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: Dodd Frank Act

D.C. Circuit Strikes Down SEC Conflicts Minerals Rules in Part, Upholds Other Provisions

Posted in Conflicts Minerals
In an April 14, 2014 Opinion (here), the D.C. Circuit struck down a portion of the SEC’s conflicts minerals rules as violative of the First Amendment, while at the same time upholding the other challenged portions of the Rules. A majority of the appellate panel found that the rules’ requirement that companies must disclose in … Continue Reading

Long-Awaited Federal Insurance Office Report Proposes Hybrid Regulatory Model

Posted in Regulatory Reform
The Federal Insurance Office (FIO) has – nearly two years overdue – finally published its long awaited report to Congress on its recommendations for the modernization of insurance regulation in the United States. The broadly ranging 65-page report identifies limitations in the current state-based regulatory model but does not recommend that federal regulation should displace state … Continue Reading

The SEC’s Proposed Pay Ratio Disclosure Requirements: Another Fine Mess

Posted in Executive Compensation
Among the many measures Congress included when it enacted the sweeping Dodd-Frank Act in 2010 was a provision directing the SEC to require companies to disclose the ratio of CEO compensation to median employee compensation. The statutory provision, incorporated into Section 953(b) of the Act, reflected a perception that CEO compensation had gotten out of … Continue Reading

Federal Insurance Office (Finally) Issues Its First Report

Posted in D & O Insurance
Among its many provisions, the Dodd-Frank created a new Federal Insurance Office within the U.S. Department of Treasury. The Act requires the FIO’s Director to provide a report each year to the President and to Congress “on the insurance industry and any other information deemed relevant by the Director or requested [by a Congressional] Committee.” The … Continue Reading

Will Obstacles Deter the SEC’s Dodd-Frank Whistleblower Program?

Posted in Securities Litigation
Whistleblower information may be one of the SEC’s “most effective weapons in its new enforcement arsenal,” but the agency’s whistleblower program “faces challenges on many fronts,” according to an April 23, 2013 New York Times Dealbook article entitled “Hazy Future for Thriving S.E.C. Whistle-Blower Effort” (here). As evidence of the whistleblower program’s promise that article … Continue Reading

The Complex Conflicts Minerals Disclosure Challenge

Posted in Conflicts Minerals, Corporate Governance
The SEC’s conflicts minerals disclosure rules, promulgated as required under provisions of the Dodd-Frank Act, became effective on January 1, 2013, requiring companies to make their first conflict minerals disclosures on or before May 31, 2014 for the 2013 reporting year, as I detailed in a recent post. But though it is widely recognized that … Continue Reading

Guest Post: As Proxy Season Begins, the Dodd-Frank Say-on-Pay Cases Are on the Brink of Death

Posted in Securities Litigation
As I have previously noted on this blog (most recently here), plaintiffs’ lawyers recently have evolved a new approach to litigation relating to the advisory “say on pay” vote required under the Dodd-Frank Act. Under this most recent version of the say on pay litigation, the plaintiffs’ lawyers seek to enjoin upcoming shareholder votes on … Continue Reading

Rep. Frank Introduces Bill to Prohibit Insurance for Compensation Clawbacks and Civil Money Penalties

Posted in D & O Insurance
On May 30, 2012, Representative Barney Frank introduced a bill entitled the “Executive Compensation Clawback Full Enforcement Act” (here) that by its own terms is designed to “prohibit individuals from insurance against possible losses from having to repay illegally-received compensation or from having to repay civil penalties.” The proposed Act’s appears primarily addressed to the … Continue Reading

Second Time Around on Say-on-Pay

Posted in Corporate Governance
The advisory shareholder vote required under the Dodd Frank Act went through its first cycle in 2011, and by and large most companies’ shareholders approved the companies’ executive compensation plans. Only about 45 companies (less than 2%) received negative “say on pay” votes from a majority of investors. But that does not mean that the … Continue Reading

SEC Releases Initial Report on the Dodd-Frank Whistleblower Program

Posted in SOX Whistleblower
Even thought the SEC’s final regulations for the Dodd-Frank whistleblower program just became effective on August 12, 2011, the agency has already filed its first report on the whistleblower program. Under Section 924(d) of the Dodd Frank Act, the SEC must report annually to Congress on its activities, whistleblower complaints and the agency’s response to … Continue Reading

D.C. Circuit Vacates Proxy Access Rules, Blasts the SEC

Posted in Corporate Governance
For many years, one of the fundamental goals of shareholder rights activists has “proxy access,” which would require corporations to include shareholder nominated board candidates on the company’s proxy ballots. Last year, in the wake of the Dodd-Frank Act, the SEC promulgated rules facilitating shareholder director nominations under certain circumstances. However, on July 22, 2011, … Continue Reading

Yet Another Lawsuit Following “No” Vote on “Say on Pay”

Posted in Shareholders Derivative Litigation
On May 25, 2011, In the latest example of shareholders suing a company’s board following a negative “say on pay” vote, two union pension funds filed a shareholders’ derivative action claiming that Umpqua Holdings Corporation’s board violated its duties to investor by approving the2010 compensation plan despite the negative shareholder vote.. The lawsuit follows the … Continue Reading

SEC Adopts Final Dodd-Frank Whistleblower Implementation Rules

Posted in SOX Whistleblower
On May 25, 2011, the SEC adopted the final rules implementing the whistleblower provisions of the Dodd-Frank Act. The SEC declined to propose a rule that would have required whistleblowers to report first through internal corporate compliance programs. However, the SEC adopted changes that are intended to “incentivize whistleblowers to utilize their companies’ internal compliance … Continue Reading

Corporate Governance Perspective: Current Bearings, Future Directions

Posted in Corporate Governance
Largely (although not exclusively) driven by last summer’s enactment of the Dodd-Frank Act, we have entered a watershed period of corporate governance reform. Processes already now afoot have wrought a transformation in the relations between corporate boards and corporate shareholders. Even further changes lie ahead. In this post, I take a look at where we … Continue Reading

The Word is “Whistleblower”

Posted in SOX Whistleblower
A number of different organizations  generate annual publicity for themselves by designating a word (or words) of the year. We are not yet half way through 2011 but I am already prepared to propose my own candidate for this year’s word of the year – the word is “whistleblower.” From the provisions of the Dodd-Frank Act … Continue Reading

Dodd-Frank Rulemaking Delays: Bad, and Likely to Get Worse

Posted in Regulatory Reform
You may have seen May 2, 2011 Wall Street Journal article entitled “Overhaul Grows and Slow” (here), which described the backlog developing as regulators struggle to meet the rule-making deadlines mandated by the Dodd-Frank Act. The article itself was interesting enough, but if you really want to appreciate the daunting task regulators face, you may want … Continue Reading

First the “Say on Pay,” Then the Lawsuit?

Posted in Executive Compensation
One of the many changes introduced by the Dodd-Frank Act was the requirement for a shareholder vote to approve executive compensation. Under the Act’s provisions, the vote is not binding on the company or its board, but is purely advisory. Nevertheless, companies whose shareholders vote against their “Say on Pay” resolutions are finding that lawsuits … Continue Reading

A “Global Guide” to Directors’ Liability and Indemnification

Posted in International D & O
In today’s global economy, business increasingly is conducted cross-jurisdictionally. Company officials and their advisors increasingly must grapple with liability issues arising under the laws of multiple jurisdictions. These liability issues in turn can present complex indemnification and insurance questions. Simply identifying the operative legal considerations can present a significant challenge.   A newly updated legal … Continue Reading

The Dodd-Frank Whistleblower Provisions: Some Other Things to Worry About

Posted in Securities Litigation
Among the many innovations introduced in the massive Dodd-Frank Wall Street Reform and Consumer Protection Act enacted this past July are the new whistleblower provisions, designed to encourage employees and others to report securities law violations to the SEC. The bounty award provided for in the whistleblower provisions seem likely to encourage fraud reporting, but … Continue Reading