Boards Must Rigourously Exercise Their Oversight Function

“[T]o satisfy their duty of loyalty, directors must make a good faith effort to implement an oversight system and then monitor it.” Marchand v. Barnhill, 212 A.3d 805 (Del. 2019) Clovis Oncology’s stock dropped sharply in 2015 when it disclosed poor clinical trial results for Rociletinib a promising experimental drug for the treatment of lung … Read more »

SEC Is Not Happy With How Firms Are Handling Principal Trading and Agency Cross Trading

The SEC’s Office of Compliance Inspections and Examinations issued a Risk Alert describing failures by investment advisers to comply with regulatory requirements when engaging in principal and agency-cross transactions.  OCIE found that many advisers did not even recognize that they were engaging in (1) a principal transaction by buying or selling to a client or (2) … Read more »

Blame It On the Junior Compliance Associate

“The compliance associate had no trading experience and no formal training to conduct the review required by the rule, such as training related to the analysis of financial statements and other information.” Rule 15c2-11 of the Exchange Act requires broker-dealers to obtain, review and maintain information about the issuer before initiating or resuming the publication … Read more »

DOJ’s New Evaluation of Corporate Compliance Programs

The Justice Department released a refreshed set of guidelines on how prosecutors should evaluate corporate compliance programs. The Principles of Federal Prosecution of Business Organizations in the United States Attorney’s Manual describe factors that prosecutors should consider in conducting an investigation of a corporate entity, determining whether to bring charges, and negotiating plea or other … Read more »