explained this way, instead of buried in some dense disclosure document, would anyone place any significant amount of money in this investment?

sub-prime lending survived because of the real estate boom in most parts of the country. Now that the gloss is off of the real estate market, the sub-prime market has come crashing down, taking those that were profiting from the higher interest rates of sub-prime loans with it. Bear Stearns, as manager of the funds, had no monetary risk unless it had some of its own money in the funds, which I doubt.

The hedge fund "industry" is an area that desperately needs regulation. I'm guessing that some of the "high net worth" investors in these funds are going to be people who had no business being in the investment. Only time will tell.

Posted by Admin |

Posted In: Investments , Securities Industry

August 6, 2007

"Old" New NASD name is a "no go."

The National Association of Securities Dealers, Inc. recently formalized the merger of its regulatory arm with that of the NYSE and changed its name to "FINRA." The original proposed name of the combined securities regulatory authority was to be "SIRA". The original choice could apparently be construed as offensive to Muslims. It seems that nobody considered this when the name was first concocted.

It got me to thinking about other ill-fated names over the years. (Warning: this is going to go a little off-topic). In the securities industry, my former employer Prudential Securities, then-known as Prudential-Bache Securities, came out with a mutual fund whose stock symbol was PBARF. Ick.

Chevrolet, every now and again, resurrects the "Nova" nameplate. Unfortunately, for Spanish-speaking customers, Nova could be pronounced "No va" meaning that it "doesn't go."

Let's not forget "With a name like Smucker's it has to be good!" I still repeat the Saturday Night Live spoof "With a name like Painful Rectal Itch, it's got to be good" with a smile on my face.

And then there's Coca-Cola. Remember "Coke adds life"? Well, as I recall, there were news stories that translating that advertising slogan into certain Chinese dialects resulted in the literal translation of "Coke brings back your ancestors from the dead." Now, doesn't that sound thirst-quenching?

What does that have to do with The Law Planet? Very little other than to say that it is important to anticipate the unintended consequences of your actions -- and get a good translator.

Posted by Admin |

Posted In: Securities Industry

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