Procurement Fraud Enforcement
May 29, 2007
Each year, the federal government spends several hundred billion dollars to obtain goods and services from corporations and other nongovernmental entities. Under the critical eye of the nation's taxpayers, the federal government has amplified its own scrutiny of the ethics and integrity of its procurement officers and those companies with which it contracts. Via new national legislation and investigative initiatives, the attention of Capitol Hill and federal law enforcement offices across the nation is keenly focused on the prevention, detection and punishment of procurement fraud. It is a brand new day ' and a potentially dark one for the unwary governmental contractor.
Whistleblowing with a French Twist
April 30, 2007
A long accepted and familiar concept in Anglo-Saxon countries, whistleblowing, for cultural and historical reasons, has proven to be a rather unwelcome legal obligation. France's total opposition to whistleblowing has softened over time and has been accompanied by a greater understanding and appreciation of its implications. Nevertheless, strong pervasive principles of French law continue to govern this domain.
A Blow to Private Whistleblowers
April 30, 2007
In a substantial win for businesses, the U.S. Supreme Court recently issued a decision imposing strict requirements for lawsuits by private whistleblowers. Under the federal False Claims Act, once allegations of fraud are publicly disclosed, a relator (as citizen-plaintiffs are called) may bring suit on the government's behalf only if the relator is an 'original source.' In <i>Rockwell International Corp. v. United States</i>, the Court rejected the notion that a relator need only have knowledge of background facts about alleged fraud, even if those facts preceded the fraud. Instead, the Court held that a relator must have direct and independent knowledge of <i>the specific misconduct for which liability is actually imposed.</i>
Backdating Investigations
April 30, 2007
As federal investigators examine the stock option programs of more than 160 companies, innumerable other companies launch internal investigations. As top executives resign, shareholders file dizzying numbers of derivative class action suits. Finally, as the Securities Exchange Commission and Department of Justice bring enforcement actions and criminal charges, the media is vilifying the so-called stock option backdating scandal as the biggest example of corporate abuse since Enron. The option backdating media frenzy focuses upon investigations by federal prosecutors and other regulatory agencies into public companies that have employed stock option compensation plans for corporate executives and employees.
Backdated Options
April 30, 2007
On Feb. 8, 2007, the Internal Revenue Service ('IRS') made an usual offer to employers: on very short notice ' by Feb. 28, 2007, employers could inform the IRS of their intent to pay the back taxes and penalties owed by (non-insider) employees who exercised stock options with 'an exercise price of less than fair market value of the underlying stock on the date of grant in 2006.' Under this Program, companies with backdated options programs were 'allowed' to calculate and pay, by June 30, 2007, on behalf of their employees who exercised such options, a 20% penalty tax, and an additional 1% interest on underpayments, owed by such employees under ' 409A of the Internal Revenue Code ('IRC').
Broad View of Privilege in Second Circuit Ruling
April 30, 2007
It is no longer acceptable ' if it ever was ' for in-house counsel merely to provide reactive assessments of legal risk presented by business people. Today, in-house lawyers must provide proactive solutions to their clients' problems, including solutions that mix legal advice with business-oriented suggestions. Of course, the attorney-client privilege protects only legal advice, and thus presents, at times, a difficult question: when has an in-house counsel provided non-privileged business advice instead of protected legal advice? That line is not always easy to draw, but a recent Second Circuit decision provides some guidance.
Climate Change: Why It Matters for Your Business
April 30, 2007
Climate change? Sustainable development? Greenhouse gases? Global warming? Traditionally, these concepts conjured up tree hugger-led environmental activists' warnings of the Earth's doom resulting from industrial fallout and natural resource use and misuse. Today, these hotly debated, frequently misunderstood scientific theories more often are the subject of critical analysis in corporate boardrooms, among business management and between leading U.S. CEOs. Despite some conflicting reports on the true effects of greenhouse gas emissions and other industrial-related impacts, all agree that the Earth's climate is warmer and continues to heat up annually. No consensus exists as to what can or should be done, how it shall be accomplished or by whom.
Limiting the Effect of BAPCA
April 27, 2007
This article first discusses <i>In re Dana Corp.</i>, 351 B.R. 96 (Bankr. S.D.N.Y. 2006)(<i>'Dana I'</i>), in which the Southern District of New York bankruptcy court denied a debtor's proposed employee 'incentive' program. The article then highlights the differences between the program proposed in <i>Dana I</i> and the program approved by the Southern District of New York in <i>In re Dana Corp.</i>, 2006 WL 3479406 (Bankr. S.D.N.Y. 2006) (<i>'Dana II'</i>). Finally, this article proposes options other than those utilized in the foregoing cases that might be available to bankruptcy practitioners in need of a way to ensure that their clients' top executives do not walk out the door.
Movers & Shakers
April 27, 2007
News about the people leading the e-commerce industry.
<b>Online Exclusive:</b> Most GCs Not Licensed in Home State
April 04, 2007
Companies expect their general counsel to pay attention to all the little details, but some legal chiefs have fallen behind in keeping their own affairs in order. A survey by <i>The Corporate Counselor</i>'s ALM sibling magazine, <i>Corporate Counsel</i>, of the Fortune 250 found eight GCs who are not properly licensed in the state in which they work.
