Regulatory Enforcement

Important issues about the attorney-client privilege of general counsel may be emerging from the California courts. The strange case involves the general counsel and vice president of Marvell Semiconductor, who—during acquisition negotiations with Jasmine Networks—failed to hang up his speakerphone after leaving a voicemail for a lawyer at Jasmine. The sensitive conversation was of course […]

Earlier this spring, Cendant Corp. agreed to settle a shareholder derivative lawsuit filed on behalf of the company, which alleged that the amended employment agreement with Chairman and CEO Henry Silverman was approved by the board of directors in violation of their fiduciary duties. EXAMPLES MCI: Unanimously adopted 78 recommendations by Corporate Monitor Breeden. Siebel: […]

Scrushy Back in April, the lawyers of former HealthSouth CEO Richard Scrushy filed a motion to dismiss three counts of his indictment related to Section 906 of Sarbanes-Oxley. The section is often criticized for its interplay with Section 302, as both require CEOs and CFOs to deliver different certificates with most SEC filings; Munger Tolles […]

When shareholders of First Aviation Services Inc. assemble in Memphis, Tenn., today (June 15) for their annual meeting, a rare thing will take place. A proxy fight. That’s right, we said “rare.” For the first time in more than decade, there has actually been a decrease in the number of proxy fights. Institutional Shareholder Services, […]

In a speech before the American Bar Association, SEC General Counsel Giovanni Prezioso shed some light on the Commission’s amicus program, through which it intervenes in private securities litigation to present its point of view.

Though a recent Reuters study found that the SEC has levied more than $500 million in fines this year, the data might not be as frightening for public companies as it sounds. According to Kevin Drawbaugh, who conducted the survey, the bulk of the fines came from the mutual fund timing and research analyst settlements. […]

Reversing an SEC decision that had been based on a section of Sarbanes-Oxley, a federal appeals court ruled last week that two former Gemstar-TV Guide executives could seek $37.6 million in severance payments and back pay. Yuen The executives, former CEO Henry Yuen and former CFO Elsie Leung, left Gemstar in November 2002 amid a […]

Earlier this week, the SEC charged Lucent and nine current and former executives with securities fraud. The SEC’s complaint alleges that Lucent’s violations of GAAP were due to the “fraudulent and reckless actions of the defendants and deficient internal controls that led to numerous accounting errors by others.” But the severity of the fine was […]

Last week, a U.S. Department of Labor administrative law judge ruled that Atlantic Coast Airlines must compensate a former employee after she was fired for blowing the whistle on alleged fraud. The employee, former labor relations manager Stacey Platone, had alleged that some members of the pilots’ union were abusing “flight loss pay,” wherein pilots […]

Study by two professors at Princton and Baruch College examines the role of executive compensation in inducing management behavior that triggers private securities litigation.