Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Road to SEC Compliance

By Susan Hackett
August 19, 2003

The Securities and Exchange Commission (SEC) recently issued new rules regulating the conduct of attorneys practicing before it. The SEC has also proposed a new rule ' open for a 60-day comment period ' that would create an 8-K public reporting requirement by the board of directors, to be triggered by a lawyer's mandatory withdrawal from the representation in the event of uncorrected client actions.

The American Corporate Counsel Association (ACCA) has posted an executive summary providing an overview of the rule and the alternative proposal at: www.acca.com/legres/corpresponsibility/307/summary.pdf. (The SEC's final and proposed rules can be found at www.sec.gov/rules/final/338185.htm and at www.sec.gov/rules/proposed/33-8186.htm.)

What can legal departments do to prepare to comply with the new rules? Here are five practical suggestions that may help corporate counsel in private and public companies:

  1. Call a department meeting to clarify the roles and responsibilities of attorneys under the new SEC rules and under the Model Rules of Professional Conduct 1.13 and 1.6.

    At your meeting, you might discuss the following questions:

    • Which attorneys are 'practicing before the Commission?' (The definition is more inclusive than you might think.)
    • What events trigger 'up the ladder' reporting requirements?
    • How does the SEC define (or not!) such crucial terms as material violation, credible evidence, and reasonable behavior by an attorney?
    • What protections are available to lawyers who act reasonably, and what penalties are mandated for those found lacking?
    • Who is the client under the SEC's rule and how does that determination affect your ability to work with daily management in resolving client problems?

    Even if you work in a private company, the standards set by the SEC on these critical matters will likely become a benchmark for courts and others looking to assess the role and response of lawyers investigating wrongdoing in their client companies. It's reasonable to assume that other regulatory agencies will seek to copy these rules to regulate the behavior of attorneys practicing before them, and that state bar associations will seek to amend their rules of practice to 'raise the bar' on these issues.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Major Differences In UK, U.S. Copyright Laws Image

This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.

The Article 8 Opt In Image

The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.

Strategy vs. Tactics: Two Sides of a Difficult Coin Image

With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.

Legal Possession: What Does It Mean? Image

Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.

The Stranger to the Deed Rule Image

In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.