News & Insights

A February 27, 2018, decision by the U.S. Supreme Court resolved a split in the circuit courts by clarifying that a bankruptcy trustee, creditor committee, and other bankruptcy estate entity may claw back preferences and constructive fraudulent transfers involving the purchase of securities even though the transaction was effectuated by depositing funds or securities with financial institutions. The Court’s decision in Merit Management Group, LP v. FTI Consulting, Inc., held that Section 546(e)’s safe harbor provision requires courts to look to the transaction being challenged and determine whether the defendant in the avoidance action – the ultimate recipient of the funds – is a “covered” entity under the statute. The analysis does not focus on the constituent components of the transaction that may involve financial institutions.

As the 2017 tax season approaches, employers must remain diligent to protect against email “phishing” scams designed to steal employees’ highly-confidential Form W-2 information.  This type of data breach scam, which appears to be growing in popularity, involves a cybercriminal sending a “phishing” or “spoofed” email to employees in the a company’s accounting or human resources department of a company.  The email is designed to appear as if it was sent by the CEO or some other high-ranking officer, and it requests that the employee respond by sending copies of the IRS Form W-2 tax forms for all employees.