On February 7, 2025, the Second Circuit ruled that the crime-fraud exception would prevent the former CEO of a public company from invoking attorney-client privilege to prevent an outside lawyer and his law firm from...more
2/12/2025
/ Abuse of Discretion ,
Attorney-Client Privilege ,
Corporate Counsel ,
Corporate Governance ,
Corporate Misconduct ,
Corporate Officers ,
Crime-Fraud Exception ,
Criminal Investigations ,
Criminal Prosecution ,
Department of Justice (DOJ) ,
Enforcement Actions ,
Internal Controls ,
Publicly-Traded Companies ,
Subpoenas ,
White Collar Crimes
Many of the actions by the SEC over the past few years came following closely divided 3-to-2 votes. The split arose concerning both rulemaking by the Commission as well as enforcement actions....more
On January 10, 2025, the SEC announced settled charges against Vince McMahon, former Executive Chair and CEO of World Wrestling Entertainment Inc., for signing two settlement agreements without disclosure to the board, anyone...more
1/14/2025
/ Compliance ,
Corporate Governance ,
Corporate Misconduct ,
Disclosure Requirements ,
Enforcement Actions ,
Financial Reporting ,
Reporting Requirements ,
Sarbanes-Oxley ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Settlement Agreements
A month ago, the U.S. Supreme Court seemed on the verge of deciding two securities law cases that could substantially limit plaintiffs’ ability to maintain securities fraud class actions against public companies. Now, the...more
12/17/2024
/ Appeals ,
Class Action ,
Dismissals ,
Facebook ,
Facebook Inc v Amalgamated Bank ,
NVIDIA ,
Nvidia Corp v E Ohman J or Fonder AB ,
Petition for Writ of Certiorari ,
Publicly-Traded Companies ,
SCOTUS ,
Securities ,
Securities Fraud
After hearing argument earlier this month in a widely followed securities law case concerning risk-factor disclosures of public companies, the U.S. Supreme Court last week decided it should not have agreed to hear the case...more
11/27/2024
/ Class Action ,
Corporate Counsel ,
Corporate Governance ,
Data Breach ,
Disclosure Requirements ,
Dismissals ,
Enforcement Actions ,
Facebook ,
Petition for Writ of Certiorari ,
Risk Factors ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
The U.S. Supreme Court has scheduled argument for November 6, 2024 in an important case involving risk-factor disclosures of public companies. At issue is whether a company’s risk disclosures can be treated as false or...more
11/5/2024
/ Certiorari ,
Disclosure Requirements ,
Form 10-K ,
Material Misstatements ,
Misleading Statements ,
Publicly-Traded Companies ,
Regulation S-K ,
Risk Assessment ,
SCOTUS ,
Securities ,
Securities Exchange Act ,
Securities Fraud
Recently, the SEC announced settled charges against a former chairman/CEO and director of Church & Dwight Co. Inc., for violating proxy disclosure rules by standing for election as an independent director without informing...more
10/8/2024
/ Board of Directors ,
Civil Monetary Penalty ,
Corporate Officers ,
Directors ,
Disclosure Requirements ,
Enforcement Actions ,
Failure To Disclose ,
Independent Directors ,
Proxy Statements ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Regulation
Last week, the SEC announced settled charges against 23 companies and individuals for failing to timely file Section 16 reports on Forms 3, 4 or 5.
Additionally, two public companies were charged for contributing to late...more
10/4/2024
/ Analytics ,
Corporate Governance ,
Enforcement Actions ,
Failure To Disclose ,
Filing Deadlines ,
Filing Requirements ,
Neither Admit Nor Deny Settlements ,
Publicly-Traded Companies ,
Required Forms ,
Securities and Exchange Commission (SEC) ,
Statutory Penalties
The U.S. Supreme Court recently agreed to hear an appeal of a Ninth Circuit decision that could have a significant impact on future securities fraud claims nationwide. At issue is how heavy a burden plaintiffs will bear in...more
As discussed in our September 1, 2021 post, the SEC brought its first “shadow insider trading” case against Matthew Panuwat, a company employee who purchased options in a competitor’s shares shortly after learning his...more
6/14/2024
/ Confidential Information ,
Corporate Governance ,
Criminal Convictions ,
Criminal Prosecution ,
Enforcement Actions ,
Insider Trading ,
Material Nonpublic Information ,
Materiality ,
Misappropriation ,
Publicly-Traded Companies ,
Risk Mitigation ,
Securities and Exchange Commission (SEC) ,
Securities Fraud
The U.S. Supreme Court has now resolved the split in lower courts, discussed in our March 14, 2024 post, over whether plaintiffs may bring a securities fraud claim based solely on a corporation’s omission from public filings...more
4/17/2024
/ Corporate Issuers ,
Disclosure Requirements ,
False Statements ,
Item 303 ,
Macquarie Infrastructure Corp v Moab Partners LP ,
Misleading Statements ,
Omissions ,
Regulation S-K ,
Rule 10b-5 ,
SCOTUS ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934 ,
Securities Violations
Corporate executives know they must disclose in their companies’ financial statements trends or uncertainties affecting their business. Such disclosure is a requirement of Item 303 of SEC Regulation S-K....more
3/19/2024
/ C-Suite Executives ,
Corporate Governance ,
Disclosure Requirements ,
Enforcement Actions ,
Failure To Disclose ,
Material Misrepresentation ,
MD&A Statements ,
Misrepresentation ,
Publicly-Traded Companies ,
Regulation S-K ,
Rule 10b-5 ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Securities Regulation ,
Shareholder Litigation ,
Split of Authority
When corporate executives discuss important company news in SEC filings or on stock-analyst conference calls, they know their words will be scrutinized by listeners and the broader market. Misstatements could give rise to...more
10/9/2023
/ Annual Reports ,
Class Action ,
Class Certification ,
Conflicts of Interest ,
Corporate Counsel ,
Department of Justice (DOJ) ,
Disclosure Requirements ,
Form 10-K ,
Goldman Sachs ,
Material Misstatements ,
Materiality ,
Securities Litigation ,
Stock Prices
Amidst all the controversy and legal proceedings involving Elon Musk, one could overlook the fact that he and his company Tesla are on trial now in U.S. District Court for securities fraud. Yet they are: a jury has been...more
It has now been 20 years since the historic collapse of WorldCom, Inc. (“WorldCom” or the “Company”). A review of the WorldCom collapse yields some continuing lessons for corporate counsel....more
7/26/2022
/ Attorney-Client Privilege ,
Board of Directors ,
Corporate Management ,
Fiduciary Duty ,
Internal Controls ,
Privileged Communication ,
Risk Management ,
Shareholder Approval ,
Stock Trades ,
WorldCom ,
Written Consent
A recent Delaware Chancery Court decision highlights the liability risks faced by directors and sponsors of special purpose acquisition companies (“SPACs”) and the importance of robust disclosure in protecting against those...more
1/25/2022
/ Board of Directors ,
Breach of Duty ,
Business Judgment Rule ,
Corporate Governance ,
Mergers ,
Personal Liability ,
Public Disclosure ,
Risk Management ,
Shareholder Litigation ,
Shareholders ,
Special Purpose Acquisition Companies (SPACs) ,
Sponsors
With the Delta variant surge, many companies have delayed plans for a return to in-person board and committee meetings. The go-to alternative, in many cases, will be a return to video conferences, which worked well in the...more
9/30/2021
/ Attorney-Client Privilege ,
Board Meetings ,
Board of Directors ,
Confidential Business Information (CBI) ,
Consent ,
Coronavirus/COVID-19 ,
Corporate Governance ,
Data Privacy ,
Evidence ,
Privacy Concerns ,
Risk Management ,
Videoconference ,
Virtual Meetings
The SEC’s filing of its first shadow trading case earlier this month signals the agency’s willingness to pursue actions based on expanded theories of insider trading liability.
In a federal court complaint, the SEC on...more
In a closely followed case concerning class certification in securities fraud class actions, the U. S. Supreme Court has held that the generic nature of a company’s statements should be considered in determining whether such...more
6/28/2021
/ Arkansas Teacher Retirement System v Goldman Sachs Group ,
Basic v Levinson ,
Burden of Persuasion ,
Burden of Proof ,
Certiorari ,
Class Action ,
Class Certification ,
Conflicts of Interest ,
Goldman Sachs ,
Investors ,
Presumption of Reliance ,
SCOTUS ,
Securities Exchange Act ,
Securities Litigation ,
Shareholders
Special purpose acquisition companies (“SPACs”), it seems, are everywhere. SPACs have been around for decades, but use of a SPAC to take a company public without a traditional initial public offering (“IPO”) has recently...more
The National Defense Authorization Act (“NDAA”) became law on January 1, 2021 after Congress overrode a presidential veto of the legislation. While the NDAA appropriates funds for defense-related activities and the...more
In its first enforcement action against a public company for misleading disclosures regarding COVID-19’s business impact, the SEC released a December 4 Order Instituting Proceedings against The Cheesecake Factory Inc. and...more
A recent decision by the U.S. Court of Appeals for the Second Circuit shows how an investor’s entering into a confidentiality agreement with an issuer of securities may support insider trading charges against the...more
Liu v. Securities and Exchange Commission, the U.S. Supreme Court decision this week affirming the SEC’s right to seek disgorgement, displayed a striking consensus on the securities regulatory agency’s ability to seek...more
6/26/2020
/ 15 U.S.C. § 78u(d)(5) ,
Administrative Authority ,
Business Expenses ,
Calculation of Damages ,
Corporate Misconduct ,
Disgorgement ,
Enforcement Actions ,
Equitable Relief ,
Kokesh v SEC ,
Lack of Authority ,
Liu v Securities and Exchange Commission ,
Net Profits ,
Remedies ,
SCOTUS ,
Securities and Exchange Commission (SEC)
Federal, state and local law enforcement and consumer protection agencies have been issuing alerts and investigating cases regarding efforts by fraudsters to exploit the coronavirus crisis for profit. The SEC is taking...more