Litigation

Third-Party Litigation Financing: Bane or Boon?

February 07, 2012

Litigation funding, where financial firms back lawsuits in hopes of sharing in the monetary settlement or verdict, is on the rise. That's bad news for corporate legal departments that could see an increase in litigation. But there's a silver lining; it could help companies move some litigation off their balance sheet to free up capital, says Maya Steinitz, an associate professor at the University of Iowa College of Law.
 

More FCPA Defendants Opting for Trials Over Settlements

January 10, 2012

Defendants in Foreign Corrupt Practices Act cases are increasingly opting to fight the Department of Justice in court rather than agreeing to prepackaged settlements, and more of them are winning. "For so many years, FCPA enforcement rarely saw the inside of a courtroom. Thankfully, that is beginning to change," says Mike Koehler, a law professor at Butler University.
 

Business Litigation: A Look Into 2012

January 03, 2012

A volatile market, a tough regulatory environment, and enforcement actions against big banks will dominate business litigation in 2012, with many lawsuits targeting the financial services industry. As long as banks keep dropping "bombshells," they will continue to be "piñatas for shareholder lawsuits," says Michael Stocker, partner at law firm Labaton Sucharow. More inside.
 

Conducting Investigations in Executive Compensation

December 20, 2011

In response to pressure from investors, proxy advisory firms, and the public to curb excessive executive pay practices, many companies added new pay policies and rules. Now they have the task of ensuring that everyone abides by them—and violations of executive compensation rules often lead to difficult and sensitive internal investigations. Some tips on conducting them are inside.
 

Beware Compliance Pitfalls When Recruiting on Social Media Sites

December 13, 2011

More companies are using social media sites like LinkedIn to search for potential job candidates. While there's nothing inherently problematic about the strategy, companies need to be careful, since those sites often provide sensitive personal information. "Employers should be careful not to make decisions based on some information obtained via social media," says Susan Gross Sholinsky of law firm Epstein Becker Green.
 

Mobile Computing Raises New e-Discovery Challenges

December 13, 2011

More employees are accessing sensitive company data on mobile gadgets, such as smartphones and tablets, and many of them are doing it on their personal devices. This new reality is creating e-discovery challenges, since it makes it harder for companies to quickly produce required data. "To get to that data, they need to have it in an easily accessible place," says Philip Favro, a discovery attorney at IT security company Symantec.
 

How Corporate Facebook Pages Can Raise Compliance Risks

December 13, 2011

When members of the public post comments on the Facebook pages of companies, especially those in the pharmaceutical industry, it could expose those companies to compliance risks. Until recently, Facebook gave companies in that industry an exemption and disabled public comments. But it has now reversed that decision, meaning some companies are forced to weigh the benefits of a Facebook presence against the potential compliance risks. Details inside.
 

Building a Robust Compliance Program in a University Setting

October 25, 2011

Clark Atlanta University's effort to build a compliance program started in 2005 like many others: with a mandate from the Justice Department. But being among the first universities ever to receive such marching orders, it had few models to follow—so the school took inspiration from corporate best practices, and built a comprehensive compliance program that, says chief compliance officer Robert Clark, "continues to mature and evolve."
 

Landmark Ruling Limits SROs' Authority to Collect Fines

October 25, 2011

A recent federal appeals court ruling that halted the Financial Industry Regulatory Authority's power to collect old disciplinary fines via lawsuit has effectively called into question the power all self-regulatory organizations have in enforcing fines through court action. The verdict may not have much practical effect, experts say, but it does clip SROs' wings in a way rarely seen. More inside.
 

Asbestos-Related Filings Decline

August 11, 2011

Corporate litigation departments can breathe easier these days: The asbestos-related lawsuits that have flooded courts for years finally seem to be receding. That being said, plenty of businesses—especially insurers—still face long periods of liability and large reserves for future settlements. Details inside.
 

Supreme Court Splits Decisions on Two Securities Cases

June 28, 2011

Corporate America and shareholder activists have split two recent decisions from the U.S. Supreme Court about class-action lawsuits. One ruling could clear the path for shareholders to bring class actions without first demonstrating causation of losses; the other could shield companies from lawsuits based on the actions of their affiliates. Details inside.
 

Say-on-Pay Failures; Say-on-Pay Strategies

June 14, 2011

Companies that fail to win say-on-pay votes with shareholders this year—31 of them out of thousands at last count—now face another problem: shareholders suing the directors for disregarding their will. In truth, the lawsuits probably have little merit, experts say. But they do point to how companies might better deal with unhappy shareholders. More inside.
 

Delaware Judge Sides With Board on Merger Case

June 14, 2011

In one of the more peculiar and complex corporate governance cases in recent memory, the Delaware Chancery Court has ruled that Massey Energy's board can proceed with a sale of the company despite a web of conflicts of interest in the transaction. The ruling could provide directors with an escape hatch from derivative litigation against them. Details inside.
 

Supreme Court Strikes a Blow to Class-Action Lawsuits

May 10, 2011

Good news for the legal department: The U.S. Supreme Court has ruled that companies can indeed force customers to settle disputes via arbitration rather than class-action lawsuits, and contracts saying so are valid. The decision could chill consumer class actions and complicate securities and employment class-action cases. Details inside.
 

Supreme Court Answers Materiality Issue

April 12, 2011

The Supreme Court ruled that a company must still disclose information that may not be "statistically significant," if a reasonable investor would likely find it to be material. While the decision matters most to medical companies, it serves as a warning to all to "err on the side of disclosure if there is any question," says Peter Stokes of law firm Fulbright & Jaworski. Details inside.
 

Controversial Proxy Access Rule Gets Its Day in Court

April 05, 2011

The Chamber of Commerce and the Business Roundtable made their best case last week for rescinding the Dodd-Frank Act's SEC proxy access rule in a federal appeals court. The rule, on hold since October, would allow shareholders with at least 3 percent of a company to nominate directors on the proxy.
 

SEC Stays Proxy Access Rule Amid Questions on Validity

October 05, 2010

Corporate America can breathe a sigh of relief—at least for now. The Securities and Exchange Commission has stayed its controversial proxy access rule until a court rules on a petition to have the rule thrown out.The surprise SEC move came in response to a Sept. 29 petition filed by the...
 

Hewlett-Packard: When They Make the Movie...

September 08, 2010

Eternally great character actor John Heard was pretty much born to play the role of ex-CEO Mark Hurd, don't you think?My prediction is that this sorry drama will either end up as a biopic movie running evenings on CNBC after the market closes, or be in the inspiration for some...
 

PwC Study Shows Lull in Securities Class-Action Filings

April 06, 2010

Companies faced fewer federal securities class action lawsuits in 2009, but they shouldn't necessarily expect that trend to continue in the year ahead.That's one of the takeaways from a report by PricewaterhouseCoopers detailing securities class-action lawsuit filings and settlements for 2009.Overall, the total number of federal securities class-action lawsuits filed...
 

Just in From the Revolving Door File...

January 16, 2010

You may have missed it among the orgy of SEC enforcement news this week, but over at the U.S. attorney’s office in Manhattan, the lead prosecutor of the Galleon Group insider-trading case is quitting—to start his own practice in white-collar defense.Joshua Klein, an assistant attorney in the Southern District of...
 

Survey: Companies Bracing for Litigation Wave

October 19, 2009

Companies are bracing for a litigation wave in the coming year, according to a survey of 408 corporate counsels.According to Fulbright & Jaworksi's Annual Litigation Trends Survey Report, 83 percent of U.S. respondents said new litigation has been commenced against their companies in the past year, and 42 percent anticipate...
 

News From the HR (Human Rights) Department...

June 09, 2009

Compliance headaches have gone global this week, from Nigeria to China.First, Royal/Dutch Shell finally blinked and settled a civil lawsuit against the company about to start in New York. Relatives of Ken Saro-Wiwa, a Nigerian civil-rights activist hanged by authorities there in 1995, had sued Shell under the U.S. Alien...
 

SOX Lawsuit Keeps Refusing to Die

November 19, 2008

From the I'd-rather-watch-paint-dry department: That conservative outfit still arguing that the Sarbanes-Oxley Act is unconstitutional has, yet again, lost a court dispute and vowed to appeal. Earlier this week, the U.S. Court of Appeals for Washington, D.C., voted 5-4 not to review the case, which argues that the structure of the...
 

What Attorney General Eric Holder Means to You

November 19, 2008

Corporate America had its first glimpse into the Obama Administration’s thinking yesterday with the news that Eric Holder, a partner at the law firm of Covington and Burling, will be nominated to be our next attorney general. Sure, we’re still in the rumor phase of this news, but the Obama...
 

More Who-Gets-Screwed Bailout News

October 02, 2008

Behind every spectacular corporate meltdown, there's an auditing firm sweating bullets.Little surprise, then, that when the entire financial sector melts down, all four of the Big 4 auditing firms start to sweat. Each one has (or had) at least several clients in the financial sector that have recently been forced...
 

SOX For Institutional Investors? Disclosures Under Oath

September 24, 2008

Compliance Week Editor-in-Chief Matt Kelly is in China. This blog posted by Compliance Week Publisher Scott Cohen:Regulatory developments in the financial services sector are coming fast and furious, but one caused us to raise our eyebrows. On Monday, the SEC expanded its investigation of potential market manipulation, noting that hedge...
 

Naked Short Selling Banned at All Public Companies

September 17, 2008

Compliance Week Editor-in-Chief Matt Kelly is in China. This blog posted by Compliance Week Publisher Scott Cohen:Perfectly timed with my blog from yesterday accusing the SEC of inaction in the financial crisis, the Commission has banned “naked” short selling of the securities of all public companies, effective 12:01 a.m. Thursday,...
 

SEC Still Pursuing Disgorgement, D&O Bars

September 16, 2008

Compliance Week Editor-in-Chief Matt Kelly is in China. This entry posted by Compliance Week Publisher Scott Cohen: If there was any doubt that that the Commission is serious about disgorging profits from executives charged with fraud, one need only look to the latest settlement with former KB Home CEO Bruce Karatz.Karatz,...
 

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Deloitte is conducting their annual Look Before You Leap: Managing Risks in Global Investments survey to better understand the approaches companies are taking to address compliance and integrity-related risks in emerging markets. 

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