In her authorized 2009 biography of American business icon Warren Buffett, The Snowball, Alice Schroeder admirably captured how Buffett’s long and successful business career resulted in the accumulation of not only vast wealth, but also of an impressively large and loyal network of close friends. Among Buffett’s buddies is Fortune Magazine’s editor-at- large, Carol Loomis.
Rule 10b5-1 Trading Plans Under Scrutiny Once Again
When the SEC brought civil enforcement charges against former Countrywide Financial CEO Angelo Mozilo in June 2009, a critical part of the agency’s allegations was that Mozilo had manipulated his Rule 10b5-1 trading plans to permit him to reap vast profits in trading his shares in company stock while he was aware of increasingly serious
Management Liability Insurance: Amounts Due Based on “Pre-Existing Duty” Not Covered Loss
An employer’s management liability insurance policy does not provide coverage for employees’ claims that – contrary to statutory requirements — the employer collected and failed to remit gratuities, because amounts owing due to a preexisting statutory duty do not represent covered loss, according to a recent decision of a Massachusetts federal court applying Massachusetts law.
H-P Shareholders Launch Securities Suit over Autonomy Revelations
When H-P announced on November 20, 2012 that it was taking an $8.8 billion charge after it discovered “accounting improprieties, misrepresentations and disclosure failures” at its Autonomy unit (which H-P acquired in October 2011 for $11.1 billion), there was a great deal of speculation that litigation would quickly follow. The intervening Thanksgiving weekend may have slowed
Post-Holiday Quick Hits
This mix of items from around the web may be just the thing after a long weekend of leftover turkey –even though we are well aware that nothing can come close to a heaping helping of Turkey Tetrazzini three days after Thanksgiving.
Adding up the Likely Legal Costs from H-P’s Autonomy Accounting Scandal: Last
A Bunch of New Failed Bank Lawsuits
The FDIC has been more actively filing failed bank lawsuits than may have been apparent. With the November 20, 2012 update to its online list of failed bank lawsuits, the FDIC made known that it has in recent weeks filed a number of lawsuits that had not previously hit our radar screens. In addition
D&O Insurance: When Can a D&O Insurer Recoup Amounts It Has Paid Out?
As Alison Frankel recently reported in her On the Case blog (here), the insider trading charges to which former Morgan Stanley hedge fund manager Joseph “Chip” Skowron pled guilty cost the company a lot of money. And, as demonstrated in the lawsuit the company recently filed against Skowron, Morgan Stanley wants its money
Securities Class Action Opt-Outs: Back with a Vengeance?
One of the more interesting story lines in the securities class action litigation arena in recent years has been the emergence of substantial class action opt-out litigation, whereby various claimants representing significant shareholder ownership interests select out of the class suit and separately pursue their own claims – and settlements. The class action opt-out
Former Banks Officials Settle FDIC’s Failed Bank Action for Assignment of D&O Policy Rights
According to a November 13, 2012 press release from their defense counsel (here), the five bank officer defendants in an action the FDIC filed against them as the failed bank’s receiver have settled the case for an assignment to the agency of their rights under the bank’s D&O insurance policy.
The case
District Court Affirms SEC’s SOX Section 304 Right to Recoup Bonus Compensation from Executives of Companies Restating Financials
In a November 13, 2012 opinion (here), Western District of Texas Judge Sam Sparks has upheld the right of the SEC under Section 304 of Sarbanes Oxley to seek to clawback bonus compensation paid to the CEO and CFO of Arthrocare, after the company restated its prior financial statements., even though the CEO