Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
“Third-party facilitators have played a critical role in allowing corporate misconduct to happen,” according to Deputy Attorney General James B. Comey, Jr., head of the Justice Department's Corporate Fraud Task Force. Stephen Cutler, Director of Enforcement for the SEC, has warned that financial institutions violate the federal securities laws by “contributing to fraudulent accounting and manipulated financial results” of public companies. In a recent report, the Enron bankruptcy examiner described a financial institution as an “enabler” of violations by Enron's officers. In the Sarbanes-Oxley era, the government is not only rounding up the direct violators, but has also brought aiding-and-abetting charges against companies that entered into certain business transactions with other companies accused of securities violations, even though the alleged abettors themselves filed honest reports with the SEC.
The government's trend of charges against secondary actors is not necessarily an attempt to expand the law of aiding and abetting. To date, the SEC complaints have carefully alleged the traditional elements. However, at least some of the recent cases raise issues regarding the level of knowledge and intent required for an aiding-and-abetting charge and the evidence necessary to support it. In announcing one case, the SEC contended that “if you know or have reason to know that you are helping a company mislead investors, you are in violation of the federal securities laws.”
The result is that honest companies may be forced to become their counter-parties' keepers whenever “normal” business transactions may affect public financial reports or otherwise enable the counter-party to violate the federal securities laws. Thus, in addition to analyzing the economic risks of a significant transaction, companies may need to examine the likelihood that their counter-party will fail to report the transaction properly and that the false reporting will materially impact the counter-party's financial statements. Unless the company can prove that it reasonably believed the counter-party would report the transaction honestly, prosecutors with 20-20 hindsight may charge the company as a “facilitator” of the counter-party's subsequent financial reporting fraud.
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
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.
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.
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.
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?