As I have noted in prior posts (most recently here), there is a growing chorus of voices calling for the elimination of “short-termism,” and specifically, for the elimination of quarterly earnings guidance. The recently issued reports of two blue-ribbon groups underscore the need for companies to develop and maintain a long-term orientation. More specifically,
Another High Profile Corruption Investigation Underscores a Growing Area of Potential D & O Risk
With its announcement (here) that it is the target of a Department of Justice antibribery investigation, BAE Systems added its name to the growing list of foreign-domiciled companies targeted by U.S. officials for alleged violations of U.S. anticorruption laws. The recent high-profile investigation of Siemens (about which refer here), as well as
Sox for Nonprofit Entities
When it passed the Sarbanes Oxley Act in 2002, Congress’ primary focus was on the transparency and governance of publicly traded companies. But the Act has turned out to have a more pervasive influence, affecting not just public companies but also private companies and nonprofit entities as well. A June 18, 2007 report (here
Supreme Court Issues Tellabs Opinion
The Supreme Court has issued its much-anticipated opinion in the Tellabs case. The opinion can be found here. The case examined the question of what a plaintiff is required to plead under the Private Securities Litigation Reform Act (PSLRA) in order to establish a “strong inference” that the defendant acted with the requisite mental
Leveraged Buybacks
In the latest manifestations of what Forbes magazine recently (here) called “the biggest buyback binge in the history of the market,” both Home Depot and Expedia announced that they would undertake massive amounts of debt to buyback significant portions of their outstanding shares.
The Home Depot plan (which it announced here) is
Supreme Court Rejects IPO Laddering Antitrust Case
The Supreme Court still has not yet issued its much-anticipated decision in the Tellabs case (about which refer here), but it did issue a 7-1 decision today (refer here) in the Credit Suisse Securities v. Billing case, holding that the securities laws preclude application of the antitrust laws in a case filed against
Bankruptcy and D & O Claims Settlements
Ever since “entity coverage” (sometimes called “Side C coverage”) became a part of the standard D & O policy in the mid-90’s, bankruptcy courts have wrestled with the issue whether or not the D & O policy proceeds are property of the estate under Bankruptcy Code Section 541(a) and subject to the
Options Backdating: Sue the Auditors
In prior posts (most recently here), I described various attempts to shift the blame for alleged option grant manipulations to company gatekeepers. In the latest development, Vitesse Semiconductor announced on June 13, 2007 (here) that it has sued KPMG, its former auditing firm, seeking $100 million in damages and alleging that the
Hedge Funds and PIPEs Financing
In an earlier post (here), I examined the risk characteristics surrounding Private Investment in Public Equity (PIPEs) financing, and argued that PIPEs are an increasingly important part of small public company financing, and that companies should not be viewed as suspect merely because they have resorted to PIPEs financing. Since the time of
Delaware Chancery Court Dismisses Options Backdating Derivative Case
In the options backdating related derivative case pending in Delaware Chancery Court involving Sycamore Networks as nominal defendant, Vice Chancellor Leo E. Strine, Jr. granted the defendants’ motion to dismiss, in an opinion (here) that carefully distinguished the earlier Delaware Chancery Court dismissal denials in the Ryan v Gifford (Maxim Integrated Products) case