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Willingness to Limit SOX Application?
On May 12, 2004, the U.S. Court of Appeals for the Ninth Circuit issued its opinion in Securities and Exchange Commission v. Yuen et al., No. 09-56129, D.C. No. CV-03-03124-MRP (9th Cir. May 12, 2004), the first appellate holding under Sarbanes-Oxley. The Sarbanes-Oxley legislation, enacted in 2002 (as Public Law No. 107-204), was designed to strengthen corporate governance of publicly traded companies in the wake of recent corporate accounting and fraud scandals. Sarbanes-Oxley (SOX) represents the most far-reaching corporate governance and securities law reform since enactment of the first federal securities laws in the 1930s, and has given a variety of new tools to enforcement agencies. The Yuen decision suggests, however, that the courts might not defer to enforcement agencies' interpretation of the statute, especially where no implementing regulations have been enacted.
The Case
Yuen involved the Securities and Exchange Commission's (SEC) authority under Section 1103 of Sarbanes-Oxley, 15 U.S.C. ' 78u-3, which permits the SEC to seek a temporary court order placing so-called “extraordinary payments” into an escrow account whenever, during the course of an investigation involving possible violations of the securities laws by an issuer or any of its directors, officers, partners, controlling persons, agents, or employees, it appears likely that the issuer will make such payments to any of those persons. Although the legislative history suggests that the purpose of Section 1103 was to prevent the dissipation of corporate assets while a company is under investigation, Section 1103 does not define “extraordinary payments.” The lack of any statutory definition suggested that the SEC would have considerable latitude to freeze payments under Section 1103. Section 1103 also raised particular concerns that severance or termination agreements with management or employees, even though negotiated at arms' length, could be effectively undone by the SEC. The language of Section 1103 appears to cover payments in an even broader range of contexts, however, potentially even including payments made to “agents” in the context of an investigation under the Foreign Corrupt Practices Act. See 15 U.S.C. '' 78m; 78dd-1. (The Foreign Corrupt Practices Act (FCPA) prohibits issuers (as well as other U.S. persons) from corruptly paying, offering or promising to pay, or authorizing the payment of money or anything of value to any foreign official in order to obtain or retain business. The FCPA also includes accounting provisions, applicable to issuers, with respect to books and records and internal accounting controls. The SEC and the Department of Justice have overlapping authority to enforce the FPCA; the SEC has authority with respect to civil violations committed by issuers).
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.