Securities Fraud and Sentencing Guidelines After Sarbanes-Oxley
April 01, 2004
In the legislative process that led to the adoption of Sarbanes-Oxley, legislators from both sides of the aisle vied with each other to establish their credentials for being tough on white-collar crime. The maximum penalties for mail fraud and wire fraud were increased from 5 to 20 years. Pub. L. No. 107-204 ' 903. The maximum penalty for willful violations of any provision of the Exchange Act or rule or regulation adopted thereunder the violation of which is unlawful was increased from 10 to 20 years. Pub. L. No. 107-204 ' 903. If this were not enough, a new crime relating to securities fraud in connection with the securities of public companies with a maximum penalty of 25 years was created. Pub. L. No. 107-204 ' 807. This does not exhaust the list, but should be sufficient to suggest that there are more than enough post-Sarbanes-Oxley criminal laws covering financial fraud to deter rational corporate officers and others from participating in financial crimes.
First Sarbanes-Oxley Whistleblower Decision
April 01, 2004
In the first ruling applying the whistleblower protections of the Sarbanes-Oxley Act of 2002, 18 U.S.C. ' 1514A, an Administrative Law Judge (ALJ) ordered a bank holding company to rehire its former Chief Financial Officer (CFO), after finding that the company fired the CFO in retaliation for reporting alleged accounting misconduct to the company's Chief Executive Officer (CEO), outside auditors, and others.
Compliance Hotline
April 01, 2004
The latest rulings of importance to you and your practice.
Once-Sleeping Giants Awake
April 01, 2004
Mention Institutional Shareholder Services (ISS) to a board member of a publicly held corporation, particularly a corporation with significant institutional ownership, and the reaction will undoubtedly be mixed. Why? Just as the takeovers of the 1980s spurred institutional stockholders into taking a greater role in corporate governance, so too have the corporate scandals of recent years caused a stir among once-passive institutional stockholders. They increasingly use ISS recommendations to vote their stock holdings, and as a result, ISS's recommendations are garnering a fair amount of attention in corporate board rooms.
Cameo Clips
April 01, 2004
Recent cases in entertainment law.
Case Briefs
April 01, 2004
Highlights of the latest insurance cases from around the country.
Impact of Foreign Tax Credits On Composer's Royalties
April 01, 2004
There has long been a dispute between songwriters and publishers as to whether songwriters are entitled to a proportional share of a publisher's savings resulting from foreign tax credits. A recent decision of New York's highest court, the Court of Appeals, resolved this issue in favor of the publisher. Under the ruling, absent express contractual language to the contrary, a songwriter is not entitled to share in the benefit of foreign tax credits taken by his or her publisher. Drafters and negotiators should take particular note of this development.
Attorney Fees Update
April 01, 2004
Depending on the circumstances and the law, parties on either side of an entertainment suit may ask a court for an award of attorney fees. Following are recent court rulings that deal with this and related concerns. In this and future issues, <i>Entertainment Law & Finance</i> will report on such relevant rulings in Attorney-Fee Updates.
Selecting Defense Counsel and Controlling the Defense: Who Makes the Call When Rights are Reserved?
April 01, 2004
Where an insurer accepts a tender of defense unconditionally, the insurer generally has the right to select counsel to defend the policyholder. There, the policyholder and the insurer share identical interests in seeing the matter resolved in their favor. Logic suggests that that even if a reservation of rights letter were issued to a policyholder, the insurer would still be able to select counsel to defend the policyholder. This is so because the attorney enrolling as counsel for the policyholder, although paid by the insurer, would be ethically obligated to represent the interests of the policyholder — his client — to the best of his abilities and to place the interests of the policyholder first. However, many courts have found that when an insurer offers a defense under a reservation of rights, a conflict of interest exists between the insurer and the insured relating to the defense of a suit against the insured. Therefore, the insured may, if he so elects, select independent counsel whose reasonable fees are to be paid by the insurance company. <i>See</i> Todd R. Smyth, <i>Duty of Insurer to Pay for Independent Counsel When Conflict of Interest Exists Between Insured and Insurer,</i> 50 A.L.R. 4th 932.
