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, […]
Regulatory Enforcement
Posted inRegulatory Enforcement
SEC Publishes Guidelines For Companies On Fines
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 […]
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 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 inAccounting & Auditing
DoJ Moves To Dismiss Indictment Of Arthur Andersen
The government dropped its prosecution of defunct Enron Corp. auditor Arthur Andersen, closing the door on one of the cases that helped spur the ongoing war on corporate fraud and the resulting sweeping governance reforms. In a Nov. 22 filing with the 5th Circuit Court of Appeals, federal prosecutors moved to dismiss the indictment of […]
Posted inRegulatory Enforcement
Electronic Discovery Proposal Influencing Judges
The U.S. Judicial Conference recently took an important step toward addressing electronic discovery issues by approving proposed amendments to the Federal Rule of Civil Procedure that will force e-discovery issues to be addressed early in the litigation process and protect companies from having to dig up data that is not reasonably accessible. Although the amendments […]
Posted inRegulatory Enforcement
Backdating Of Stock Options Remains Under Scrutiny
Heightened regulatory scrutiny of improperly backdating stock option grants shows no signs of abating. That’s amid reports of ongoing Securities and Exchange Commission investigations at several companies, and news of a tentative settlement by Analog Devices. Cagney As reported by Compliance Week in July, a number of companies—including software company Mercury Interactive Corp.—have been under […]
Posted inRegulatory Enforcement
Ineffective Compliance Program Violates False Claims Act?
In a closely watched case, the U.S. government is for the first time arguing that an ineffective compliance program could be enough to constitute a violation of the False Claims Act—the federal law that imposes liability for knowingly submitting to the government a false or fraudulent claim for payment. Shepard The suit, against Merck-Medco Managed […]