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Ninth Circuit Rules on SEC
On March 22, 2005, an en banc panel of the United States Court of Appeals for the Ninth Circuit, in a 10-to-1 decision, interpreted the bounds of Section 1103 of the Sarbanes-Oxley Act of 2002 (SOX), 15 U.S.C. ' 78u-3(c)(3). Section 1103 gives the Securities and Exchange Commission (SEC) the ability to petition a federal district court for a temporary 45-day freeze (which can be extended up to an additional 45 days) on any “extraordinary payments” likely to be made to corporate executives, employees or insiders of a company under investigation by the SEC.
The decision, SEC v. Gemstar-TV Guide Int'l, Inc., et al., No. 03-56129 (9th Cir., March 22, 2005), which held that more than $37.6 million in payments made to Gemstar-TV Guide International, Inc.'s ex-CEO and ex-CFO were extraordinary payments under Section 1103, is unusual because it reversed an initial determination by a three-judge Ninth Circuit panel. Additionally, the decision is the first, and currently only, judicial opinion on the meaning of “extraordinary payments” under Section 1103, and therefore sets out a standard on which all future payments to executives or other employees made while a company is under investigation may be judged.
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.
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.
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.