Author: Kelly McElroy

How Connecticut NIL Agents Get Paid

Posted on by Kelly McElroy

With the rise of Name, Image, and Likeness (NIL) opportunities for student-athletes in Connecticut, the role of NIL agents has become increasingly important. These agents help athletes navigate endorsement deals, sponsorships, and other business ventures. However, many student-athletes and their families may wonder how NIL agents get paid in Connecticut and what rules govern these relationships.

Commission-Based Compensation

NIL agents in Connecticut typically earn a commission-based fee for their services, which means they receive a percentage of the compensation their clients (the student-athletes) earn from NIL deals. The exact percentage varies but commonly ranges between 10% to 20% of the athlete’s earnings from an endorsement or sponsorship agreement. These commissions are typically outlined in the contract between the athlete and the agent.

No Compensation for Athletic Performance

Connecticut law makes a clear distinction between NIL deals and compensation tied to athletic performance. NIL agents are not allowed to facilitate deals that pay athletes for their on-field or on-court performance. The agent’s earnings must be solely tied to the athlete’s commercial use of their name, image, or likeness.

Transparency and Disclosure

Under Connecticut’s NIL rules, both the athlete and the agent are required to fully disclose their relationship and any deals they enter into to the athlete’s educational institution. This ensures that there are no conflicts with existing sponsorships the school may have and that the school can confirm the legitimacy of the deals.

Additional Expenses

In addition to commission fees, NIL agents may also charge athletes for other business-related expenses. These can include legal services (e.g., contract review), marketing, and public relations. However, these expenses must be clearly outlined in the contract, and athletes should be fully aware of any additional fees they might incur.

Registered and Certified Agents

In Connecticut, it’s crucial that student-athletes work with licensed and registered agents who adhere to state laws and NCAA guidelines. Connecticut law requires that agents act in the best interests of their clients, providing fair representation and protecting the athlete from exploitative practices. Student-athletes and their families should vet their potential agents carefully to ensure compliance with state and NCAA regulations.

The Bottom Line

NIL agents in Connecticut typically get paid through commissions on the deals they negotiate for their clients. These arrangements provide agents with an incentive to secure the best possible endorsements for their athletes while ensuring that all agreements comply with both state law and NCAA guidelines. Athletes should carefully review agent contracts, fully understand the compensation structure, and ensure transparency to protect their interests.

For student-athletes in Connecticut, understanding how NIL agents are compensated is a crucial part of making informed decisions in this evolving landscape.

Ripple Labs Inc. Ordered to Pay $125 Million for Unregistered Token Sales

Posted on by Kelly McElroy

 On August 7, SDNY Judge Analisa Torres ordered Ripple Labs Inc. (“Ripple”) to pay $125 million and enjoined Ripple from future violations of securities laws. This high-profile ruling addressed the SEC’s motion for remedies and entry of judgment on Ripple’s Section 5 violations, stemming from the 2020 lawsuit regarding unregistered sales of Ripple’s XRP token. In 2023, Judge Torres found that the token only qualified as a security when sold to institutional investors, a significant ruling in applying securities laws to digital assets. In this week’s ruling, the Court reinforced the gravity of the violation while still noting that there were no allegations of intentional wrongdoing or fraud by Ripple.

The civil penalty falls far short of the $2 billion penalty requested by the SEC. The SEC’s request for disgorgement was also denied, as the Court found that institutional investors did not suffer direct monetary harm as a result of the unregistered sales relying on the Supreme Court’s decision in Liu v. SEC and the Second Circuit’s decision in SEC v. Govil clarifying the meaning of “victims.”[1] The penalty does exceed the $10 million fine requested by Ripple; however, Judge Torres noted that “there is no question that [Ripple’s] recurrent, highly lucrative violation of Section 5 is a serious offense.” Further, the Court issued a permanent injunction on the basis that Ripple’s “willingness to push the boundaries” of the Court’s previous Order demonstrated a reasonable probability of future violations. Still, Ripple has characterized the ruling as a victory.

 

To read more: https://www.law360.com/capitalmarkets/articles/1867540/ripple-ordered-to-pay-125m-penalty-in-sec-case

To read our analysis of the 2023 Order: https://www.pastore.net/s-d-n-y-issues-ruling-regarding-cryptocurrency-regulation-the-ripple-effect/

[1] Liu v. SEC, 591 U.S. 71 (2020); SEC v. Govil, 86 F.4th 89 (2d Cir. 2023).

Pastore Successfully Defends Client in SEC Inquiry: No Charges Brought

Posted on by Kelly McElroy

Pastore LLC successfully persuaded the SEC not to bring charges against a former senior executive of a publicly traded national retail chain. Pastore represented the client throughout the SEC’s fact-finding inquiry into possible securities violation by the retail company. Pastore attorneys Paul May and Tyler Rutherford defended the SEC OTR in New York. At the conclusion of the inquiry, the SEC indicated that they would not be recommending an enforcement action against the client.

Pastore has attorneys formerly affiliated with firms such as Kelley Drye & Warren LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Skadden, Arps, Slate, Meagher & Flom LLP, and Mayer Brown, as well as the SEC and NYSE, and has a thriving securities industry practice.

Pastore Successfully Defends Grievance Complaint Arising From Algorithmic Securities Trading Platform

Posted on by Kelly McElroy

Pastore LLC represented an attorney and hedge fund manager in a disciplinary hearing related an algorithmic securities trading platform and sophisticated investment transactions. The client was accused of fraud and breach of contract, resulting in arbitration before the American Arbitration Association. Following the arbitration, the matter was brought before the State Grievance Committee in Connecticut for potential discipline, including disbarment. After lengthy proceedings, the State Grievance Committee’s reviewing committee declined to impose any discipline against Pastore’s client.

Pastore has attorneys formerly affiliated with firms such as Kelley Drye & Warren LLP, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Skadden, Arps, Slate, Meagher & Flom LLP, and Mayer Brown, as well as the SEC and NYSE, and has a thriving securities industry practice.

Tyler W. Rutherford appointed to the Securities Litigation Committee of the New York City Bar Association

Posted on by Kelly McElroy

Pastore LLC congratulates Tyler W. Rutherford on his recent appointment to the Securities Litigation Committee of the New York City Bar Association, where he will serve a three-year term alongside esteemed members of the Bar. He has been a frequent author on sophisticated securities related issues.

Pastore Wins Jurisdictional Dispute in Corporate Governance Action

Posted on by Kelly McElroy

Pastore has successfully obtained jurisdiction over the CEO of an national logistics company in a dispute between founders of the company. The CEO had previously claimed that service was improper over him in Connecticut and that there was no personal jurisdiction over him within the state despite owning property in Connecticut and the fact that the company was founded in Connecticut. Pastore’s client, a shareholder and founder, was successful in overcoming that argument. Pastore client’s claims exceed $50 Million, alleging that the logistics company has failed to honor his rights as a shareholder and employee. The company, which also owns a large share of Attabotics, a Canadian logistics company, has recently engaged in a series of corporate transactions which may be subject to judicial review.

Pastore Retained in Two New SEC Matters

Posted on by Kelly McElroy

Pastore LLC has been retained in two separate SEC matters. One matter is an appeal to the Second Circuit arising from an SEC civil action that seeks disgorgement due to alleged false statements under 15 U.S.C. § 78u(d)(5). Another involves an SEC investigation into a publicly traded retail store. Pastore has a thriving securities practice and has attorneys who have previously worked for SEC enforcement and the NYSE.

Legal Challenges for Fitness Influencers

Posted on by Kelly McElroy

As a fitness influencer, the journey to stardom on social media is as challenging as it is exciting. Understanding the legal landscape is crucial in safeguarding your interests and ensuring your career thrives amidst the dynamic demands of content creation and brand collaborations. Here are key insights to help you navigate these challenges:

  • Understanding Contracts: When partnering with brands, clear and comprehensive contracts are vital. These agreements ensure that both parties’ expectations and obligations are explicitly outlined, helping to prevent misunderstandings and disputes.
  • Intellectual Property Awareness: Your content is not just a reflection of your creativity but also a crucial business asset. Protecting your copyrights and trademarks is essential to maintaining control over your work and reinforcing your brand’s value in the marketplace.
  • Regulatory Compliance: Adhering to guidelines set by entities like the FTC and respecting platform-specific rules are foundational to building trust with your audience. Transparent disclosure of sponsored content and conscientious privacy practices are not just good ethics—they’re good for business.
  • Risk Management: Proactively identifying and addressing potential legal issues before they escalate can save you from future headaches. Understanding common pitfalls in the influencer industry can help you navigate smoothly and confidently.

By focusing on these core areas, you can build a more secure and successful career in the fast-evolving world of social media. For those seeking deeper dives into specific topics or facing unique challenges, consulting with a legal expert who understands the nuances of the influencer industry can be invaluable.

Remember, the path to success is best navigated with knowledge and preparedness. Equip yourself with the right information and support to continue inspiring your followers and achieving your business goals.

Legal Essentials for Fitness Influencers: Navigating the Complexities

Posted on by Kelly McElroy

In the rapidly expanding world of fitness influencers, understanding and adhering to legal standards is crucial. As influencers transition from fitness enthusiasts to public figures, their legal needs become more intricate and vital to their continued success and brand integrity.

Intellectual Property Rights. Fitness influencers often create unique workout routines, slogans, and branded content. Protecting this intellectual property is essential to maintain exclusivity and leverage for monetization. Registering trademarks for brand names or catchphrases can safeguard an influencer’s business assets.

Contract Law. Influencers frequently engage with brands for endorsements and sponsorships. It is important to understand the terms and conditions of these contracts thoroughly. This includes compensation, deliverables, the scope of work, and termination clauses. Professional legal advice can prevent potential conflicts and ensure fair agreements.

Disclosure and Compliance. Influencers must comply with the advertising guidelines set by regulatory bodies such as the Federal Trade Commission (FTC) in the U.S. This includes clearly disclosing any partnerships or sponsorships in their posts to maintain transparency with their audience. Non-compliance can lead to hefty fines and a tarnished reputation.

Liability Issues. Offering fitness advice online can be tricky. Without proper disclaimers, influencers might be held liable for any injuries or damages that occur from followers attempting their routines. It is advisable to clearly state that content is for informational purposes only and not a substitute for professional medical advice.

The intersection of fitness and law may seem overwhelming, but it is indispensable for influencers aiming to build sustainable and compliant brands. Consulting with legal professionals who specialize in digital media and entertainment law can provide the necessary guidance to navigate these waters smoothly.

For fitness influencers, the digital stage is fraught with potential legal issues, but with the right knowledge and support, they can continue to inspire and engage responsibly and profitably.

Resolving Partnership Disputes in the Fitness Industry

Posted on by Kelly McElroy

In the dynamic fitness industry, partnership disputes can emerge from differences in business vision, management styles, or financial expectations. Effectively resolving these disputes is critical for maintaining the operational health of any fitness business. Here’s how disputes can be navigated through legal strategies:

Negotiating Operating Agreements and Shareholder Agreements

The foundation for preventing and resolving disputes lies in well-crafted operating agreements for LLCs and shareholder agreements for corporations. These documents act as a blueprint for business operations, detailing the distribution of profits and losses, management duties, and dispute resolution mechanisms. Clearly defined rights and responsibilities, coupled with clauses like buyout options or decision-making processes, help mitigate conflicts before they escalate.

Mediation

Mediation is a preferred strategy for its efficiency and its focus on preserving professional relationships. This process involves a neutral third party who assists the disputing partners in finding a mutually satisfactory resolution. Mediation is informal, cost-effective, and quicker than traditional legal processes, making it ideal for resolving disputes while maintaining ongoing professional relationships within the fitness community.

Litigation

While often seen as a last resort due to its public nature and potential costs, litigation is sometimes necessary to resolve deep-rooted disputes decisively. For those in the fitness industry facing such scenarios, engaging with a specialized firm like Pastore LLC can provide the expertise needed to navigate complex legal landscapes. With extensive experience in litigation, Pastore LLC offers robust representation, ensuring that clients’ interests are effectively protected and advanced in court.

Arbitration

Similar to litigation but conducted outside of court, arbitration involves resolving disputes through an arbitrator or a panel. It is generally quicker than court proceedings and can be kept confidential, which helps protect the business’s reputation. Many agreements in the fitness industry might mandate arbitration as the method for dispute resolution, emphasizing its role in efficient conflict resolution.

Effective handling of disputes in the fitness industry requires a combination of proactive agreement drafting and strategic use of resolution methods. Whether through mediation or litigation, it is important to address conflicts swiftly and effectively. Firms like Pastore LLC play a crucial role for those needing to pursue litigation, providing expert guidance and representation that aligns with the best interests of the business. In every case, working with legal professionals adept in these areas can help safeguard the longevity and success of your fitness enterprise.