The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Tag Archives: D&O liability

Guest Post: BSA/AML Enforcement Trends and D&O Liability

Posted in Director and Officer Liability
In the following guest post, Christopher Laursen, Senior Vice President and Chair, Financial Institutions and Bank Practice at NERA Economic Consulting, takes a look at the current enforcement trends involving the Bank Secrecy Act and the Anti-Money Laundering regulations. I welcome guest submissions from responsible┬ápersons on topics of interest to readers of this blog. If … Continue Reading

The Responsible Corporate Officer Doctrine Gets an Administrative Extension

Posted in Director and Officer Liability
One of the more troublesome trends in recent years has been the increasing willingness of lawmakers and regulators to try to impose liability on corporate officials without regard for the requirements of the corporate form and even without reference to whether the officials are culpable in any way. (Refer here for my most recent discussion … Continue Reading

D&O Insurance: Insured vs. Insured Exclusion Unambiguously Precludes Coverage for FDIC Failed Bank Lawsuit

Posted in D & O Insurance, Failed Banks
One of the recurring D&O insurance coverage issues that has arisen during the current wave of failed bank litigation has been the question whether coverage for an action by the FDIC in its role as receiver of a failed bank against a failed bank’s directors and officers is precluded by the Insured vs. Insured exclusion … Continue Reading

Advisen Releases Private Company D&O Study

Posted in D & O Insurance
There is a great deal of information available about the liabilities of publicly traded companies, as well as about the D&O insurance implications arising from those liabilities. It can be a bit of a challenge to locate the same of information concerning private companies. For that reason, it is fortunate that Advisen and AIG have … Continue Reading

Protection for Public Company Directors and Officers: Indemnification and Insurance

Posted in D & O Insurance
In an environment where public company directors and officers face increasing scrutiny and expanding liability exposures, the indemnification and insurance protections available to them are increasingly important. A July 15, 2013 memorandum from the Gibson Dunn law firm entitled “Director and Officer Indemnification and Insurance – Issues for Public Companies to Consider” (here) takes a … Continue Reading

Mutual Fund Directors in the Hot Seat?

Posted in Securities Litigation
Mutual fund directors have been attacked before. For example, in his 2002 letter to shareholders of Berkshire Hathaway, Berkshire chairman Warren Buffett took a detour in an essay about corporate governance to express concerns about mutual fund directors. He noted that mutual fund directors effectively have only two “important duties”; to pick the fund manager … Continue Reading

Failed Bank Directors’ and Officers’ Affirmative Defenses Against the FDIC Stricken

Posted in Failed Banks
In order to try to defend themselves from claims asserted against them by the FDIC as receiver for a failed bank, the failed bank’s directors and officers often raise affirmative defenses, either based on pre-receivership conduct (as for example, in connection with pre-failure examinations) or post-receivership conduct (as for example in connection with the agency’s … Continue Reading

Nonprofit Board Members’ Statutory Immunity

Posted in Corporate Governance
Most states have adopted statutes providing individuals who serve as directors on nonprofit boards with limited immunity from liability. Among other issues that frequently arise is the scope of the protection provided under this statutory immunity. A recent decision from the Connecticut Appellate Court in a case involving a liability claim against the volunteer President … Continue Reading

Guest Post How Officers and Directors of Financial Intermediaries Can Avoid Personal Liability in the Post-Dodd-Frank Market

Posted in Failed Banks
As the current wave of bank failure litigation has unfolded, the directors and officers of banking institutions rightly have become more concerned about the own potential liability exposures and interested in learning more about how they might be able to reduce their risks and exposures. In the following guest post, Joseph T. Lynyak III , … Continue Reading

FDIC’s Failed Bank Lawsuit against Former IndyMac Officers Goes to Trial

Posted in Failed Banks
Trial in the FDIC’s failed bank lawsuit against three former officers of IndyBank commenced on November 6, 2012 in the federal court in Los Angeles. According Scott Reckard’s November 9, 2012 Los Angeles Times article (here), the parties’ counsel have delivered their opening statements. The case, which was the first failed bank lawsuit the FDIC … Continue Reading

Corporate Officials’ Strict Liability Conviction Under the Responsible Corporate Officer Doctrine Can Have “Career-Ending” Consequences

Posted in Corporate Governance
Under the Responsible Corporate Officer Doctrine, corporate officials can be held liable for misconduct in which they did not participate and of which they have been entirely unaware, based on their responsibility for the corporation itself. As shown in a July 27, 2012 opinion from the District of Columbia Court of Appeals (here), a misdemeanor … Continue Reading

The Impact of the JOBS Act on D&O Liability and Insurance

Posted in D & O Insurance
On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (commonly referred to as the JOBS Act). This legislation, which enjoyed strong bipartisan support in Congress, is intended to ease the IPO process for emerging growth companies and to facilitate capital-raising by reducing regulatory burdens and disclosure obligations. Among other … Continue Reading

Guest Post: Banking Agencies Challenge California’s Business Judgment Rule: Will This Expand Officer and Inside Director Liability?

Posted in Failed Banks
Among the important questions that will need to be answered in connection with the current wave of failed bank litigation is the question of extent to which the non-director officers will be able to defend themselves in reliance on the business judgment rule.     In the following guest post, Jonathan Joseph (pictured to the … Continue Reading

Taking a Look at the Limits of Indemnification

Posted in Shareholders Derivative Litigation
Indemnification is the first and most important line of defense for the protection of directors and officers. But corporate officials are not always entitled to indemnification. For example, under Delaware law, they cannot claim mandatory indemnification if their defense is not successful. And they cannot seek permissive indemnification is they did not act in good … Continue Reading

The Top Ten D&O Stories of 2011

Posted in D & O Insurance
The year just ended was eventful in many ways. Earthquakes, hurricanes, tornadoes, floods, blizzards and droughts were scattered across the globe, and political unrest shook many countries. In a year filled with such significant developments, events in the world of D&O liability pale by comparison. But even if there were no earth-shaking events, 2011 was … Continue Reading

Should Former Directors of Failed Firms be Stigmatized?

Posted in Corporate Governance
In an August 2, 2011 post on the New York Times  Dealbook blog entitled “Ex-Directors of Failed Firms Have Little to Fear”(here), Ohio State University Law Professor  Steven Davidoff voices his consternation that the former directors of Bear Stearns and Lehman Brothers seemingly will be able to “continue their prominent careers.” Davidoff seems miffed that … Continue Reading

Pressure for Action Against Corporate Officials

Posted in Failed Banks
News reports about the September 22, 2010 Senate Banking Committee hearing regarding the SEC have focused on the provocative statements by SEC Inspector General H. David Katz. Among other things, Katz suggested that a Texas-based SEC official quashed the investigation of allegations regarding Stanford Financial Group, allowing the Stanford-related Ponzi scheme to continue. Katz also … Continue Reading

More About the Responsible Corporate Officer Doctrine

Posted in Corporate Governance
Time-honored legal principles typically shield corporate officers and shareholders from direct personal liability for legal violations of the corporation itself, consistent with the notion that the corporation itself has a distinct and separate legal identity. However, as I noted in a prior post (here), courts have evolved a concept called "the responsible corporate officer doctrine," … Continue Reading