Back in November, 2008, Deloitte sued its former vice chairman for trading in securities of the firm’s audit clients. The SEC has filed its case against Thomas Flanagan and included his son, Patrick Flanagan. The SEC alleged Flanagan traded in the securities of multiple Deloitte clients on the basis of inside information that he learned … Read more »
Dealing with Losses From the Madoff Fraud
One of the many repercussions of the Madoff fraud is how to treat investors who had money in his Ponzi scheme. There has been plenty written about how the trustee is treating the direct investors. He is only treating net cash. If you took out more cash than you put in, you are on the … Read more »
The First Attack on the Accredited Investor Standard
Many of the provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act merely provide for future regulatory framework. That it is in part true for the changing definition of “accredited investor” under the Securities Act. The other part is that the definition changed once President Obama signed the bill into law ten days … Read more »
Snow and Ice in August
It’s August, but here in Massachusetts we need to start thinking about snow and ice. Not because of climate change, but because of the Supreme Judicial Court. They just issued a ruling that changes the standard of liability for snow and ice hazards. The standard in the Massachusetts had been that a property owner could … Read more »
Compliance Bits & Pieces for July 30
Here are some recent stories that I found interesting: When Compliance and Legal Functions Collide by Matt Kelly in Compliance Week‘s Big Picture The general counsel is still the boss. Yes, I know, the revised U.S. Sentencing Guidelines say companies should have an independent compliance function, with a chief compliance officer who answers to the … Read more »
That’s a $h!#ty Policy
On the front page of today’s Wall Street Journal is story about one of the fallouts from Goldman Sachs’ recent problems with the SEC: George Carlin Never Would’ve Cut It at the New Goldman Sachs. One of the most sensational bits of Goldman Sachs fiasco was an email from a Goldman executive “[B]oy that, timberwolf … Read more »
What Do You Get For Cooperation with the SEC?
More likely to get sanctioned. Reduction of $30.3 million in penalties when you initiate your own investigation. Reduction of $609,000 in company penalties for each week earlier the statement is announced the public. Reduction of $112,000 in personal penalties for each week earlier the statement is announced the public. We in the compliance field have … Read more »
Fund Manager Fraud for Exceeding Leverage Limits
It turns out that failing to adhere to your investment guidelines can not only get you sued by your investor, it can get you sent to jail. Mark D. Lay ran a hedge fund whose sole investor was the Ohio Bureau of Worker’s Compensation. The fund agreement had a non-binding 150% leverage guideline. Lay apparently … Read more »
FCPA Opinion Procedure Release 10-02
A continuing quirk of the Foreign Corrupt Practices Act is the ability to ask the Department of Justice whether a particular set of facts would be a violation of the Act. Given all of the recent FCPA activity I expected there to be an uptick in Opinion Procedure Releases under the FCPA. So far that … Read more »
Sisyphus and the Corporate Ladder
What do you do you when you finally get that rock to stay at the top of the mountain? Courtesy of Saturday Morning Breakfast Cereal. More: The Myth of Sisyphus and Camus Read more »