Compliance Hotline
October 31, 2005
Recent rulings of importance to you and your practice.
Discount Stock Options As Deferred Compensation
October 31, 2005
Recent legislation has heralded a dramatic shift in the United States federal income tax treatment of nonqualified deferred compensation arrangements. One of the potentially more far-reaching aspects of the legislation is its effect on individuals who receive certain non-statutory stock options for their services. This article focuses on the circumstances under which the Act treats compensatory stock op-tions as nonqualified deferred compensation for federal income tax purposes, the consequences of such treatment, and the resulting practical considerations in dealing with the treatment of certain stock options as nonqualified deferred compensation.
Money Laundering Compliance Examinations
October 31, 2005
Last month, we pointed out that for money-laundering compliance officers, a classic Bob Dylan song offers a word of sound advice: "You better start swimming or you'll sink like a stone, for the times they are a-changin'." We said that the biggest change financial institutions face is the new, expanded-scope anti-money laundering (AML) regulatory examination, and the proliferation of Written Agreements, Memoranda of Understanding, or Cease and Desist Orders issued by bank regulatory agencies should the financial institution be found to be deficient. We explained that bank regulators are focused on multiple issues: Commitment to AML, SARS (suspicious activity reporting and detection) and Risk Ranking. In this article, we discuss the fourth concern: Policies and Procedures.
Focus on the Fringes
October 31, 2005
The IRS has just published proposed regulations seeking to clarify the interrelationship between the requirements for tax-exempt status and the imposition of intermediate sanctions. This against the backdrop of the Senate Finance Committee hearings on Charitable Organizations, the Committee staff's recommendations for legislative reform (published earlier this year), and the more recently published Final Report of the Panel on the Nonprofit Sector. This article assumes the reader's general familiarity with the above developments, and focuses on the developments' immediate impact regarding executive compensation paid to the executives of exempt organizations. Special attention is paid to the IRS's newly proposed intermediate sanction regulations as applied within the context of the so-called "excess benefit" rules.
Managing Digital Risk
October 31, 2005
Few areas of information security are as misunderstood, or as critical to understand and employ, as digital risk management. Some organizations see it as an information technology (IT)-only issue. Others view risk management as relevant to everything but IT. <br>But the truth is that digital risk management is one of the most important components of an effective information-security program. For many industries, including the legal profession, digital risk management is also an integral part of a business' strategy aimed at enabling revenue while reducing risk for clients and law firms. <br>And, for organizations involved in e-commerce, digital risk management can make the difference between futility and fortune.
e-Meetings: The Same As, And Different From, Traditional Meetings
October 31, 2005
e-Meetings have the same Constitutional protections and require lawyers to take the same precautions to preserve associated privilege as they must in traditional meetings. It is important then for counsel advising e-businesses and those conducting e-meetings to note ' and for those participating in them ' that e-meetings impose the same ethics requirements for confidentiality that traditional meetings do. <br>But the ethereal nature of e-meetings can induce in participants and counsel a false sensation of security, which is something to guard against. This false sense of security is erroneously based on the belief that the Internet hides identity, and that because of that, confidentiality perhaps needn't be a concern.
Use e-Billing Or Lose Business
October 31, 2005
Today, the vast majority of the top 200 U.S. law firms are sending electronic invoices to one or more clients. Many work with four or more e-billing vendors, depending on the client demands. Electronic billing can provide significant value to the firm and to its clients, but it is absolutely imperative to align corporate client e-billing goals with law-firm participation and vendor functionality. With proper alignment and support, e-billing is a powerful tool that strengthens the relationship between the attorney and client.
Board Tech Committees Mean Business
October 31, 2005
In today's information-driven society, businesses rely heavily on technology and knowledge. Because of that, just as corporate boards have long relied on committees to focus on such key areas as audit and finance, many have come to establish a tech committee as well. But does the average corporate board member understand today's technology well enough to serve competently on a tech committee? Indeed, should directors even try to provide guidance on technology issues, when the state of the art changes from day to day?
