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Falling Stock Prices?
Open any major newspaper over the last few months and you will find a surprising number of articles detailing the significant drop in a public company's stock price in mere hours or days after the disclosure that the company has been civilly sued, be it a class action, securities fraud case, or harassment suit. The decline in a company's stock price following the disclosure of a pending lawsuit is not by any means new. Yet, the speed and extent of the decline in a company's stock appears to have greatly accelerated in recent years. As a result, public companies are now faced with a growing number of lawsuits geared principally at obtaining a speedy settlement by leveraging the lawsuit's potential impact on a company's stock value.
The common strategy centers on drafting complaints in an inflammatory way to create a threat of substantial negative publicity aimed at driving stock prices down. These complaints are often sent to the company in draft form with a request to mediate the dispute and a unilateral promise to keep the allegations confidential for a short period of time in an attempt to force a speedy settlement. Under a more aggressive variation of this approach, the complaint is filed under seal with the filing providing a significant privilege against defamation to plaintiff's counsel. Companies are then left with the Hobesian choice of proceeding with litigation and fighting the allegations contained in the draft complaint or settling with a plaintiff before the lawsuit has even been filed. This article briefly examines the costs and benefits of each approach.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.