Tag:Disclosures
Caffeine Can Cause a Scene: Why the FDA Should Require Disclosure of Caffeine Content
On May 7, 2024, Panera Bread removed its popular line of ‘charged’ lemonade beverages from its menu following multiple lawsuits alleging that the caffeine content of the drink led to death or serious health problems of customers. One such death occurred in September 2022 when a 21-year-old woman unknowingly consumed 390 milligrams of caffeine in one charged lemonade drink which aggravated her heart condition and led to cardiac arrest. These lawsuits highlight the dangerous reality of caffeine consumption which likely could have been avoided if Panera Bread had clearly displayed the caffeine content of its drinks. However, Panera Bread was under no regulatory obligation to display the caffeine content due to a major gap in the current beverage labeling regulation from the Food and Drug Administration (FDA) which does not require any disclosure of caffeine quantity. This regulatory gap poses a growing risk to consumers as new energy drink brands continue to enter the market and push competition by increasing the amount of caffeine packed into each product. In order to fulfill its obligation to public safety, the FDA must introduce regulations to standardize the disclosure of caffeine content to allow consumers to make informed decisions about the products they are choosing.
FINRA Targets High-Risk Brokerage Firms With New Rule
For several years, the Financial Industry Regulatory Authority (FINRA) has sought to increase oversight of brokers who have a history of misconduct as well as the firms that hire these brokers. In an effort to disincentivize the recruitment of high-risk brokers, the Securities and Exchange Commission (SEC) recently approved FINRA’s proposed Rule 4111, which subjects “restricted firms” to additional capital obligations and hiring restrictions. Specifically, FINRA Rule 4111 targets brokerage firms that have exceeded thresholds of risk-related or investor-harming disclosures compared to similarly sized peers. The new rule, which will go into effect in 2022, is designed to provide FINRA with greater authority to proactively address the risks posed to investors by rogue brokerage firms.
Updates to Autorenewal Regulations and Enforcement
In the age of online consumerism, many companies utilize automatic renewal programs to deliver their products and services to customers on a recurring basis for a monthly or annual charge. Recently, autorenewal programs have seen an increase in consumer protection through legislation at both the state and federal level along with enforcement actions brought by private plaintiffs, state attorney generals, and the Federal Trade Commission (“FTC”). Organizations that utilize automatic renewal should be aware of the uptick in autorenewal program enforcement and look to strengthen and update their policies where appropriate.
Securities and Exchange Commission Issues Statement Regarding Climate Change Disclosures
One of President Joe Biden’s promises to America if elected President of the United States was to be more proactive to fix the increasing issue of climate change. Previously, during his tenure as Vice President, in 2010 disclosures were mandated by the Securities and Exchange Commission (SEC) that ordered publicly traded companies disclose their climate change related data in their filings to help investors make more informed decisions. More than ten years later, and only a month after President Biden’s inauguration, the SEC released a statement regarding their intentions to revise these disclosure requirements and bring a greater focus to investment decision regarding climate change issues.