Legal/Regulatory

ARTICLEBeing "Best Practice" January 24, 2012One of the most positive, long-lasting effects of the Sarbanes-Oxley law—and the corporate responsibility movement it prompted—has been the significantly increased board focus on applying “best practices” to boardroom conduct. Yet the concept is prone to misunderstanding and misapplication; just what are best practices, what do they mean and what actual benefit do they provide? And what are the consequences for the board that elects not to apply them? Ten years after the enactment of Sarbanes, those remain useful topics for boardroom discussion.

ARTICLEDon’t Expect Too Much From DOJ’s Upcoming New FCPA Guidance December 27, 2011After the last few years of extremely aggressive DOJ prosecutions under the Foreign Corrupt Practices Act (FCPA), corporate board members can be forgiven if they saw a ray of hope in the recent comments of Lanny Breuer, the head of DOJ's criminal division. Breuer, speaking at a November 2011 FCPA conference in Washington, announced that in 2012, DOJ would be releasing "detailed new guidance" on criminal and civil FCPA enforcement. So,what can corporate board members reasonably expect from DOJ's upcoming FCPA guidance? Not much.

ARTICLECompliance Risk Issues with Employer Health Plans December 21, 2011A well-known nationwide pharmacy retailer was recently subject to an enforcement action by the U.S. government costing them a settlement of $2.25 million, the implementation of a comprehensive written compliance program, and an agreement to submit to compliance audits every 2 years for 20 years. What type of violation could have resulted in such a severe punishment to the company? The answer may surprise you – these penalties were the result of reported HIPAA security breaches.

ARTICLEActivist Investor Success Leads to Scrutiny of Their Use of Derivatives December 05, 2011As activist investors have become the driving force behind the sale, spin-off, or restructuring of a number of public companies, directors have become increasingly focused on the array of tactics designed to put pressure on public company boards of directors. As activists are learning, with success comes scrutiny. One activist investor tactic that has drawn the attention of boards and regulators is the use of derivative securities. Since derivatives allow activists to create an economic position in a company’s shares that is far greater than the percentage of the shares they actually own, this scrutiny is certainly appropriate.