New In-House Counsel Duties Under SAS 99
In its continuing effort to respond to high profile fraudulent financial reporting and to strengthen safeguards against fraud and the misappropriation of funds, the American Institute of Certified Public Accountants (AICPA) has issued Statement on Auditing Standards 99: Consideration of Fraud in a Financial Statement. Generally known as SAS 99, the new standard imposes additional requirements on the audit process and applies to audits of 2003 financial statements for both public and private companies. As in-house corporate counsel, you can be affected by this new measure in several ways, most notably in the information you may be required to gather and the questions you may be expected to answer. In addition, certain information gathered under SAS 99 can help public companies meet requirements imposed by the Sarbanes-Oxley Act.
Board Protection: Individual Liability Insurance for Independent Directors
In the wake of recent corporate governance scandals, independent directors of public companies face increased levels of scrutiny and heightened prospects for the risk of personal liability. Recent court decisions have criticized directors of public and private companies for insufficient attention to their duties. The Sarbanes-Oxley Act of 2002 (S-O) and the proposed corporate governance reforms of the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (Nasdaq) call for decisions about critical matters such as accounting policies and executive compensation to be made solely by directors who meet rigorous independence standards. In response to the ongoing tide of corporate governance reforms as well as the rising numbers of shareholder lawsuits and escalating settlement costs, insurance companies have sharply increased premiums for traditional directors' and officers' liability insurance (D&O insurance), which typically insures officers and directors as well as the company itself. At the same time, insurers have narrowed the scope of coverage of D&O insurance policies in terms of both dollar limits and the types of insured events.
Advice on Avoiding Misunderstandings in Premises Measurement
What could be simpler, more mundane, and less worthy of a lawyer's attention than lease provisions dealing with a business term — the square footage of the premises? However, a lawyer's failure to define the agreed-upon method of its measurement properly in the lease can lead to headaches and even litigation as the lease term progresses. Because measurement standards are not mandatory or legislated, the parties are free, depending on their relative market positions, to agree upon the method to be used in the lease. Often the measurement of square footage is referred to in terms that are imprecise and have no legal definition. Depending on the area where the building is located, measurement methods may vary and a landlord may have its own method that is a modified form of a particular standard of measurement. Without a specified measurement standard and the right to confirm a landlord's measurement, a tenant could end up paying more for its space than it intended (or budgeted); and may later find itself unable as a practical matter to contest a landlord's measurement of an expansion space.
Monitoring the Nasdaq Capital Gains
We are at a wonderful period in time in many ways. We are enjoying the year-end holiday season with our family and friends, the Dow index has crested the…
Trends in Deal Terms
Set forth below are our findings based on a review of the 34 publicly-reported venture capital financings that took place in the Mid-Atlantic region during…
Are Anti-Trust Laws About to Bite Europe on Its IP Assets?
In the Nov. 11 edition of <i>The Wall Street Journal</i>, Ian Harvey, chief executive of tech firm BTG plc, said "if the European Commission were looking for a way to cripple technological innovation in Europe, it could hardly have come up with a better proposal than its proposed rules on technology transfer." Indeed, that proposal will no longer govern merely patents and know-how, but also software-copyright licenses - a move that might very well have a big impact on a variety of e-commerce business models.
Canadian MP and Senator Champion Anti-Spam Bills
Two bills aimed at establishing strict national anti-spam legislation in Canada expired when the last session of Parliament ended in November without them being enacted, but the legislators who introduced the measures vowed to reintroduce the bills in the next session of Parliament, which is expected to begin Jan. 12, 2004. The bills, as drafted, would subject people who violate the laws to hefty fines, imprisonment, or both.
Enron Versus Wall Street
In late September 2003, Enron Corp. and Enron North America Corp. sued more than 40 banks and financial institution defendants for knowingly participating with insiders of Enron in a "multi-year scheme to manipulate and misstate Enron's financial condition." Complaint at '1.
Patent Protection or <i>Per Se</i> Antitrust Violation?
As the winter months approached, a storm was brewing in the antitrust world. The U.S. Courts of Appeals for the Sixth and Eleventh circuits have split over the per se illegality of Hatch-Waxman patent-settlement agreements by which a patent-holding drug maker pays a generic drug company to delay its entry into the market. The Federal Trade Commission (FTC) has harshly criticized these agreements, and now the Supreme Court has an opportunity to calm the fury.
