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 […]
Regulatory Enforcement
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 […]
Posted inEthics & Culture
Labor Law Violation Shouldn’t Impact Ethics Programs
A ruling by a federal appeals court last month that a company violated federal labor law by implementing a workplace ethics program without union consultation might seem like bad news for companies struggling to satisfy ethics mandates. Servodidio But Thomas Servodidio, a partner with Duane Morris in Philadelphia, tells Compliance Week that companies needn’t be […]
Posted inRegulatory Enforcement
Material Adverse Conditions Open To Interpretation
When Johnson & Johnson informed Guidant Corp. that it was not required to go through with its planned $25.4 billion acquisition, the health care giant cited a series of events that have had “a material adverse effect” on Guidant. For example, the $47.3 billion consumer products giant referred to “previously announced product recalls at Guidant […]
Posted inRegulatory Enforcement
Application Of SOX To Foreign Whistleblowers Uncertain
This is the second of a two-part look at issues arising under the whistleblower provisions of the Sarbanes-Oxley Act. The first article dealt with private subsidiaries of publicly owned companies, and is available from the box at right. Although the Sarbanes-Oxley Act has been law for more than three years, it’s still not clear whether […]
Posted inRegulatory Enforcement
Class Action And “Opt Out” Lawyers Duke It Out
When Bill Lerach announced that his law firm recovered more than $651 million for investors who were not part of the class action lawsuits arising from the financial collapse of WorldCom, the high-profile lawyer hailed the recoveries as “unprecedented.” “Recoveries represent premium over class action settlement,” screamed part of the headline announcing the settlement. “Our […]
Posted inRegulatory Enforcement
DoJ Wants Review Process For Privilege Waiver Requests
The Department of Justice last month issued a directive requiring federal prosecutors to create a review process for supervisory approval of requests for companies to waive the attorney-client privilege and work product protection. But this should not be interpreted as a weakening of the DoJ’s interest in obtaining privileged materials, according to experts. The Oct. […]
Posted inRegulatory Enforcement
Application Of SOX Whistleblower Rulings Inconsistent
There has been confusion to date about whether non-publicly traded subsidiaries of publicly traded companies are subject to the whistleblower provisions of the Sarbanes-Oxley Act. That conclusion—by two lawyers with Wilmer Culter Pickering Hale and Dorr in Washington—is based on a comprehensive analysis of every administrative ruling and federal court decision under Section 806 of […]
