One of the Dodd-Frank Act’s signature features was its creation of potentially massive bounties for whistleblowers that reported financial fraud to the SEC. During the time that the Dodd-Frank whistleblower program has been in place, the agency has made a number of significant bounty awards. Mary Jo White, the SEC chairwoman, has said that the program “has rapidly become a tremendously effective force-multiplier, generating high quality tips and, in some cases, virtual blueprints laying out an entire enterprise, directing us to the heart of an alleged fraud.” The SEC’s whistleblower program has also attracted the attention of other countries’ securities regulators, with the various countries reaching a variety of conclusions about the program, particularly its bounty award feature. In the past several days, securities regulators in Ontario and in Germany have each adopted their own whistleblower programs. The different approach the regulators have taken is interesting, as discussed below. Continue Reading Securities Regulators Around the World Adopt Whistleblower Reporting Programs
A Local Perspective on the Republican National Convention
As most of you undoubtedly are aware, the Republican Party held its National Convention last week in Cleveland, Ohio, The D&O Diary’s home town. In light of this special event right in our own backyard, we deputized a special events reporter to attend and report back for the benefit of this blog’s readers. Our special events reporter’s account follows below. Our reporter, Rob LaCroix, a May 2016 graduate of Middlebury College, will be attending Stanford Law School in the Fall. I should add that the Convention took place in Cleveland at a particularly good time in the life of the city. We just brought home the NBA championship a few weeks ago, and the Indians are in first place in the American League Central Division. The fact that the Convention went smoothly and without incident (at least outside of the convention hall) is a point of great pride for the city. Here is our special reporter’s account. Continue Reading A Local Perspective on the Republican National Convention
July in Germany and Austria
The D&O Diary was on assignment in Europe this past week for meetings in Germany, with a brief stopover in Austria before returning home. The picture to the left was taken during our short visit to Salzburg, Austria, which is described below. The trip’s main event was a series of meetings in Munich with industry colleagues at Munich Re. The company’s beautiful Munich headquarters building on Königinstraße, opposite the main entrance of the Englischer Garten, is pictured below. Continue Reading July in Germany and Austria
Second Round of Frisbee Photos
T
he D&O Diary’s readers cover a lot of ground and have an incredible diversity of interests, if the latest round of Frisbee photos is any indication. Readers may recall that in connection with The D&O Diary’s recent tenth anniversary, I offered to send out a D&O Diary tenth anniversary Frisbee to anyone who requested one – for free — but only if the Frisbee recipient agreed to send me back a picture of the Frisbee and a description of the circumstances in which the picture was taken. I have already published one round of Frisbee photos, and now it is time for the second round. Continue Reading Second Round of Frisbee Photos
Eighth Circuit Split Spotlights Tensions with the Responsible Corporate Officer Doctrine
One of the bedrock principles of our legal system is that criminal liability attaches only to those who act with intent or knowledge – that is, as the legal scholars say, with mens rea (or a guilty mind). The “responsible corporate officer doctrine” sits uneasily with these notions, imposing liability as it does on corporate officers not for their involvement in or even awareness of wrongdoing, but simply for their status as persons responsible for the company involved. A recent decision from the Eighth Circuit, in which each judge on the three-judge panel that heard the case wrote a separate opinion, underscores the tensions the responsible corporate officer doctrine presents within our system of justice, and potentially sets the stage for further consideration of these issues. The Eighth Circuit’s July 6, 2016 opinion in U.S. v. DeCoster can be found here. Continue Reading Eighth Circuit Split Spotlights Tensions with the Responsible Corporate Officer Doctrine
Global Litigation Trend Lines Converge in Massive U.K. Collective Action Competition Claim Against MasterCard
There have been few more powerful forces acting recently on the litigation environment around the world than third-party litigation financing. The recent rise of litigation funding, often accompanied by the active involvement of U.S. law firms, is changing the face of litigation in numerous countries. The collective action to be filed against MasterCard later this summer in the U.K. by U.S. law firm Quinn Emanuel, in an initiative being financed by Chicago-based litigation funding firm Gerchen Keller Capital LLC, is the latest and highest profile example of this trends. Indeed, the anticipated MasterCard action in some ways reflects the coming together of many of the important global litigation trends, as discussed below. The Quinn Emanuel law firm’s July 2016 press release about the planned lawsuit can be found here. Julie Triedman’s July 6, 2016 American Lawyer article entitled “Quinn Emanuel, Litigation Funder Team Up for Landmark $25B MasterCard Fight” can be found here. Continue Reading Global Litigation Trend Lines Converge in Massive U.K. Collective Action Competition Claim Against MasterCard
Target Corporation Cybersecurity-Related Derivative Litigation Dismissed
For some time now, many commentators, including me, have been predicting that cybersecurity-related litigation could become an important part of the D&O litigation environment. And that may yet happen. For now, however, the results in the recent cybersecurity-related cases have been, from the plaintiffs’ perspective, not particularly promising. On July 7, 2016, in the latest of these cases to hit the skids, District of Minnesota Judge Paul Magnuson, in reliance on the report of the special litigation committee appointed to investigate the claims and in the absence of opposition from the plaintiff, granted the motions of the special litigation committee and of the defendants and dismissed the consolidated cybersecurity-related derivative litigation that had been filed against Target Corporation’s board. As discussed below, the plaintiffs’ track record in this type of litigation has been poor, which does raise the question whether this type of litigation will become a significant phenomenon. A copy of Judge Magnuson’s order in the Target Corp. case can be found here. Continue Reading Target Corporation Cybersecurity-Related Derivative Litigation Dismissed
D&O Liability Exposures: Developments in the US and Globally
The following post previously appeared as an article in a recent issue of the Munich Re publication, Schadenspiegel. The article also appeared as a post on the Munich Re website, Topics Online. The article is reprinted here with the permission of Munich Re.
The liability arena for corporate directors and officers has long been characterized by a dynamic claims environment. In the past, the highest-profile developments in this arena have taken place primarily in the United States, due to long-standing patterns of litigiousness there. However, in the last few years changes in applicable laws and in the regulatory environment, as well as a series of high-profile scandals, have increased the significance of D&O insurance across the world. Continue Reading D&O Liability Exposures: Developments in the US and Globally
Guest Post: India – Is D&O Liability Insurance Mandatory?
In the following guest post, Umesh Pratapa takes a look at status in India of D&O insurance in light of The Companies Act of 2013. The guest post also reviews the prudential considerations supporting the purchase of D&O insurance for Indian companies. I would like to thank Umesh for his willingness to publish his article on my site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Umesh’s guest post. Continue Reading Guest Post: India – Is D&O Liability Insurance Mandatory?
First Round of Tenth Anniversary Frisbee Photos
The time has come to publish the first round of Frisbee Photos! Readers may recall that in connection with The D&O Diary’s recent tenth anniversary, I offered to send out a D&O Diary tenth anniversary Frisbee to anyone who requested one – for free — but only if the Frisbee recipient agreed to send me back a picture of the Frisbee and a description of the circumstances in which the picture was taken.
We have mailed out dozens and dozens of Frisbees (and I would be remiss if I did not pause here to express my thanks to Mrs. D&O Diary, who organized the Frisbee mailing process). The early picture returns are starting to come in. If the first batch of pictures is any indication, the collective Frisbee photos will constitute a formidable gallery. Here a few pictures culled from the first batch. Continue Reading First Round of Tenth Anniversary Frisbee Photos