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Settlements

How Individuals Can Win Non-Prosecution Agreements With the SEC

Jaclyn Jaeger April 10, 2012

The SEC announced a landmark non-prosecution agreement last month, declining to prosecute a person (rather than a corporation) after he provided significant assistance during an investigation. The agency also issued guidance on how to win such credit. But rather than give executives a pathway to their own personal NPA, the guidelines illustrate just how difficult it will be to earn such a pass. More details inside.

How BizJet Convinced the Justice Department to Go Easy

Jaclyn Jaeger March 27, 2012

After aviation maintenance company BizJet uncovered potential Foreign Corrupt Practices Act violations, the company reacted swiftly, launching an internal investigation and notifying the Justice Department. The actions earned the company goodwill for "extraordinary cooperation," and a 30 percent reduction in its FCPA fines. More details inside.

Big Compliance Burdens Coming for Mortgage Industry

Jaclyn Jaeger February 28, 2012

The mortgage industry faces a host of new compliance challenges thanks to the $25 billion settlement reached with state and federal regulators this month, and expect no easy path to success. "Very little of this is able to be dealt with through automation," says Robert Bostrom of the law firm SNR Denton. "The whole point of this is to require human contact." Full details inside.

Dealing With JV Compliance Takes Varsity Skills

Todd Neff February 22, 2012

A recent Justice Department FCPA settlement against a participant in an energy joint venture in Nigeria is yet another reminder of how challenging ethics and compliance can be in such arrangements. "The average JV hasn't been around a long time. It probably doesn't have a compliance officer; it doesn't have a lot of processes," says lawyer Jeff Kaplan. A close look at how to establish strong conduct at "JVs" is inside.

If the SEC Forces Companies to Admit Guilt ...

Jaclyn Jaeger February 14, 2012

The SEC has been under pressure for a while to change its policy of allowing defendants to settle charges without admitting guilt, and now a court could force its hand on the issue. A policy change would have dire consequences for companies, since it would set up a difficult decision to admit guilt or to fight lengthy court battles with the SEC. More details inside.

FTC Scrutinizing Information-Sharing Agreements

Jaclyn Jaeger February 14, 2012

A recent FTC enforcement action against three businesses for collusion via an industry trade association is sounding alarm bells, since the practice is so common. A consent decree with one of the businesses even overturns established safe-harbor practices. "This should be of interest to any company involved in competitor information exchanges," says Kathryn Fenton of law firm Jones Day.

2012 Will Be Another Busy Year in Regulation and Compliance

Reese Darragh January 03, 2012

Amid holiday cheers and winter chills, legal experts say 2012 will be yet another busy year in regulation. Inside, we take a look at what's next for the SEC's Office of the Whistleblower, rulemaking under the Dodd-Frank Act, insider trading enforcement, and more.

SciClone Raises Standards, and Eyebrows, With FCPA Deal

Jaclyn Jaeger November 29, 2011

SciClone Pharmaceuticals, a middle-weight drug development business with only 260 employees, struck a memorable blow for corporate compliance this month: The company agreed to profound changes in its anti-corruption program solely to settle a shareholder lawsuit. "I'm not aware of any other case, certainly in the FCPA area, where this sort of result has occurred," says Lucinda Low of the law firm Steptoe & Johnson.

SEC Settlement Gives Insight on Internal Control Requirements

Jaclyn Jaeger November 08, 2011

A settlement between stock exchange Direct Edge and the Securities and Exchange Commission reveals some of the SEC's latest thinking on proper internal controls. The agency accused the company of failing to invest adequately in its systems and processes, and of lacking proper backup and failover systems. As part of the settlement, Direct Edge agreed to hire a chief compliance officer who reports directly to the CEO.

'Price Reduction Clauses' Raise False Claims Act Perils

Jaclyn Jaeger October 18, 2011

A $200 million False Claims Act settlement Oracle reached with the federal government is yet another reminder of compliance perils when selling complex products to Uncle Sam. At issue is the price-reduction clause, which requires contractors to offer the lowest price given to other comparable customers. In industries where pricing isn't always transparent, compliance is no easy task.

FTC Accuses Companies of 'Unreasonable' Data Security Programs

Arielle Bikard May 04, 2011

The Federal Trade Commission has charged two companies with failing to keep their customers' data secure. Among the charges are that the firms did not implement reasonable data security procedures and that they failed to follow their own data security policies.

Google Settles Landmark Data Privacy Case

Jaclyn Jaeger April 26, 2011

In a first-of-its-kind settlement, Google has agreed to establish a comprehensive privacy program after running afoul of safe-harbor rules that govern the collection and use of consumer information. "This is the most far-reaching, broadest FTC action on privacy to date," says Sharon Goott Nissim, consumer privacy counsel at the Electronic Privacy Information Center.

Compliance Officer Pays $15,000 in SEC Settlement

Arielle Bikard April 07, 2011

The SEC has charged three former brokerage executives, including the former chief compliance officer, with failure to keep customer information confidential. This is the first time the SEC has brought financial penalties against individuals on the basis of its "safeguard rule." The CCO agreed to pay $15,000 without admitting or denying guilt.

Class-Action Settlements Down, but Not for Long

Jaclyn Jaeger March 22, 2011

The number of settlements of class-action securities cases declined to a 10-year low in 2010. But corporate counsels may have little to celebrate. The dollar figure of those settlements was on the rise, and attorneys say the decline in cases won't last. "We're going to see an uptick in settlements," predicts Brian Pastuszenski of Goodwin Procter.

Beazer CEO Returns $6.5M to Settle SEC Clawback Suit

Melissa Klein Aguilar March 04, 2011

Ian McCarthy, the chief executive officer of Atlanta-based homebuilder Beazer Homes, will pay back $6.5 million in bonus pay and stock profits to settle an SEC complaint brought against him under the clawback provision of the Sarbanes-Oxley Act. It is the latest settlement against an executive who wasn't charged in the fraud that prompted the clawback.

Takeaway From Facebook Settlement: More Complaints, Scrutiny

Melissa Aguilar February 09, 2011

American Medical Response reached a settlement with the National Labor Relations Board over a case that involved an employee who was fired for comments made on Facebook. Now many companies are reviewing their blogging and Internet policies and could see more scrutiny of policies that limit employee use of social media.

False Claims Act Settlements Serve as Reminder on Pricing

Melissa Aguilar September 09, 2010

Recent settlements of allegations brought under the False Claims Act of defective pricing serve as a reminder to companies doing business with the government to tighten up their procedures around pricing.Cisco Systems and Westcon Group North America agreed to pay $48 million to settle claims they made misrepresentations to the...

SEC Settlements Up in First Half, Driven by Individuals

Melissa Aguilar June 04, 2010

The uptick in Securities and Exchange Commission settlements continued during the first half of the year-much of it due to settlements with individuals.According to data tracked by NERA Economic Consulting, the SEC settled with 354 defendants in the first half of 2010, compared with 328 in the second half of...

PwC Study Shows Lull in Securities Class-Action Filings

Melissa Aguilar 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...

SEC Q1 Settlements Up, Monetary Payments Down

Melissa Aguilar March 03, 2010

The Securities and Exchange Commission had an unusually busy first fiscal quarter, but collected monetary payments in fewer cases than normal.That's according to a NERA Economic Consulting report detailing Q1 SEC Settlements Trends, which shows that the commission settled with 205 defendants in its first quarter of fiscal year 2010,...

NERA: 2009 SEC Settlements Hit Post-SOX Low

Melissa Aguilar December 08, 2009

For the second consecutive year, the number of Securities and Exchange Commission settlements declined in fiscal 2009, representing the lowest number of settling defendants since the Sarbanes-Oxley Act was implemented in 2002.The SEC also saw fewer settlements for the third quarter, according to the latest data tracked by NERA Economic...

Securities Litigation Filings Slower So Far for 2009

Melissa Aguilar November 13, 2009

Following a fairly busy year for plaintiffs in 2008, federal securities class-action filings are down so far this year, according to an analysis by PricewaterhouseCoopers.Overall, 113 cases were filed through Sept. 30, down 25 percent compared to the same period in 2008. If that trend continues, the total number of...

NERA: SEC Settlements Values Remain High

Melissa Aguilar August 10, 2009

Corporate and white-collar defendants wondering what the cost of settling a Securities and Exchange Commission enforcement action is these days should take note—it isn't cheap.That's according to the latest research by NERA Economic Consulting, which shows that the median value of SEC settlements for both companies and individuals in 2009...

SEC Finalizes $30 Billion in ARS Settlements...Kind Of

Bruce Carton December 11, 2008

The SEC announced today (click here) that it has finalized settlements with Citigroup Global Markets, Inc. and UBS Securities LLC and UBS Financial Services, Inc. that will provide nearly $30 billion to tens of thousands of customers who invested in auction rate securities before the market for those securities froze...

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