On January 16, 2007, the Lerach Coughlin firm filed a purported securities class action lawsuit in federal court in the District of Columbia against Sunrise Senior Living and several of its directors and officers. A copy of the law firm’s press release can be found here and a copy of the complaint can be found
Is Backdating Criminal?
In a January 10, 2007 Wall Street Journal op-ed piece provocatively entitled “Should Steve Jobs Go to Jail?” (here, subscription required) the attorneys for Gregory Reyes, the former CEO Brocade Communications who faces criminal charges in connection with stock option activity at Brocade, present their view that “most options backdating cases” are
What Should Boards Worry About?
According to an article in the January/February 2007 issue of Corporate Board Member entitled “Is Your Company Prepared for Bird Flu?” (here), boards should be anticipating and preparing for the potential impact of a bird flu pandemic. The article quotes former Secretary of Health and Human Services Tommy Thompson as saying that smart
The PCAOB’s Audit Firm Inspection Reports
On January 11, 2007, the Public Company Accounting Oversight Board (PCAOB) released its annual inspection reports of Ernst & Young LLP and KPMG LLP. The reports can be found here and here. The PCAOB is required by law to annually inspect each accounting firm that audits more than 100 public companies. The agency’s
Is London’s “Light Touch” Attracting Fraudsters?
In my prior comments on the Paulson Committee’s calls for regulatory reform (most recently, here), I have suggested that perhaps the U.S. securities markets may be better off without at least some of the companies that are avoiding the U.S. exchanges’ tougher listing requirements. A recent report by a U.K. accounting firm contains interesting
Executive Pay, Shareholder Activism, and Board Duties
There is no particular reason why I should bestir myself to defend ousted Home Depot CEO Robert Nardelli: He certainly bagged sufficient swag to soften the blows of even his most outraged attacker. Yet I think it is important to incorporate into the modern morality play that his departure has become a fair recognition
Apple Derivative Plaintiffs Allege Option Springloading
In their Consolidated Amended Shareholder Derivative Complaint filed December 18, 2006 in the federal court in San Jose, the plaintiff in the Apple Computer shareholders derivative action have zeroed in on alleged options springloading practices. A January 3, 2007 Los Angeles Times article entitled “At Apple, Timing Led to Overnight Windfalls” (here) describes
Securities Fraud Lawsuit Severity Soars, Even While Frequency Declines
While the number of securities fraud lawsuits declined in 2006 (see here and here), the average size of securities fraud lawsuit settlements increased by 37% relative to 2005, even excluding the impact of the Enron settlement, according to a January 2, 2006 study by National Economic Research Associates (NERA). The study, entitled “Recent Trends
Law Firm Battle Produces Allocation Decision
A dispute arising out of the Clifford Chance law firm’s brief attempt to establish a California presence by recruiting a number of partners from the late, lamented Brobeck, Phleger & Harrison firm has resulted in a ruling under New York law on the proper standard to use in allocating loss between covered and uncovered parties
Daimler-Chrysler Settles With Its D & O Carriers
According to January 2, 2007 news reports (here and here), DaimlerChrysler AG has reached a settlement with its D & O insurers in connection with the $300 million settlement of the securities class action lawsuit that had been filed against the company.
The securities class action lawsuit was filed in May 2002, relating