Ethics and Compliance Programs
A recurrent task facing Managers of Ethics and Compliance programs is to make sure their programs are effective -- and demonstrate this effectiveness to both internal and external audiences.
Does Your Corporate Governance Rate?
Why are companies and their boards, more than ever, aiming to assure investors of their commitment to best corporate governance practices? Significant new mandates by the SEC and stock exchanges regarding disclosure, governance, and accounting procedures are the legacy of Tyco, Enron, WorldCom, etc. Also, corporate governance issues have become matters of regular media reports and new publications focused on governance. Once passive institutional and retail shareholders have become increasingly vocal and successful on shareholder ballots. There is also an increasing amount of empirical data to support the position that better governance correlates to better shareholder value.
Introduction
Special Issue: As we all know, as a result of widespread accounting scandals in 2001-02, Congress passed the Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 769 (2002) (SOX). SOX, signed into law on July 30, 2002, authorizes substantially increased funding for the United States Securities and Exchange Commission, creates broad new SEC enforcement powers, a greater range and magnitude of civil and criminal penalties, several new criminal prohibitions and more rigorous reporting requirements among other things.
Special Issue: Securities Enforcement Actions After SOX
The Securities and Exchange Commission (SEC) was created by Congress in the aftermath of the 1929 stock market crash, the cause of which was widely attributed to fraudulent and deceptive practices on Wall Street. It is an independent regulatory agency whose five commissioners, including a Chairman, are appointed by the President. The SEC's Division of Enforcement is the "police force" of the Commission; it is responsible for the civil and administrative enforcement of the various federal securities laws. The Enforcement Division also typically works closely with U.S. Attorney's Offices throughout the country to assist with the criminal prosecution of securities violations.
How Blakely Affects Sentencing in Tax Cases
Ever since the Supreme Court rendered its landmark decision in the case of <i>Blakely v. Washington</i>, lawyers and judges have been cast in the role of prognosticators, trying to predict how the courts -- most importantly the Supreme Court itself -- will apply <i>Blakely</i> to the Federal Sentencing Guidelines. We will soon know the answer, as the Supreme Court has agreed to hear arguments on Oct. 4, 2004, after expedited briefing. Until then, however, lawyers must prognosticate -- at the risk of guessing wrong.
The Cost of Cooperation
Cooperation with government investigators has long been important for companies under the specter of an investigation. Under current agency policies and practices of the Securities and Exchange Commission (SEC) and U.S. Department of Justice (DOJ), and relevant provisions of the Sentencing Guidelines for Organizational Offenders, a "cooperative" corporation can realize substantial reductions in penalties or even avoid an enforcement action altogether. Seaboard Corporation in 2001 and HomeStore, Inc. in 2002 are excellent examples -- both were able to avoid SEC enforcement actions because of the extent and nature of their cooperation with investigators. The multi-million dollar question is what will be defined as "cooperation."
Prosecutions for Violation of Export Controls on Dual-Use Items
Since 9/11, the government has stepped up the enforcement of laws and regulations relating to the control of exports, especially so-called "dual-use" items that have both military and non-military applications. Department of Commerce policy "seeks to keep terrorists and other criminals from possessing sensitive technologies -- in essence, to prevent export violations before they occur," according to Julie L. Myers, Assistant Secretary of Commerce for Export Enforcement.
Are Lawyers' Invoices Privileged Communications?
Lawyers' billing invoices are not privileged attorney-client communications and must be produced when subpoenaed in a civil contempt hearing, the Pennsylvania Superior Court ruled in late September in a dispute over a guardian ad litem's fee request.
