Category: Litigation

SCOTUS grants cert in case involving whistleblower statute and case involving state court jurisdiction over ’33 Act cases

SCOTUS will be hearing at least two cases of interest next term: one case, Somers v. Digital Realty Trust, will address the split in the circuits regarding whether the Dodd-Frank whistleblower anti-retaliation provisions apply regardless of whether the whistleblower blows the whistle all the way to the SEC or just internally at the company. The second case,  Cyan Inc. v. Beaver County Employees Retirement Fund, will address whether state courts have jurisdiction over cases brought solely under the Securities Act of 1933 Act.

Will dual-class structures torpedo the business judgment rule?

While there has certainly been a lot of debate about the merits and demerits of dual-class stock, one interesting angle was raised by Charles Elson, director of the University of Delaware’s John L. Weinberg Center for Corporate Governance Delaware Law. In an interview reported in Bloomberg BNA, Elson predicts that expanded use of dual-class corporate structures will lead the Delaware courts to reconsider the business judgment rule.  For companies with no- or low-vote classes of shares, is the business judgment rule in jeopardy?

It’s baaaack — the Financial CHOICE Act of 2017

by Cydney Posner A draft of the Financial CHOICE Act of 2017 (fka version 2.0), a bill to create hope and opportunity for investors, consumers, and entrepreneurs — a masterpiece of acronyming — has just been released (and weighs in at 593 pages).   The bill, sponsored by Jeb Hensarling, Chair […]

SEC charges company with violations of the rules related to non-GAAP financial measures

by Cydney Posner The Corp Fin staff have been dropping hints for quite a while about potential enforcement actions in connection with abuses of non-GAAP financial measures (see, e.g., this PubCo post), and an interesting one has now materialized.  In an Order released today, the SEC announced settled charges against MDC […]

Adhering to Dirks, SCOTUS decides Salman v. US

by Cydney Posner In a case decided unanimously today, Salman v. United States, SCOTUS upheld the Ninth Circuit affirmation of Bassam Salman’s conviction for insider trading, “adher[ing] to Dirks, which easily resolves the narrow issue presented here.”

Are stock options a counterweight to whistleblower bounties?

by Cydney Posner A new academic study, “Rank and File Employees and the Discovery of Misreporting: The Role of Stock Options,” finds that companies that flout financial reporting rules tend to grant more stock options than their peers that adhere to those rules. Moreover, the study found that violators that […]

No more “Tandy” letters from Corp Fin staff

by Cydney Posner Corp Fin has just announced that it will no longer require companies to include “Tandy” language in company responses to staff comment letters. “Tandy” language is a  written representation from the company acknowledging that the disclosure in the document was its responsibility and that it would not […]