Stephen J. Crimmins, James K. Goldfarb and Sharon A. O'Shaughnessy write: Public company audit committee members might be forgiven for sweating potential SEC scrutiny of late. We examine the SEC's focus on audit committee members as gatekeepers, review three recent enforcement actions to highlight conduct that attracts the staff's attention, and suggest certain safeguards that might help mitigate the chance of an SEC investigation or charge.
The international financial and legal community has spent the past week focused intently on the initial reports arising from a journalistic investigation now known as the Panama Papers matter. The investigation centers on a leak of documents from Panamanian law firm Mossack Fonseca involving multiple high-profile and politically connected individuals — 140 politicians and 29 billionaires, according to some reports. Allegedly, the documents encompass some 40 years of the firm’s files. The International Consortium of Investigative Journalists — the group that has been investigating Mossack Fonseca — has alleged that the firm incorporated offshore shell companies for the benefit of famous individuals, including government officials and their relatives, in order to enable those parties to evade taxes, launder money, and dodge sanctions by hiding their money in the shell companies. Mossack Fonseca has stated that many of its clients come to Mossack through some of the largest financial institutions across the world.
How to combat security breaches is a pivotal question for the public, IT, and financial services industry. Legal issues arise when hard drives are stolen from someone’s office, a laptop goes missing, or a smart phone is lost. Or, even worse, when rogue external attackers acquire the name, phone number, social security number, driver’s license, credit card number, password, PIN, and/or other personal identifiers from a computer. Victimized customers tend to seek redress from the victimized financial institution whose data network was breached.
The class action bar eagerly awaited the U.S. Supreme Court’s January opinion in Campbell-Ewald Co. v. Gomez. At issue was what happens when a defendant makes a settlement offer or Rule 68 offer of judgment that would give the lead plaintiff full relief on his or her individual claims, but the lead plaintiff does not accept the offer. Does an unaccepted offer of full relief mean, as the defendant-petitioner argued, that a case or controversy no longer exists concerning the lead plaintiff’s individual claims, thereby divesting the district court of Article III jurisdiction, mooting the case and, in turn, mooting the putative class action? Or does the case simply continue because the court may not force a plaintiff to accept a settlement, as the plaintiff-respondent argued? The court had the potential to clarify a defendant’s ability to dispatch individual and class claims early, even when the lead plaintiff won’t take “yes” for an answer, to use the chief justice’s colorful quip.
Murphy & McGonigle, P.C. announced today that Howard Kramer has joined the firm as a shareholder in its Washington office. Mr. Kramer’s arrival continues the strong trend of top regulatory and litigation talent joining the financial services boutique law firm founded in 2010.
In January, two government entities issued important position papers on blockchain technology within days of each other. Both supported the technology's potential for reducing costs, improving security and transparency, and enhancing financial services industry logistics. One was issued by the United Kingdom's powerful Government Office for Science, chaired by the country's chief scientific adviser, Mark Walport. The other was issued by Vermont, a state with a lesser claim to regulatory leadership and located far from any financial center.