Category: Litigation

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 […]

First SEC enforcement actions for violations of auditor independence rules resulting from personal relationships

by Cydney Posner In two orders made public today, the SEC announced settled charges against EY and individual EY auditors (and officers involved at the subject companies) with regard to alleged violations of the auditor independence rules as a result of “close personal relationships” with officers at audit clients.  According […]

Ninth Circuit addresses SOX 304 clawback requirements and liability for Rule 13a-14 false certifications

by Cydney Posner A new case from the 9th Circuit, SEC v. Jensen, is the first circuit court case to confirm the SEC’s position that the “clawback” provisions of SOX 304 provide for a disgorgement remedy against CEOs and CFOs when the issuer has restated its financial statements as a […]

Study finds disclosure of “critical audit matters” may reduce legal exposure for auditors

by Cydney Posner When the PCAOB originally floated the idea of an expanded audit report in 2011, the proposal fueled quite a controversy.  Supporters of the concept contended that the current form of the auditor’s report was just boilerplate that “tells investors little of substance about a company’s true condition,” while […]

No petition for cert in Natl Assoc. of Manufacturers v. SEC, the conflict minerals case

by Cydney Posner No reason to keep checking the SCOTUS website for the SEC’s cert petition in Natl Assoc. of Manufacturers v. SEC, the conflict minerals case. According to this letter from Attorney General Loretta Lynch to House Speaker Paul Ryan (courtesy of thecorporatecounsel.net blog), “[a]lthough the Commission defended the constitutionality of […]

In re Sanofi: 2d circuit considers misleading statements of opinion after Omnicare

by Cydney Posner In an early appellate decision applying Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund,  a three-judge panel of the 2d Circuit,  on March 4, issued its opinion in  In re Sanofi. The plaintiffs in that case had alleged that defendants’ material omissions regarding a drug candidate – […]

Court dismisses case to compel SEC to act on rulemaking petition for corporate political spending disclosure

by Cydney Posner As noted in Law360,  a DC District Court has granted the SEC’s motion to dismiss a complaint filed to compel the SEC to act on a rulemaking petition regarding corporate political spending disclosure.  Of course, as discussed in this PubCo post, a provision prohibiting the SEC from […]

Is a lot more at stake in the conflict minerals case than the conflict minerals disclosure rules?

by Cydney Posner An amicus brief filed in the conflict minerals case, National Association of Manufacturers, Inc. v. SEC, was submitted this week by a group of anti-smoking  and other organizations dedicated to protecting public health: Truth Initiative, Public Health Law Center, National Association of County and City Health Officials, […]

Second Circuit defers to SEC interpretation of “whistleblower” for purposes of retaliation suit under Dodd-Frank

by Cydney Posner In Berman v. Neo@Ogilvy LLC, a three-judge panel of the Second Circuit reversed and remanded a decision of the SDNY, which had dismissed a claim for retaliation by a  former employee on the basis that Dodd-Frank’s whistleblower protections apply only to employees discharged for reporting violations to […]