Martinek Paul J.

Accounting firms, law firms and other third-party vendors to corporations can breathe a sigh of relief these days, thanks to a recent federal appeals court decision that such vendors can’t be held liable in civil suits as “primary violators” of securities laws if they had only tangential involvement in an alleged fraud. Federal law states […]

The U.S. Supreme Court will hear its second securities case of the term this week, when it considers whether companies can appeal a federal judge’s decision to send a securities fraud class action to state court if the case doesn’t fall within the Securities Litigation Uniform Standards Act—the very law meant to force most securities […]

Ask a corporate executive to define the Foreign Corrupt Practices Act, and most will state the obvious: it outlaws bribery to foreign officials when doing business overseas. In reality, thanks to some uncompromising provisions of the FCPA, mundane books-and-records mistakes are much more likely to put a company in the crosshairs of an enforcement action. […]

A unanimous U.S. Supreme Court last week slammed the door shut on state class action suits by shareholders who claim that they held on to a security—but didn’t purchase or sell it—as a result of a fraudulent statement. Plaintiffs’ lawyers had argued that the Securities Litigation Uniform Standards Act of 1998, which bars state class […]

Escalating opposition to government demands that corporations waive the attorney-client privilege or risk being labeled “uncooperative” may be starting to make headway, experts tell Compliance Week. The Securities and Exchange Commission and the Department of Justice have been roundly criticized by groups as diverse as the U.S. Chamber of Commerce, the criminal defense bar and […]

Good enterprise risk management starts with effective detection of risks and early disclosure of the material ones. But determining which risks are material and at what point disclosure is required or advisable is often a judgment call—which means that even the best ERM scheme won’t thwart litigation when a stock price tumbles and angry investors […]

A federal judge in New York recently became the first to squarely rule that the Securities and Exchange Commission cannot hold a corporate officer or director liable for assisting in securities fraud if the person didn’t have “actual knowledge” of the wrongdoing. Griesa The SEC has taken the position that individual officers and directors face […]

In a case that again shows the difficulties the Securities and Exchange Commission faces in distributing legal settlements to aggrieved shareholders, the Commission recently asked a judge to let a $250 million settlement with Qwest Communications be disbursed by a private distribution agent, rather than the Fair Fund system created by the Sarbanes-Oxley Act. The […]