Agencies
The law Congress passes to create an agency and set its powers; think of it as the agency’s “birth certificate.”
What is enabling legislation?
A product is advertised at an amazing low price, but in the store it’s “sold out” and you’re pushed toward a pricier item.
What is bait-and-switch advertising?
Using your property in a way that unreasonably interferes with others, like a smoky factory or a smelly pig farm.
What is a nuisance?
The only two campus coffee shops agree to charge $6 for every latte. This is the name for that practice.
What is price-fixing?
The main independent regulatory agency that interprets and enforces federal securities laws.
What is the SEC (Securities and Exchange Commission)?
Legislatures make statutes. When an agency like the FDA issues a rule on food labels, it is creating this kind of law.
What is administrative law?
An ad is deceptive if it would mislead this person, not just whether someone happened to believe it.
Who is a reasonable consumer?
This federal agency is the main enforcer behind the Clean Air Act, the Clean Water Act and the Toxic Substances Control Act.
What is the EPA (Environmental Protection Agency)?
Any agreement or combination that reduces competition. It’s the problem; antitrust laws are the solution.
What is a restraint of trade?
A fraud in which “returns” are paid with new investors’ money, not real profits. It collapses when new money stops coming in.
What is a Ponzi scheme?
This agency stops unfair and deceptive trade practices and would handle a misleading TV ad.
What is the FTC (Federal Trade Commission)?
This federal act protects against contaminated and misbranded food and drugs.
What is the Federal Food, Drug, and Cosmetic Act (FDCA)?
The power company runs lines across your backyard. It holds this right to use your land.
What is an easement?
The power to control the market price of a product. An extreme amount of it is monopoly power.
What is market power?
Trading on important information the public doesn’t have. It’s banned because it gives an unfair edge, and it applies to anyone, not just executives.
What is insider trading?
This official is the agency’s in-house trial judge: administers oaths, takes testimony, rules on evidence and makes determinations of fact.
What is an administrative law judge (ALJ)?
Under this act, a debt collector can’t contact you at work if your employer objects.
What is the Fair Debt Collection Practices Act (FDCPA)?
A quarry pays you to haul away rock from your land. It holds this right to take part of the land or its products.
What is a profit?
This section of the Sherman Act bans one firm from getting or keeping monopoly power through unfair means, including attempts to monopolize.
What is Section 2 of the Sherman Act?
Passed after the Enron scandal, this law requires executives to certify financial reports and imposes harsh penalties if they’re false.
What is the Sarbanes-Oxley Act?
Created after the 2008 financial crash, this council identifies and responds to emerging risks in the financial system.
What is the FSOC (Financial Stability Oversight Council)?
You lend your roommate $500 at interest. This disclosure law, carried out by Regulation Z, does NOT apply because you don’t lend in the ordinary course of business.
What is the Truth-in-Lending Act (TILA)?
Under this act, the EPA can require testing of a new chemical’s health effects before use, and can ban one posing an imminent hazard.
What is the Toxic Substances Control Act (TSCA)?
Price-fixing and dividing markets are so harmful they are illegal this way, with no excuse accepted.
What is per se illegal?
This four-part test asks: Did you invest money, in a common enterprise, expecting profits, from the efforts of others?
What is the Howey test (for an investment contract)?