Regulatory Enforcement

Delaware corporations may have an easier time defeating requests from hedge funds and others to crack open their books prior to litigation, thanks to a recent decision from the Delaware Chancery Court. Section 220 of Delaware’s corporate code allows shareholders to demand access to books and records if there is a “proper purpose.” Hedge funds […]

A series of lawsuits filed recently against seven large companies and their 401(k) retirement-plan overseers has underscored the care that a sometimes-overlooked corner of the compliance realm needs while monitoring the fees paid in connection with plan investments. Duffie The lawsuits, according to Traywick Duffie of the law firm Hunton & Williams, “are tracking what […]

Recent developments involving the first two whistleblower cases to go to trial under the Sarbanes-Oxley Act have sent mixed signals to individuals who might feel they were unfairly punished for alerting authorities to possible fraud, as well as to companies that might be targets of such complaints. In early October, a U.S. district judge decided […]

Lawyers in Michigan have opened a new front in the battle against Department of Justice demands that companies waive their attorney-client and work-product privileges to get credit for being cooperative, with a first-of-its-kind ethical rule to prohibit government attorneys in that state from demanding such waivers. Samuel Damren, a Detroit lawyer who chairs the State […]

With dozens of companies already embroiled in some type of investigation into past option-grant practices, and many facing litigation, the current wave of stock option scandals has no doubt left many companies digging deep to see whether or not they have an issue, even if the U.S. Attorney’s Office and the Securities and Exchange Commission […]

Critics of a Justice Department memorandum that some say is forcing companies to routinely waive attorney-client and work-product protections—and cut off financial support for employees under investigation in order to curry favor with federal prosecutors—took their calls for reform to Capitol Hill recently, while a top Department of Justice official defended the memo’s principles and […]

When home mortgage giant Freddie Mac announced last month that the Justice Department’s three-year probe into its accounting practices would not result in criminal charges, company spokespersons had to tread carefully while delivering the good news. “It is Freddie Mac’s understanding that it is the practice of the U.S. attorney’s office for the Eastern District […]

The new electronic discovery rules set to take effect Dec. 1 in federal court are meant to clarify the obligations of parties to turn over emails and other electronically stored records—but ambiguity in some of the terminology assures that disputes will continue over when old information will have to be retrieved and what kind of […]

As regulators, prosecutors, and lawmakers continue their scrutiny of stock option backdating, a new study may offer investors more ammunition as they ramp up legal complaints against companies implicated in the much-maligned practice. A study by researchers at the University of Michigan concludes that backdating is costing shareholders big bucks for what amounts to relatively […]