D&O Liability

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On July 27, 2007, the Securities and Exchange Commission posted two separate proposing releases that relate to shareholder access to a public company’s proxy ballot in connection with director elections.  The unusual aspect of these releases is that they represent alternative and very different approaches to the same issue. 

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Read More SEC Releases Competing Proposals For Shareholder Participation In Contested Elections

By Order dated July 16, 2007, Judge Kaplan confirmed his previous holding, in connection with KPMG tax shelter litigation, that the government’s interference with KPMG’s payment of the legal fees of its employees and former employees (under the now-superseded Thompson Memo) violated the employee’s constitutional rights. 

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Read More Further Analysis of the KPMG Dismissal

On July 19, 2007, Judge Breyer deferred, for the second time, his decision on the pending motion to dismiss in the Brocade stock options backdating trial.  As discussed in prior posts, see below, the government’s first criminal trial of stock-options backdating conduct began last month against ex-Brocade CEO Greg Reyes. 

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Read More The Brocade Trial: Judge Breyer Postpones Decision On Motion To Dismiss

The Chairman of the United States Securities and Exchange Commission told reporters recently that the SEC is close to making announcements regarding ongoing stock options investigations. The Chairman said that the SEC believes it has “rounded up” most of the companies that improperly backdated options. 

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Read More SEC On The Verge Of Making Announcements Regarding Stock Options Investigations

As previously discussed here, on July 2, 2007, Judge Lewis Kaplan of the S.D.N.Y. requested, to assist in his decision on defendants’ motions to dismiss, that the federal prosecutors in the KPMG tax shelter case estimate the reasonable costs of a defense for the KPMG partners.  The U.S. Attorney’s office recently responded. 

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Read More Update: Federal Prosecutors and Defense Counsel Estimate Criminal Defense Costs for KPMG Partners

With Judge Breyer having postponed ruling on his motion to dismiss until at least July 19, ex-Brocade CEO Greg Reyes’ defense has gone forward this week.  Among the defense’s witnesses this week were two of Brocade’s founders, Seth Neiman and Paul Bonderson, and Jason Gold, formerly a fund manager at one of Brocade’s top investors. 

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Read More The Brocade Trial: Reyes Defense Goes On The Offensive — “Stock Options Costs Are Irrelevant To Investment Decisions”