Regulatory Enforcement

In what is believed to be the first case of its kind, an Indiana manufacturer settled charges with the Securities and Exchange Commission earlier this month that poor internal controls led to five years of sloppy accounting and a restatement that nicked company financial reports by $16 million. The Feb. 9 settlement with Cummins Inc., […]

The Sarbanes-Oxley Act has long wrapped up executives in a cloak of frustration. Now a high-powered legal challenge to the Public Company Accounting Oversight Board wants to unravel the whole thing. At issue is the very constitutionality of the PCAOB, and whether it wields so much influence over public commerce that its members should be […]

The Securities and Exchange Commission may need to reconsider how it coordinates investigations with the Department of Justice in light of a recent decision by a federal judge throwing out criminal securities fraud charges due to the too-cozy relationship between the SEC and DOJ. Judge Ancer Haggerty of the U.S. District Court in Oregon wrote […]

A recent Delaware Chancery Court decision raises questions about several well-established merger transaction procedures that prior court rulings had viewed favorably. In the case, In re TeleCommunications Inc. Shareholders Litigation, the court allowed a challenge to a 1998 merger between TCI and an AT&T subsidiary to go to trial, citing “genuine issues” about whether the […]

Securities law streaked across the stage of the U.S. Supreme Court earlier this month, as lawyers argued in front of the justices about whether certain state securities-fraud class action suits are still valid despite a 1998 federal law intended to curb such disputes at the state level. The case, Merrill Lynch v. Dabit, is the […]

A federal appeals court has sounded the first sour note for overseas employees who blow the whistle on corporate fraud: The Sarbanes-Oxley Act does not protect them from retaliation. Earlier this month, the 1st Circuit Court of Appeals ruled that a citizen of Argentina who worked for a subsidiary of U.S.-based Boston Scientific Corp. could […]

T hree recent federal court decisions have sent a sharp reminder that corporate directors and officers must all hang together figuratively—or insurers might force them to all hang together legally. In all three cases, one person’s false statement invalidated director and officer insurance protecting everyone else on the board. The decisions underscore the need for […]

Has Corporate America finally cleaned up its act? The number of class-action shareholder lawsuits filed last year fell to only 176, a 17 percent drop from 2004 and well below average for the last decade, according to a new report from Stanford Law School and Cornerstone Research. Investor losses related to these lawsuits decreased by […]

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, […]

The Securities and Exchange Commission kicked off 2006 with a public declaration of its standards for levying fines on public companies that violate securities laws. But while the SEC said the move aims to set out objective standards that it will use in levying penalties, some experts say the guidelines may not actually offer companies […]