A blue-ribbon commission created by the National Association of Corporate Directors has published comprehensive new guidelines to help directors do their jobs, and encourages them to be more aggressive in exercising their business judgment when facing tough issues. The report, chaired by the former chief justice of the Delaware Supreme Court, also makes three broad […]
Martinek Paul J.
Posted inFrom the Archive
E.U. Privacy Rules Complicate U.S. Compliance Efforts
American companies that do business in the European Union need to be aware of—and comply with—Europe’s strict rules for transferring personal data to the United States. Under a decade-old “Privacy Directive,” personal data transfers from the E.U. to outside countries must be given “adequate protection.” That includes protecting privacy, as well as other rights considered […]
Posted inFrom the Archive
Proposal Creates ‘Roach Motel’ Exit For Foreign Issuers
The Securities and Exchange Commission has proposed rules that would make it easier for foreign companies to shed the grasp of U.S. securities laws and regulators. Under existing rules, a foreign company is still subject to SEC oversight and the Securities Exchange Act even if it has delisted from American exchanges as long as it […]
Posted inRegulatory Enforcement
Refco Collapse Spotlights Trend Of Targeting Lawyers
Federal regulators and plaintiffs’ lawyers are reportedly setting their sights on a prominent Chicago law firm responsible for the loan documents that allegedly allowed the former CEO of the commodities trading firm Refco to hide hundreds of millions in customer losses. Wycoff The possible implication of the venerable law firm, Mayer Brown Rowe & Maw, […]
Posted inRegulatory Enforcement
Court Threatens “Internal Affairs Doctrine”
California-based companies beware: An appeals court in that state has held that California’s plaintiff-friendly insider trading law can be applied to a company that is incorporated in Delaware. Typically, a principle called the “internal affairs doctrine” protects companies in California that are incorporated elsewhere from being subjected to the Golden State’s securities laws. The theory […]
Posted inData Privacy
FTC Enforcement Raises Questions On Data Security
The Federal Trade Commission seems to be stepping up enforcement activity against companies that don’t safeguard customer data, and has heightened expectations for how that data must be protected. Until recently, the FTC only targeted companies that had broken promises they had made regarding data security, notes Deborah Birnbach, a partner with the law firm […]
Posted inFrom the Archive
Some IPOs Embrace Transparency, Go Beyond SOX
Although all public companies have been forced to become much more transparent by the Sarbanes-Oxley Act, some IPOs appear to be embracing that transparency, going “above and beyond” the openness required of them by SOX. That’s due to both cultural and legal issues; Sarbanes-Oxley has required enormous change for public companies—but for newly public companies, […]
Posted inRegulatory Enforcement
Reliance On “Creative Lawyering” Was Willful Violation
A federal appeals court recently issued a potentially troubling decision for corporations and their attorneys when it ruled that two insurance companies willfully failed to comply with a federal law protecting consumers from misuse of credit information despite reliance on advice by counsel that the original trial judge in the case said was legally correct. […]
Posted inRegulatory Enforcement
SEC Brings First Action Enforcing Insider Loan Ban
The Securities and Exchange Commission this month brought its first enforcement action under the vision of the Sarbanes-Oxley Act that bans public companies from making loans to their executives. On Dec. 1, the Commission filed and simultaneously settled an action against the former CEO and CFO of Stelmar Shipping, a freight company based in Greece […]
Posted inBoards & Shareholders
Court Reverses SEC’s Harsh Director Penalties
Afederal appeals court has rebuked the Securities and Exchange Commission for imposing severe civil penalties under the Sarbanes-Oxley Act on a company’s directors for engaging in market manipulation and making false statements. The court said that the Commission failed to show that the directors’ conduct “created a significant risk of substantial loss to other persons,” […]
