Enlarging Scope of Disaster Plans
November 28, 2005
Considering how much damage can result from something as innocuous as a faulty sprinkler system, it may be understandable that many law firm disaster planners previously gave their first attention to common threats, and then never got around to considering large-scale disasters. Firm planners could pat themselves on the back if they maintained proper fire safeguards, kept the firm properly insured, arranged for regular backups of key data files, and the like.
Building a State-of-the-Art Anti-Bribery Program
November 28, 2005
Anti-bribery laws have serious consequences for ordinary companies doing business internationally. Violations come to light during routine M&A due diligence, when competitors complain or employees blow the whistle, or when companies voluntarily disclose as a part of their Sarbanes-Oxley reporting obligations. When they do come to light, strong internal controls may shield executives from some liability and restore confidence amongst shareholders and regulators.
Compliance Hotline
November 28, 2005
Recent rulings of importance to you and your practice.
First Decision to Directly Address the Right to Enforce
November 28, 2005
On Sept. 27, 2005, the United States District Court for the Eastern District of Pennsylvania was the first federal court to address whether private plaintiffs have the right to sue under Section 304 of the Sarbanes-Oxley Act of 2002 (SOX). U.S. District Judge Stewart Dalzell concluded that Section 304 "does not provide a private right of action for shareholders to file a derivative suit." <i>Neer v. Pelino</i>, No. 04-4791, 2005 WL 2434685 (E.D. Pa. Sept. 27, 2005). Accordingly, only the Securities and Exchange Commission (SEC) may bring an action to enforce Section 304.
Quarterly State Compliance Review
November 28, 2005
All corporations and other statutory business entities must comply with the provisions of their home states' corporation or other business entity law. These laws are constantly being amended by the legislatures and interpreted by the courts. This edition of the Quarterly State Compliance Review will look at some amendments to business entity laws that went into effect during the last three months and will review some court cases interpreting these statutes that were decided during that period.
Statements During Settlement Negotiations As Evidence in a Criminal Trial
November 28, 2005
Your client, a corporate executive, is being investigated in connection with whether the stock of her employer was artificially inflated. The company is in a "full cooperation mode" with the SEC and the DOJ, and is negotiating the terms of a consent decree. You learn that the company's attorneys have met with DOJ and SEC attorneys and have admitted (as they felt was necessary to maintain credibility) to certain wrongdoing by various corporate employees. Can the company's statements during negotiations be used against your client, or are they protected by Rule 408 Fed. R. Evid.?
Multiple Jeopardy
November 28, 2005
A combination of factors has coalesced to spell trouble, or at least unwelcome complications, for federal prosecutors and aspiring cooperators and their counsel in the white-collar criminal arena. The factors include the political ambitions of state attorneys general (AGs), the broad overlap of state and federal financial-fraud crimes, the fully justified emphasis of federal prosecutors on pursuing nationwide financial-fraud offenses, and the persistence of the federal courts in refusing to limit the outmoded "dual sovereignty" doctrine that allows concurrent or consecutive federal and state prosecutions for the same offenses.
In the Courts
November 28, 2005
Recent rulings of importance to you and your practice.
Cooperating with NYSE Member Reviews
November 28, 2005
The framework that prosecutors and regulators use to assess a corporation's response to corporate wrongdoing changed forever on June 16, 1999. That day, then-Deputy Attorney General Eric Holder announced DOJ's new principles for the prosecution of corporations. The so-called Holder Memorandum emphasized cooperation with prosecutors and the requirement that corporations make full and voluntary disclosure of wrongdoing if they hoped to avoid or mitigate prosecution. The twin themes of cooperation and disclosure have become the standards by which federal and state prosecutors and regulators now judge a corporation's response to instances of corporate misbehavior.
