The clock is now ticking on the “Katie Couric” rule. The Securities and Exchange Commission formally published its proposed revision of the rule—which would require companies to disclose the compensation of certain highly paid non-executive employees—at the end of last week. Corporate America now has six weeks to comment on the proposal before the SEC […]
Martinek Paul J.
Posted inBoards & Shareholders
Parsing Counsel’s Duties At Closely Held Cos.
Although the principle that a corporation’s lawyer represents the company rather than the individuals who own or run the company is well-established, lawyers for small, closely held companies sometimes face challenges in determining whether they also have any fiduciary obligations to shareholders. Ennico Clifford Ennico, a former Wall Street lawyer who now represents small companies, […]
Posted inRegulatory Enforcement
Pain In The Class: CAFA Boosts Legal Costs
More than a year after its enactment, the Class Action Fairness Act has largely succeeded in forcing potentially costly class actions out of state courts and into federal courts—but procedural battles over keeping litigation in the federal system have made defending such cases more expensive, at least for the time being. “CAFA has raised the […]
Posted inInternal Controls
Sifting Through New e-Discovery Technology
New federal rules governing electronic discovery take effect Dec. 1, leaving corporations scant time to evaluate and implement any technology or procedures to help handle looming new standards of producing electronic records in litigation. The biggest change: Companies must be prepared to address e-discovery issues immediately after a suit is filed. Under the new rules, […]
Posted inRegulatory Enforcement
New IT Risk: Not Monitoring Computer Use
Most savvy corporations already have strict policies about what employees can and cannot do at their workplace computers, but the stakes for not enforcing those policies and properly investigating misuse are rising. In one recent case from New Jersey, a company was sued by the victim of child pornography that a worker had on his […]
Posted inRegulatory Enforcement
Sounding Out The Bounds Of Whistleblowing
Maybe whistleblowing isn’t that painful on corporate ears after all. Four years after Congress enacted Sarbanes-Oxley and established Section 806—which protects employees from retaliation if they raise complaints about a company’s compliance with securities law—legal experts say the whistleblower provision can be a nuisance, especially when workers abuse its protections. Overall, however, as court cases […]
Posted inRegulatory Enforcement
‘Selective Waiver’ Idea Faces An Uphill Road
The battle over whether companies that agree to turn over documents to the government have waived all attorney-client and work-product privileges seems to be turning from the courts to Congress. Last month, the 10th Circuit Court of Appeals in Denver became the latest appellate court to reject a company’s arguments—in this case, Qwest Communications—that privileges […]
Posted inRegulatory Enforcement
Investigations: Start Strong, Or Finish Weak
No executive wants an investigation into wrongdoing at his company to end poorly. The key to avoiding that fate, legal specialists say, is to be sure the company’s own internal investigation starts strongly. If done properly, an internal investigation “can go a long way to persuading the government that a company should not be prosecuted,” […]
Posted inFrom the Archive
No Easy Options On Backdating Lawsuits
First came the probes of backdated stock option grants. Now come the lawsuits—dozens of them already, with many more inevitably on the way. Winning those lawsuits, however, will be no easy task for shareholder activists and hungry plaintiff lawyers. Among the challenges they face: proving actual damages, getting around statutes of limitations, and showing that […]
Posted inRegulatory Enforcement
Key Victory For Execs On Legal Bills; Thompson Memo Hit
In a first-of-its-kind decision sure to please executives under investigation everywhere, a federal judge has slapped down prosecutors for pressuring KPMG to cut off legal support to 16 employees indicted for selling illegal tax shelters. In a New York federal court, Judge Lewis Kaplan said that KPMG refused to pay its employees’ legal bills “because […]