July 23, 2020 - Samuels Yoelin Kantor LLP

Emojis in Court: The Rise of Case References

March 8, 2021July 23, 2020 by Victoria Blachly

With colorful caricatures ranging from mind-blown facial expressions ? to coconut shrimp ?, there are hundreds of emojis to express a multitude of different feelings, thoughts, and emotions. In the last decade, emoji have cemented a permanent place in the world of e-communications. Emoji now represent a diverse array of skin tones ✋✋?✋?✋? and physical disability ? ?. Oxford Dictionaries’ 2015 Word of the Year was awarded to the Face with Tears of Joy Emoji ?. It should stand as no surprise that everyone’s favorite new way to communicate has permeated its way into our legal system.

Let’s start with the prevalence of emoji in our virtual vernacular. According to Slate, 92{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} of the online population uses emoji. As of 2016, 2.3 trillion mobile messages incorporate emoji annually as of 2016. That means nearly 10 trillion emoji-laced messages have been sent in the past four years.

According to The Verge, emoji and emoticon references in U.S. court cases rose exponentially between 2004 and 2019. Santa Clara University law professor Eric Goldman, leading researcher on emoji references in court opinions, noted that 30{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} of all U.S. Court opinions now reference emoji or emoticons. In 2017, an Israeli couple was charged thousands of dollars in fees after an Israeli judge ruled that their use of emoji to a landlord signaled an intent to rent his apartment. Who would have guessed a few years ago that a champagne bottle ?, squirrel ?, and comet ☄️ could constitute an agreement to rent an apartment?

According to Professor Eric Goldman, the use of emoji as evidence increased from 33{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} in 2017 to 53{45ef85514356201a9665f05d22c09675e96dde607afc20c57d108fe109b047b6} in 2018. In some cases, emoji are described to jurors, rather than seen and interpreted themselves, and in other cases emoji are omitted from evidence, altogether. Emoji are most prevalent in sexual harassment, criminal, and workplace lawsuits. In the 2017 murder case of Commonwealth v. Castano, Massachusetts prosecutors argued that an emoji with “X” eyes ? showed that an individual who received the message knew that something was happening. In the sex trafficking case of The People v. Idris Bilal Jamerson, expert witnesses detailed how a series of sent emoji, including a crown ?, high heels ?, and money bags ? provided evidence of prostitution.

Emoji even come in a variety of dialects. Different companies can represent emoji on their platforms in different ways. In a study comparing Android and Apple users’ interpretation of emoji, Google users reported a grinning face as meaning blissful happiness, while Apple users thought it symbolized a readiness to fight. One can only imagine the flurry of misinterpretation defenses and novel legal arguments that such interpretations will cause.

As we continue to express ourselves through emoji, they will continue to permeate our society further and further. In a few years, emoji-interpreting expert witnesses will become more resourceful in the court room and the debate around what certain emoji mean will become a greater focus of legal arguments by lawyers across the world.

Victoria Blachly is a partner at SYK, and an experienced fiduciary litigator that works with many elderly clients, cases and causes. She is also a proud Board Member for the Oregon Alzheimer’s Association Chapter.

Peter Esho is a Chaldean-American law student in his final year at Lewis & Clark Law School, and a senior law clerk at Samuels Yoelin Kantor. Born and raised in Michigan, he moved to Portland to attend Lewis & Clark. Peter enjoys kayaking and playing guitar, and his primary legal interests are in intellectual property and business law.

SEC Takes Action: False & Misleading Conduct Related to COVID-19

March 8, 2021July 23, 2020 by Darlene Pasieczny

The SEC is taking action against numerous companies for their false and misleading conduct related to COVID-19

Since February 2020, the U.S. Securities and Exchange Commission (SEC) has temporarily suspended trading in over 30 stocks and filed several enforcement actions against individuals and microcap securities issuers based on fraudulent COVID-19-related claims.

The enforcement actions have a common theme – fraudulent misrepresentations made in press releases and online forums about the company providing COVID-19 tests or protective equipment, in an attempt to unlawfully drive up the share price of the company’s stock.

These emergency enforcement actions seek to protect the public by freezing defendants’ assets, getting permanent injunctions to bar the wrongdoers from further violations of the securities laws, officer-and-director bars against individual participants, disgorgement of ill-gotten gains, civil money penalties, and penny stock trading bars.

SEC v. Nelson Gomes et al. (filed 06/09/20)

The SEC took emergency action against this group of individuals and offshore entities based on allegations of a fraudulent scheme to profit from the COVID-19 pandemic. The allegations include that the defendants generated more than $25 million from illegal microcap stock sales, using promotional campaigns that falsely asserted that the multiple companies involved could produce medical grade facemasks and automated retail kiosks. Company insiders dumped large amounts of the shares, hiding the activity so investors were unaware of the “pump and dump” scheme. The SEC warns that investors should generally be on the alert for fraud involving microcap stocks, as they may be more prone to manipulative schemes by fraudsters.

SEC v. Jason C. Nielsen (filed 06/09/20)

The SEC brought charges against a penny stock trader based in Santa Cruz, California, who allegedly engaged in a “pump-and-dump” scheme. The SEC claims that the trader made numerous false statements in an online investment forum about a biotechnology company, Arrayit Corporation, to artificially drive demand up, so the trader could sell his shares for a profit. The trader falsely asserted that the company had developed an approved COVID-19 blood test. The SEC also claims that the trader scheduled and subsequently cancelled several large purchases of the company’s stock as another way to create an apparent high demand for the stock. Investors should be attentive to signs of stock manipulation, especially those regarding products or services related to COVID-19.

SEC v. Applied BioSciences Corp. (filed 05/14/20)

The SEC filed a complaint against microcap company Applied BioSciences Corp. based on the company’s misleading press releases in March 2020, intended to exploit the coronavirus pandemic for profit. The company’s press releases claimed to offer shipment of at-home COVID-19 tests that could be used by individuals and institutions. The SEC complaint alleges that the tests were not approved for at-home use, had not been approved by the FDA, and, as of the press release, the company had not yet shipped any of the tests. The false and misleading press releases caused the company’s stock price and trading volume to soar.

SEC v. Turbo Global Partners, Inc. and Robert W. Singerman (filed 05/14/20)

The SEC filed a complaint against Turbo Global Partners, Inc. and its CEO and chairman, Robert W. Singerman, based on a “pump and dump” scheme to artificially increase stock value by issuing two false press releases in late March and early April 2020. The press releases announced the company’s involvement in a “multi-national-public-private-partnership” to distribute and sell non-contact fever-detecting equipment with facial recognition technology, which would soon be available in each state. The SEC alleges the releases were materially false and misleading in numerous ways, including that no such partnership existed, the equipment did not have such technology, and that the company’s CEO knew his statements to be false. The false and misleading press releases caused the company’s stock price and trading volume to all-time highs.

SEC v. Praxsyn Corporation and Frank J. Brady (filed 04/28/20)

In late April, the SEC charged Praxsyn Corporation and its CEO, Frank J. Brady, with issuing false statements regarding the company’s ability to source and distribute N95 masks. In a press release, Praxsyn claimed that it had established a supply chain that would allow the company to sell millions of masks. Subsequently, Praxsyn announced that it already had a large stock of masks. The SEC’s complaint alleges that Praxsyn neither had any masks on hand nor a single contract with a manufacturer or supplier. After being pressed by regulatory inquires, the company admitted in a third press release that it never had N95 masks on hand, and its artificially inflated share price and trading volume dropped to about what it had been prior to the false press releases.

The SEC Temporarily Suspended Trading in the Securities of the Following Companies for Violations Related to COVID-19

Using its authority under Section 12(k) of the Securities and Exchange Act of 1934, the SEC temporarily suspended trading due to concerns about the accuracy and adequacy of publicly available information and public statements made by these issuers:

Blackhawk Growth Corp. (6/22/2020)
Micron Waste Technologies Inc. (5/26/2020)
WOD Retail Solutions Inc. (5/20/2020)
Custom Protection Services, Inc. (5/5/2020)
CNS Pharmaceuticals Inc. (5/1/2020)
Moleculin Biotech, Inc. (5/1//2020)
WPD Pharmaceuticals, Inc. (5/1/2020)
Nano Magic Inc. (4/30/2020)
Kleangas Energy Technologies, Inc. (4/27/2020)
Decision Diagnostics Corp. (4/23/2020)
Predictive Technology Group, Inc. (4/21/2020)
SpectrumDNA, Inc. (4/21/2020)
SCWorx Corp. (4/21/2020)
PreCheck Health Services, Inc. (4/16/2020)
Bravatek Solutions, Inc. (4/15/2020)
BioXyTran, Inc. (4/15/2020)
Signpath Pharma, Inc. (4/15/2020)
Applied BioSciences Corp. (4/13/2020)
Arrayit Corporation (4/13/2020)
Solei Systems, Inc. (4/10/2020)
Roadman Investments Corp. (4/10/2020)
Parallax Health Sciences, Inc. (4/10/2020)
Turbo Global Partners, Inc. (4/9/2020)
BioELife Corp. f/k/a U.S. Lithium Corp. (4/9/2020)
Key Capital Corporation (4/7/2020)
Prestige Capital Corp. (4/7/2020)
Wellness Matrix Group, Inc. (4/7/2020)
Sandy Steele Unlimited, Inc. (4/3/2020)
No Borders, Inc. (4/3/2020)
Praxsyn Corporation (3/25/2020)
Zoom Technologies, Inc. (3/25/2020)
Eastgate Biotech (2/24/2020)
Aethlon Medical, Inc. (2/27/2020)

Investing in Stock that was Previously Suspended by the SEC May Be Additionally Risky

The SEC suspends trading in a stock when it believes that suspension is required to protect investors and the public interest. Section 12(k) of the Securities and Exchange Act of 1934 allows the SEC suspend trading in any security (other than an exempted security) for a period not exceeding 10 business days. Even if trading resumes after the 10-day period, the SEC may continue to investigate a company to determine if it has defrauded investors. Importantly, the SEC is not required to alert the public of a pending investigation until an enforcement action is publicly filed, like the ones described above.

Stocks that trade on a national exchange automatically resume trading after the suspension period ends. However, securities traded on the OTC Markets, which typically are where many “penny stocks” or microcap stocks trade, do not automatically resume trading after the suspension period ends. Before trading can resume, certain requirements under SEC and FINRA rules must be fulfilled. This means that there is a risk the OTC stock never resumes trading. With no market to trade in, the stock may be worthless.

What Should You Do If You Discover a Trading Suspension?

The SEC recommends contacting the broker-dealer who sold you the stock, or who quoted the stock before the suspension. Ask if they intend to resume publishing a quote in the company’s stock. If trading resumes, expect a decline in the price of the security as investors may rush to sell of their holdings.

If a FINRA-registered broker-dealer recommended and sold you the stock, depending on the circumstances of the sale, your investment objectives and risk tolerance, and other factors, you may have a claim against the broker-dealer for your investment losses.

Investors should generally proceed carefully if trading in low-value microcap or “penny stocks.” Be wary of online forums or press releases that purport to announce a company’s COVID-19-related products or services.

Darlene Pasieczny is a fiduciary and securities litigator at Samuels Yoelin Kantor LLP. She represents clients in Oregon and Washington with matters regarding trust and estate disputes, financial elder abuse cases, and securities litigation. She also represents investors nationwide in FINRA arbitration to recover losses caused unlawful broker conduct. Her article, New Tools Help Financial Professionals Prevent Elder Abuse, was featured in the January 2019, Oregon State Bar Elder Law Newsletter.

Eviction in Oregon in the Age of COVID-19 – Frequently Asked Questions

March 8, 2021July 23, 2020 by Denise Gorrell

On June 30, 2020, Governor Kate Brown signed HB 4213 into law, replacing Executive Order 20-13 as Oregon’s eviction moratorium. Among other things, HB 4213 restricts and prohibits certain landlord actions during the COVID-19 emergency period – defined as April 1, 2020 to September 30, 2020 – as they relate to residential and commercial tenants. Landlords and tenants should be aware of the changes made by HB 4213. We here at SYK have compiled a list of Frequently Asked Questions to clear the air on some of the changes this new law makes.

May I deliver a notice of termination to my tenant’s based on their failure to pay rent?

A qualified no. HB 4213 defines as the “emergency period – April 1 to September 30 – and prohibits evictions during that time. If your tenants fall behind on their rent or other charges between those dates, HB 4213 prohibits your ability to evict them based on that nonpayment balance.

However, if your tenant has a nonpayment balance that accrued prior to April 1, 2020, you may be able to proceed with an eviction on a termination of tenancy that was issued prior to April 1, 2020. Please note, it is important to point out that every county is in a different reopening phase. Some courts may not be willing to enforce eviction notices whether or not HB 4213 applies to your tenant. And some counties may have rules and orders related to evictions that are more stringent than the statewide law.

May I charge my tenants a late fee for failing to pay rent?

During the emergency period, a landlord may not assess a late fee. Additionally, a landlord may not report a tenant’s nonpayment as delinquent to any consumer credit agency.

If my tenant falls behind, but begins to pay again, may I apply that rent to their past due rent?

No; HB 4213 creates a new order for applying payments received from tenants. If you receive payments from your tenant, it must be applied first to rent for the current period, then to utility charges, then late rent payment charges, and finally to fees or charges owed for damage claims against the tenant.

What if I want to sell my rental property to someone who wants to make it their home?

HB 4213 allows for the sale of the property and termination of the tenancy in this circumstance. You are still able to sell your rental property, as long as a landlord provides at least 90 days’ written notice to a tenant not more than 120 days after accepting an offer to purchase, and the property is to be used as the buyer’s primary residence.

If your buyer, on the other hand, is going to use the rental property as a rental, then no notice to the tenant is required, and the tenancy continues.

Once the emergency period ends on September 30, 2020, may I begin the process of evicting my tenant for not paying rent during the months of April 2020 through September 2020?

No; HB 4213 also creates a six-month grace period that begins on October 1, 2020, and ends on March 31, 2021. This grace period is designed to give tenants time to pay their outstanding balance of rent. During that time, a landlord cannot evict a tenant based on a failure to rent during the emergency period. However, if a tenant fails to pay October 2020, rent – the first month outside of the emergency period – that failure can result in a properly issued eviction notice.

How will I know my tenant is going to use the rental period to pay their nonpayment balance? Does the tenant have an obligation to give notice?

Tenants are only required to give their landlords notice of their intention to use the grace period if the landlord sends them a written notice that states when the emergency period ended and that rent is still due. If a tenant fails to do so, a landlord can recover half of one month’s rent in damages once the grace period ends. A tenant’s notice must be actual notice under ORS 90.150 or ORS 91.110 or by electronic means delivered to the landlord. A landlord is not required to give their tenants notice of the grace period, although landlords have the option to do so if they choose. If a landlord does not give their tenant notice of the grace period, tenants do not have to give their landlords notice of their intention to use the grace period.

My tenant is receiving publicly funded rental assistance. Am I entitled to those funds as their landlord?

No; HB 4213 specifically states that a tenant is not required to pay all their publicly funded rent assistance to a landlord as payment for rent.

What if I want to evict my tenant for reasons other than nonpayment of rent? Am I allowed to do so?

Under HB 4213, a residential landlord, in most situations, cannot terminate a tenancy without cause during the emergency period. However, a residential landlord may terminate a tenancy without cause during the grace period. Though most no cause/landlord qualifying reasons for eviction are not available during the emergency period, a residential landlord should consult an attorney about their particular situation. HB 4213 does not prohibit commercial landlords from terminating for no cause. HB 4213 also does not prohibit landlords for terminating for cause. Please note that courts in counties that are in Phase 1 of reopening may not be hearing eviction proceedings yet, pursuant to the Chief Justice’s Orders issued in May. Check with your county’s court clerk to determine whether eviction proceedings have resumed in your county.

Are there any penalties for trying to evict my tenant?

A landlord who violates HB 4213 may owe their tenant up to three months’ rent, actual damages, and attorney fees, if a tenant prevails in court. Additionally, the tenant may receive an injunction to recover their possession of the rental property.

Denise Gorrell draws upon her extensive knowledge of restaurants and the wine industry to inform her real property and commercial law practice. She helps hospitality industry clients navigate complex, important issues such as business formation, real estate agreements, trademarks, OLCC rules and other governmental regulations.