When the Massachusetts Secretary of State’s Office this year announced an investigation into the $57 billion sale of Gillette to Procter & Gamble, state officials zeroed in on the minutes of a meeting by Gillette’s board of directors in which the sale was discussed. “There’s no evidence of extensive deliberations,” Massachusetts Secretary of State William […]
Martinek Paul J.
Posted inRegulatory Enforcement
JPMorgan Chase Faced With SOX Whistleblower Complaint
JPMorgan Chase is defending a claim that it violated Section 806 of the Sarbanes-Oxley Act, which protects individuals who report conduct that might constitute a violation of securities laws or rules of the Securities and Exchange Commission. The giant financial services firm received a letter in May from the Occupational Safety and Health Administration—which enforces […]
Posted inFrom the Archive
Sales Tax Initiative An Opportunity To Review Systems
Anew initiative to streamline the collection of sales and use taxes provides an incentive for companies to review their tax-collection systems, and to consider whether they should take advantage of amnesty provisions being offered by participating states as of Oct 1. The Streamlined Sales and Use Tax Agreement is a set of guidelines to which […]
Posted inFrom the Archive
Judge: Only SEC Can Force Disgorgement Under SOX 304
Individual shareholders can’t sue under Section 304 of the Sarbanes-Oxley Act seeking disgorgement of executive compensation. That’s according to a federal judge, who ruled last week that only the Securities and Exchange Commission has the power to enforce SOX 304. Dalzell In the first decision in the country to squarely address the question of whether […]
Posted inFrom the Archive
Reg. G Update: Effect Is Felt Despite Lack Of Enforcement
Two-and-a-half years after its adoption by the Securities and Exchange Commission, Regulation G—which limits the manner in which companies can use non-GAAP figures—hasn’t resulted in a single enforcement action. But that shouldn’t be construed to mean that the rule isn’t working, experts tell Compliance Week. Nash “This regulation is an example of a regulatory success,” […]
Posted inBoards & Shareholders
SEC Looking Into Retaliation Against Analysts
The Securities and Exchange Commission is looking into the practice of companies retaliating against research analysts who provide negative reports. “The Commission staff has been reviewing this matter and is currently considering several possible solutions for recommendation,” Chairman Christopher Cox wrote in a Sept. 1 letter to U.S. Sen. Ron Wyden (D-Ore.). Wyden had written […]
Posted inTechnology
Investment Advisers Want SEC To Clarify Email Obligations
As a securities broker, Morgan Stanley, which is facing a possible $10 million fine from the Securities and Exchange Commission for failing to keep certain email (see related coverage at right), is subject to tougher record-retention requirements under the Securities Exchange Act than other public companies. Similarly, investment advisers also have enhanced obligations under the […]
Posted inRegulatory Enforcement
Threat Of Morgan Stanley Fine Highlights Perils Of Email
Reports this month that the Securities and Exchange Commission is threatening to fine Morgan Stanley more than $10 million for failing to keep certain email highlights the perils that exist for companies that fail to manage electronic communications properly. Yelton The risks that organizations face when it comes to email retention—or failing to have and […]
Posted inRegulatory Enforcement
Case Serves As Reminder On Attorney-Client Privilege
Arecent ruling by a federal appeals court provides a pointed reminder to companies that they need to be careful when conducting investigations to ensure that they don’t give up the flexibility to fully cooperate with regulators and prosecutors. Although it has become commonplace for companies to agree to cooperate with government investigators, that pledge can […]
Posted inRegulatory Enforcement
Court Rebukes SEC’s Enforcement Of Regulation FD
Afederal judge in New York has issued the first rebuke of the Securities and Exchange Commission’s efforts to enforce Regulation Fair Disclosure—which bars U.S. companies from selectively disclosing to securities analysts material information that has not been made available to the public. Under “Reg. FD,” an issuer making an intentional disclosure of material, nonpublic information […]