April 27, 2010 - In a 5-3 ruling that dealt another blow to consumer rights, the U.S. Supreme Court ruled arbitration panels may not allow arbitration on a class-wide basis unless the arbitration agreement expressly authorizes it. Although the parties in Stolt-Nielsen S.A. v. AnimalFeeds International Corp. were businesses, not consumers, the effects of the ruling will directly impact consumers who have signed loan agreements and other contracts containing arbitration clauses. Now, if a company cheats a million of its customers out of $5 each, it will be able to keep the $5 million in unjust gain if it had the foresight to enter into contracts with its customers which require arbitration and which don’t allow class actions. No consumer can afford to arbitrate a $5 claim. If a consumer were allowed to file for arbitration on a class-wide basis, the consumer would be able to find attorneys to represent the class in arbitration proceedings. This is just another in a long line of Supreme Court rulings that have put the rights of businesses ahead of the rights of consumers. [click to continue…]
Tagged as:
arbitration,
class action,
Consumer Protection,
consumers,
Supreme Court
I’m not a Wall Street lawyer, so I’m asking a novice question here, but I would like to know why the synthetic CDOs created by Goldman Sachs aren’t considered “wagering contracts” void under New York state law? Before I read Michael Lewis’s fantastic book “The Big Short” I had never heard of synthetic CDOs. Lewis explained how Goldman Sachs and other Wall Street firms created synthetic CDOs to allow investors to place a bet on the probability that subprime mortgages would pay off. The synthetic CDOs allowed investors to bet on the mortgages without having any ownership interests in the mortgages themselves. It was purely and simply a gamble. Investors who believed the mortgages were healthy could go “long” on a synthetic CDO, while investors who thought the mortgages would default could go “short.” If the mortgages defaulted (as they did), the shorts made fortunes, while the institutional longs lost fortunes. [click to continue…]
Tagged as:
derivatives,
gambling contracts,
Goldman Sachs,
Michael Lewis,
subprime mortgages,
synthetic CDOs,
The Big Short,
wagering contracts
The Food and Drug Administration is requiring Bayer, the maker of Yaz/Yasmin birth control pills, to change its ads and promotional materials to add information about the risk of thromboembolism. Bayer recently changed the drugs’s warning labels to include information about the risk of thromboembolism in women using Yasmin compared to contraceptives using other progestins. [click to continue…]
Tagged as:
Bayer,
FDA,
Food and Drug Administration,
thromboembolism,
Yasmin,
Yaz
Toyota will recall 870,000 Sienna mini-van sold in the United States and Canada since the 1998 model year because of a risk that the spare tire could drop into the road.
The recalls cover mini-van sold in several cold weather US states and Canada due to potential corrosion from long-term exposure to road salt that could cause the tire to fall from the vehicle.
The recalls affect 600,000 minivans in the US and 270,000 in Canada. (More)
Tagged as:
minivans,
recall,
Sienna,
Toyota
I couldn’t make this up. According to a Fox News article, 7,500 online shoppers sold their souls to a computer game retailer pursuant to a clause in the Terms of Service the customers accepted. The company added the “immortal soul” clause to their Terms of Service earlier this month. The clause provides: “”By placing an order via this web site on the first day of the fourth month of the year 2010 Anno Domini, you agree to grant Us a non transferable option to claim, for now and for ever more, your immortal soul. Should We wish to exercise this option, you agree to surrender your immortal soul, and any claim you may have on it, within 5 (five) working days of receiving written notification from gamesation.co.uk or one of its duly authorised minions.” [click to continue…]
After a break from blogging, I’m finally back at it. Some stuff I found interesting during the break: [click to continue…]
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