Recommending Retirement Investments?

Is your “financial advisor” subject to the new Department of Labor Conflict of Interest in Retirement Plans and Fiduciary rules?

Have you asked them the following questions:

Do you consider yourself a fiduciary?

  • If not, why not?
  • Are you willing to act as a fiduciary with a duty to act solely on my behalf?
  • Are you willing to disclose to me any conflicts of interest that may interfere with your acting solely on my behalf?
  • Are you willing to put this commitment in writing?

How are you compensated?

  • Do you earn fees or commissions based on the number of products that I buy or the size of my investment?
  • Will you earn a higher fee or other type of compensation if I invest in certain products you recommend or will you receive fees for services related to specific investment products?
  • Will you provide a list of the fees and commissions you receive either directly from me or from other sources in writing?

Are you a licensed or registered investment adviser?

  • Are you registered with the State, U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), or the Certified Financial Planner Board of Standards, Inc. (CFP Board)?
  • For how long? What is your experience?
  • Who supervises you, or, are you a sole practitioner?
  • If a sole practitioner, do you have professional liability insurance?
  • Have you (or your firm) ever been disciplined? For what?

 

I can help you determine whether YOUR “financial advisor” is your fiduciary?

And if you suspect that your financial advisor is not acting in your best interest, or have been harmed by a recommendation that they have made, let’s discuss what might be done to help you.

Call me at 310-570-2399 or email me at gregory[@]rutchik.com

 

Maui Waui, Medical Marijuana and Trademarks

According to Jeff Spacoli in “Fast Times at Ridgemont High”, “All I need are some tasty waves, a cool buzz, and I’m fine.”  

Upated: June 2014: Hershey sues edible marijuana company

If you run a medical marijuana dispensary or a manufacture or sell vapors, edibles, pens or product for a legal dispensary, you may also want a Federal trademark to be “FINE.” (See my other post on brand protection) The problem is, the Federal government is not just giving away trademarks – the exclusive right to use a word or mark in connection with a good or service – when connected to medical marijuana.

Here are some guidelines to help you entrepreneurs out there avoid wasting your money on trademark applications without any hope of obtaining protection.

The Controlled Substances Act:

  1. Is the product or service your running the “manufacturing, distributing, dispensing, or possessing certain controlled substances, including marijuana and marijuana-based preparations”? 
  2. If yes, you probably violate the Federal Controlled Substances Act and will be rejected.  See 21 U.S.C. §§812, 841(a)(1), 844(a); see also 21 U.S.C. §802(16) (defining “[marijuana]”).
  3. Is your business focused on “sale of, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia”? This includes: ingesting, inhaling, or otherwise introducing into the human body?
  4. And is the thing your selling medical marijuana?
  5. IF yes to 3 and 4, then, you probably violate the CSA too and will get rejected under 21 U.S.C. §863.

For example,

  • MAUI WAWI – REJECTED – as medical marijuana – because it is a controlled substance under Federal law.
  • MYST 5 – REJECTED – as Oral spray for absorption of medical marijuana – because a product that is inhaling a controlled substance violates Federal law.
  • PRIMORA – REJECTED – as medical marijuana – same as above.

Avoid the CSA:

  1. Your product must be lawful under Federal law – not state law – when applying for a US Trademark;
  2. If your services DO NOT involve the provision of marijuana, marijuana-based preparations, or marijuana extracts or derivatives or any other illegal controlled substances YOU ARE GOOD;
  3. If your services are merely an INFORMATION source for how to “obtain and/or grow marijuana, marijuana-based preparations, or marijuana extracts or derivatives or any other illegal controlled substances” you APPEAR TO BE GOOD;
  4. If your services involve POSSESSION or HANDLING OF, you are probably NOT GOOD to get registration.

Here a few goods and services that have achieved Federal registration:

  • IC 009. US 021 023 026 036 038. G & S: Downloadable computer software featuring a database of information regarding cannabis strains, indications and effects and cannabis dispensaries and their inventories and locations. 
  • IC 035. US 100 101 102. G & S: Providing consumer information in the field of medical marijuana dispensary inventories and locations; providing links to web sites of others featuring consumer information on medical marijuana inventories and locations; providing a web site featuring the ratings, reviews and recommendations on products and services for commercial purposes posted by users; providing consumer information regarding medical marijuana dispensaries, inventories and locations. FIRST USE: 20101024. FIRST USE IN COMMERCE: 20101024
  • IC 039. US 100 105. G & S: Providing a web site and web site links to geographic information and map images in the field of medical marijuana dispensary businesses via interactive computer networks. FIRST USE: 20101024. FIRST USE IN COMMERCE: 20101024
  • IC 042. US 100 101. G & S: Computer services, namely, creating an on-line community for registered users to participate in discussions, get feedback from their peers, form virtual communities, and engage in social networking in the field of medical marijuana; creating and maintaining blogs for others. 
  • IC 044. US 100 101. G & S: Providing health information in the field of medical marijuana, and regarding indications and effects of particular cannabis strains, and regarding medical marijuana dispensaries, inventories and locations. FIRST USE: 20101024. FIRST USE IN COMMERCE: 20101024
  • IC 042. US 100 101. G & S: Computer services, namely, providing on-line non-downloadable web-based computer software for patient documentation and history, inventory control, and inventory management for use among medical marijuana centers, dispensaries, collectives, and patients. FIRST USE: 20100100. FIRST USE IN COMMERCE: 20100100
  • IC 041. US 100 101 107. G & S: Organization and arrangement of educational and instructional seminars and conferences regarding legal, medical and political developments and societal attitudes about medical marijuana not including the provision or display of marijuana, marijuana-based preparations, or marijuana extracts or derivatives, synthetic marijuana, or other substances controlled by the Controlled Substances Act; organization and arrangement of exhibitions for educational, cultural and entertainment purposes regarding legal, medical, and political developments and societal attitudes about medical marijuana not including the provision or display of marijuana, marijuana-based preparations, or marijuana extracts or derivatives, synthetic marijuana, or other substances controlled under the Controlled Substances Act; organization and arrangement of musical exhibitions. FIRST USE: 20100222. FIRST USE IN COMMERCE: 20100222
  • IC 041. US 100 101 107. G & S: Education services, namely, providing seminars and classes in the field of medical marijuana; Entertainment, namely, live music concerts; Providing facilities for educational conventions.
  • Physician services; medical evaluation of individuals to determine whether a medical diagnosis or medical condition is present that may benefit from treatment with medical marijuana.

 

I would be happy to talk you through – or off the ledge – with regards to how best to protect your service or product that does not fall directly afoul of the CSA as well as discussing state and other approaches for what would surely end you up with a US Trademark rejection notice.  Give me a call if I can help 310-570-2399.

Are You A Corporate Officer Sued As An Individual?

“Why am I being sued as an individual?”, President says.

“What is the benefit of having an entity if I am going to be sued as an individual?”

I do not know about you but regardless of the claims in litigation these days, whether defending a direct claim or a cross-claim, director’s and officers are being sued as individuals way too often. Clients ask why is this possible and why aren’t plaintiff’s counsel held to a standard preventing this type of pleading.

Rules for the Road: (1) Plaintiff of course must have a good faith basis for any claim made in complaint and lawyer is held in California to the obligation to “support state laws” See Cal CCP 128.5 re “frivolous claims” and Cal. B&P 6068(a) Cal B&P 6068(a) (2) Plaintiff has burden of establish facts to support claims. CCP 425.10

<1) Don’t forget about tendering claims to insurance and requesting appointment as Cumis counsel 
Before I go into the substantive issue, remember to advise your clients that when they – in any form – are sued, they may be entitled to have their own lawyer in addition to the lawyer appointed by their insuror, and the insuror may be forced to pick up the fees. Of course, read the reservation of rights letter that comes from the insuror after tendering and consult insurance counsel to determine whether the client has right to appoint Cumis counsel. (See generally Reservation of Rights and e.g. Original Cumis Case See also California Civil Code §2860, as outlined in Buss v. Superior Court, (1997) 16 Cal.4th 35 . Under that statute, a conflict of interest may exist “when an insurer reserves its rights on a given issue and the outcome of that coverage issue can be controlled by counsel first retained by the insurer for the defense of the claim…”

(2) Are facts alleged that the officer acted independently to participate or sanction the wrongful act?
Directors and shareholders of a corporation do not incur personal liability for torts of the corporation merely by reason of their official positions, unless they participate in the wrong or authorize that it be done (see Frances T. v. Village Green Owners Assn. (1986) 42 Cal. 3d 490, 503-504). The facts must show that the officer, shareholder, director “directed, authorized, or in some meaningful sense participated” in the wrongful act. It is not enough that they were the officer of the entity at the time the wrongful act “occurred.”

(3) Failure to Supervise Does Not Establish Individual Liability on Part of Officer.
Further cases state that absent personal misconduct by the supervising broker, the designated officer of a corporate broker does not assume personal civil liability to third persons based solely on failure to supervise a salesperson (see In re Grabau (N.D. Cal 1993) 151 B.R. 227; Walters v. Marler (1978) 83 Cal. App. 3d 1, 35). An officer or director of a corporate broker who is negligent in failing to properly supervise the activities of a fraudulent or negligent salesperson is not liable to third persons for the salesperson’s conduct. (Walters v. Marler at 35).