Sarbanes Oxley And The Non-Public Subsidiary: A Non-Sequitur?
By now, corporate counselors are well acquainted with the fact that the Sarbanes-Oxley Act (SOX) and its whistleblower protections apply to publicly traded companies. What is less well known is that the Sarbanes-Oxley whistleblower protections can also apply to non-public subsidiaries of publicly traded companies. Although the Department of Labor Administrative Review Board noted that it has not addressed the issue at the appellate level, a number of OSHA Administrative Law Judges (who hear SOX whistleblower cases at the trial level) have done so, and their decisions uniformly hold that SOX <i>can</i> protect the employees of <i>non-public subsidiaries</i> of publicly traded companies under certain circumstances. Those decisions also provide practical guidance for corporate counselors who want to limit SOX coverage strictly to the publicly-traded parent.
Litigation Budgeting: No Crystal Ball Required
Litigation may be simply one of the costs of doing business, but it's no secret that the difficulty in predicting those costs adds to the frustration in corporate legal departments. Concerns about costs and how to control or predict them weave their way throughout a survey of corporate litigation trends commissioned for the second consecutive year by Fulbright & Jaworski L.L.P., and conducted by an independent research firm. This article discusses one of the most effective, yet surprisingly underutilized tools for managing litigation costs: the litigation budget from outside counsel.
Voluntary Waiver At The Barrel Of A Gun
The federal government is no friend to the attorney-client privilege. That's just simply a fact. Perhaps no other factor lately has applied greater pressure on the privilege than the government's practice of insisting on waiver of the privilege as an indication of cooperation. Certainly other agencies have gotten into the act, but the Justice Department and the Securities and Exchange Commission (SEC) lead the charge in requiring corporate investigation targets to sacrifice confidentiality for the benefits of cooperation. <br>But for the corporate target, the immediate and practical implications of a government-demanded waiver are serious. A party's decision to waive the privilege can have significant consequences, not the least of which may be the inability to assert the privilege in downstream or parallel litigation that so often accompanies a government investigation.
FAS 140 Transfers Exposure Draft: A Primer for Structured Finance
In the world of corporate finance, a large segment of debt capital traditionally has been raised by issuing secured debt. In structured finance transactions, by contrast, money is raised by selling financial assets, such as mortgage loans, leases, auto loans or student loans, to a separate special purpose entity (an "SPE"), that often is a subsidiary of the seller, and causing that entity to issue securities backed by those financial assets.
IP Transfer and Pricing Considerations for Financial Service Firms
Financial service companies make their money primarily through two core intellectual assets. The first is their expert knowledge of ways to create, expose, tranche and protect asset value. The second is their ability to project their expertise as embodied in their brand. Aside from the specialized intellectual asset merchant banks, financial service companies do not know how to value their knowledge nor their brand. Furthermore, historically they have not paid much attention to which of their global affiliates created the intellectual asset nor which of their affiliates deployed the asset — an activity that creates the accounting and financing phenomenon of "transfer pricing." The importance, more specifically the urgency, in rectifying this informational vacuum arises from recent changes in international tax law pertaining to the pricing of intangible assets that are transferred among Multinational Entity ("MNE") affiliates. This article, targeting the financial service industry, briefly summarizes the fears of the industry concerning transfer pricing and intellectual property ("IP"); cites an example of a recent innovation that has led to a revolution in the way bonds are priced identifying possible IP transfer pricing red flags; and concludes with suggestions for process improvements.
Leading Questions And Child Witnesses
Last month, in the first part of this article, we discussed the case law of both state and federal courts with regard to the admissibility of child testimony and the suggestibility of child witnesses. The conclusion of this article discusses whether the child witness understands that he or she can affect the outcome of the litigation, as well as other issues related to the reliability of the child's testimony.
Insolvent Malpractice Insurers Leave Everyone Holding the Bag
Whether you represent the patient or physician in a medical malpractice case, there are always significant repercussions when the physician's malpractice carrier becomes insolvent. Naturally, plaintiffs in such cases are concerned as to whether and how a judgment will be paid. Physicians are just as concerned that they may be personally responsible for some portion of a judgment. With a growing number of medical malpractice insurance carriers facing difficult financial times nationwide, parties are experiencing those concerns with increasing frequency.
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Confidential Client Communications? Maybe Not
Former SEC Chairman William H. Donaldson noted in a March 5, 2004 speech that SOX was needed to deal with "a general erosion of standards of <i>integrity and ethics</i> in the corporate and financial world ... The acquiescence by the gatekeepers, like accountants, who turned their backs or actually condoned such accounting manipulation, combined with stock option incentives to management, fueled the short-term focus." (emphasis added).) Ironically, the SEC and the Department of Justice, which enforce SOX's criminal provisions, appear ready to burden the traditional ethical obligations of corporate legal counselors to keep client communications confidential in an effort to police the integrity and ethics of other corporate gatekeepers. To that end, the SEC imposes certain reporting requirements on corporate counselors, attempts to preempt state ethics rules, and DOJ prosecutors routinely pressure "target" corporations to waive the attorney-client privilege to obtain "cooperation" points. Corporate counselors must be aware of those initiatives to properly balance their competing obligations.
