10b5-1 Plan Abuse
August 29, 2007
The latest hot topic in corporate executive abuses may be manipulation of trades under prearranged trading plans established pursuant to Rule 10b5-1. Little has been said about the red flags that could indicate abuse of 10b5-1 plans. This article attempts to offer some practical guidance to corporate counsel to ensure that their 10b5-1 plans steer clear of SEC enforcement scrutiny.
Pensions and Restitution
August 29, 2007
Being a white-collar defendant is very expensive. Just the cost of putting up a serious defense is more than most business executives can bear, and whether companies must pay their ex-employees' legal fees has been hotly litigated in the much discussed KPMG tax shelter case in the Southern District of New York. Meanwhile, an important <i>en banc</i> decision of the Ninth Circuit addresses the financial impact on individuals at the other end of the criminal process: whether pension trust funds may be reached to satisfy a criminal judgment of restitution.
Rita v. U.S.
August 29, 2007
Two-and-a-half years ago, the Supreme Court ruled in the remedial portion of its bifurcated decision in U.S. v. Booker, 543 U.S. 220 (2005), that the system of federal Sentencing Guidelines established by the Sentencing Reform Act of 1984 could pass constitutional muster only if the Guidelines were treated as having advisory, rather than mandatory, effect. But Booker left open the question of how much weight the now advisory Guidelines should henceforth be given in a district court's sentencing calculus. Last November, the Supreme Court granted writs of certiorari in two cases ' <i>Rita v. United States</i>, and <i>Claiborne v. United States</i>, that seemed likely to resolve this question.
'Swift' Prosecutions of Corporations and Executives
August 29, 2007
Last month, the Department of Justice (DOJ) celebrated the five-year anniversary of the Corporate Fraud Task Force with a press release and a party at which then-Attorney General Alberto Gonzales, in a prepared statement, hailed significant changes in the way white-collar cases have been prosecuted. Gonzales praised the Task Force's role in breaking 'large investigations into smaller, less complex pieces,' and bringing those cases faster. But expedited investigations mixed with quick charging decisions have not been a reliable recipe for success.
On the Move
August 29, 2007
Who's doing what; who's going where.
The Supreme Court Speaks in Marrama
August 29, 2007
With its Feb. 21, 2007 holding in <i>Marrama v. Citizens Bank of Massachusetts</i>, 127 S. Ct. 1105 (2007), the Supreme Court stepped in to resolve a Circuit Court split concerning a debtor's right to convert a Chapter 7 case to a Chapter 13 case under the Bankruptcy Code, pursuant to ' 706(a) of the Code. On its face, ' 706(a) seems clear ' a debtor has an absolute, one-time right to conversion. Such clarity is, in the Supreme Court's view, hazy at best.
Bankruptcy Rule 2019
August 29, 2007
Bankruptcy court procedural rulings typically go unnoticed. However, this year two bankruptcy court rulings regarding procedural disclosure requirements potentially applicable to investors participating in the bankruptcy process have caused quite a stir. Both rulings related to the scope of disclosure mandated by Bankruptcy Rule 2019, which applies to 'committees' and 'entities' that represent more than one creditor in a bankruptcy case.
Bidders Beware
August 29, 2007
The aggregate value of private equity acquisitions worldwide in 2006 exceeded $660 billion. If this number seems mind-boggling, consider that this record-breaking volume of transactions appears well on the way to being eclipsed in 2007. Even with corporate financing for leveraged buyouts harder to come by as a consequence of the sub-prime mortgage fallout, there is, by some estimates, $300 billion sitting globally in private-equity funds.
Cases of Note
August 28, 2007
Ninth Circuit Vitiates Online Contract Arbitration Clause
Californian Can Be Sued in NJ for Alleged Libel on Internet
August 28, 2007
New Jersey's long-arm jurisdiction over Internet disputes just got a little longer. A New Jersey state appeals court ruled in July that a California resident accused of making libelous statements in a Web-based forum can be sued in New Jersey because the material was 'targeted' toward a New Jersey audience.
