Conflicts of Interest

News & Analysis as of

Three Principals of Adviser Settle SEC Charges Over Undisclosed Conflicts

The Commission filed another settled action based on undisclosed conflicts involving an investment adviser. In this proceeding Respondents, principals of the adviser, failed to disclose a fee splitting arrangement with an...more

Delaware Court of Chancery Applies Business Judgment Rule to Directors Who Approve Merger Supported by Large Shareholders

In its October 24, 2014, decision in In re Crimson Exploration Inc. Stockholder Litigation, C.A. No. 8541, the Delaware Court of Chancery confirmed that the business judgment rule is applicable in evaluating claims for breach...more

The Regulators Are Coming! The Regulators Are Coming!

Regulators, in-house lawyers and compliance officers told a serious cautionary tale at the recent Practicing Law Institute Broker-Dealer Regulation and Enforcement seminar. Representatives of the Securities and Exchange...more

Community Redevelopment Law Conflict-of-Interest Rules Apply to Successor Agencies

California Attorney General Weighs In on Rule That Will Impact Members of Successor Agencies’ Governing Boards and Employees - The California Attorney General recently opined that the conflict-of-interest rules under...more

Derailing an Expert in the Rail Freight Fuel Surcharge Antitrust Litigation: What Every Litigator Needs to Know

The business of buying, selling, investing in, and arbitraging legal claims continues to grow, and carries with it hidden pitfalls. This is particularly the case when a litigation expert has a business relationship with a...more

New York Appellate Court Dismisses Claims Against Reinsurer And Its Claims Administrator

In what began as a dispute between OneBeacon America Insurance Company and its insured, Colgate, over OneBeacon’s asserted right to control the defense of claims against Colgate in connection with numerous personal injury...more

California Attorney General Offers Guidance on Scope of Government Code Section 1090

Pair of Recent Opinions Clarifies Conflict-of-Interest Statute - California Attorney General Kamala Harris recently issued two opinions illuminating the scope of Government Code section 1090, the powerful and...more

Social Media Risk: Forget the Constraints and Open the Employee Conversation

By now, we all have at least one example of how social media can turn into a double-edged sword for organizations. Personal favorites include the SEC’s investigation (and ultimate non-action) regarding Netflix CEO Reed...more

Early Preview of 2015 SEC Exam Priorities

The SEC continues to set its sights on certain types of funds that it believes may present a higher risk of conflict of interest and confusion in the way they are designed and marketed. After signaling earlier this year that...more

The General Counsel Is Not The Shareholders’ Agent

A recent paper by Adair Morse, Wei Wang, and Serena Wu, Executive Gatekeepers: Useful and Divertible Governance, tackles interesting questions about the the effectiveness of internal gatekeepers and the impact of equity...more

A Compilation of Enforcement and Non-Enforcement Actions

Non-Enforcement - Cost of Proposed User Fees by Registered Investment Advisers Further Discussed - SEC Valuation Guidance for All Funds - Update on Insider Trading in Mutual Fund...more

Tips for Managing and Disclosing Conflicts of Interest

Conflicts of interest arise in any relationship where a duty of care or trust exists between two or more parties. For financial services companies the identification and management of conflicts of interest must be a core...more

Investment Management Legal + Regulatory Update -- September 2014

In This Issue: - Regulation: Long-Awaited Money Market Fund Rules Adopted - SEC Staff Offers Guidance Regarding Investment Advisers and Proxy Advisory Firms - SEC Staff Closes Loophole on BDC Asset...more

SEC Continues Crackdown on Investment Advisers

The Securities and Exchange Commission (SEC) is continuing to pursue enforcement actions that focus on the accuracy and comprehensiveness of economic benefit disclosures – both to clients and in public filings. ...more

SEC Proceedings Against IAs Center On Conflicts of Interest

Conflicts of interest are at the center of two administrative proceedings recently instituted by the SEC. One involved the failure to adequately disclose the conflict. The other focuses on a failure to institute appropriate...more

Conflict of Interest Toolkit: Tips for Recognizing, Avoiding, and Responding to Conflicts

Organizational conflict of interest abounds. On any given day, news media often report at least one story about a potential conflict of interest. And no industry or type of employer has a monopoly on conflicts....more

Insurer’s “Reservation of Rights” Creates a Conflict of Interest, Entitling the Insured to Independent Defense Counsel

In case that has been widely watched by Minnesota insureds and insurers alike, a federal district court ruled Tuesday that an insurer’s “reservation of rights” letter created a conflict of interest, thereby permitting the...more

What Peppers Counsel Needs to Know Before Agreeing to Follow Insurer Litigation Guidelines

When an insurer agrees to defend its insured against a potentially covered claim without reserving the right to deny coverage, the insurer usually has the right to control the defense of the underlying lawsuit. See 3 Jeffrey...more

This Week In Securities Litigation

In the roll-up to the Labor Day weekend, the SEC issued new rules regarding asset backed securities and credit rating agencies. The Commission also announced a new pilot program on tick size....more

SEC Adopts Rules For Credit Rating Agencies

At an open meeting this morning, the SEC adopted, by a vote of three to two, rule amendments and new rules to implement provisions of Dodd-Frank applicable to credit rating agencies registered as nationally recognized...more

Revised Draft Rule G-42: MSRB Continues to Fine-Tune Rules Applicable to Municipal Advisors

On July 23, 2014, the Municipal Securities Rulemaking Board (MSRB) issued Regulatory Notice 2014-12 requesting comments on a revised draft of MSRB Rule G-42 on standards of conduct and duties of municipal advisors when...more

Protests: Timing Is of The Essence

Another federal government fiscal year end is quickly approaching and with it comes the usual uptick in spending, awards...and inevitable protests. If you are considering a protest, it is critical to understand the deadlines...more

Who Should Take Conflict of Interest Training?

The other day I wrote about antitrust training and I opened with describing how it is one of the less popular training topics, or at least I perceive it to be. I never thought I’d get remotely interested in something like...more

"MSRB Actions Regarding Municipal Advisors: Release of Revised Draft Rule G-42 for Comment, and Submission of Proposed Rule G-44...

This mailing is to inform you of the Municipal Securities Rulemaking Board (MSRB) releasing Revised Draft Rule G-42 (setting forth duties of non-solicitor municipal advisors) for public comment, and submitting Proposed Rule...more

Conflicts & Nepotism – A Dangerous Employment Cocktail

Last week, Alabama Governor Robert Bentley removed Alabama State University Trustee Marvin Wiggins for violating the University’s conflict of interest rules. The removal proved once again that if you are responsible for the...more

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