Earlier this week, I held a prep call with panelists for next Wednesday’s webcast – “Impact of Internal Controls on M&A” – and I quickly became convinced that if you are involved with deals at all, you won’t want to miss this one! Among other topics, the panelists – including SEC Deputy Chief Accountant Andy Bailey, John Huber, Teri Iannaconi and more – will cover:
– How to determine the costs of a company’s buying a target that has known material weaknesses or has uncertainty as to whether there are material weaknesses? How do these costs differ pre-and post-404?
– What is the process of how dealmakers deal with internal controls diligence and related representations and warranties? What might acquirors – and their auditors- be looking for when they diligence a possible target’s internal controls?
– In what contexts – and why – can internal controls impact bid price?
– In what contexts – and why – can internal controls prejudice US public company bidders?
– What are the costs and benefits of taking advantage of the internal controls “M&A exemption” provided by the SEC Staff?
Google and Its GC Settle Enforcement Case Over Option Registration
Yesterday, the SEC Enforcement Division announced a settlement with Google and its General Counsel for a Section 5 violation – because $80 million in options were granted before the company’s IPO in a manner that triggered registration obligations which weren’t met by the company.
First, Google’s GC apparently tried to rely on the Rule 701 exemption even though no more than $5 million in options can be granted in a 12-month period under its terms. Then, according to the SEC’s administrative order, the GC concluded that a sufficient number of options had been issued to employees who were accredited investors under Rule 506 to avoid exceeding Rule 701’s $5 million threshold – and finally he tried to rely on a Section 4(2) exemption.
Apparently, this is the first time the SEC has brought an Enforcement action for violating Rule 701. Note that there was no 102(e) proceeding or Part 205 allegations (although Google wasn’t public at time of violations, SEC could have brought 205 allegation due to ongoing violations).
The damning aspect of the SEC’s settlement (which was a cease & desist with no fines) is summed up in this excerpt from the SEC’s press release:
“The Commission’s order further finds that Google’s General Counsel David Drummond, 41, of San Jose, Calif., was aware that the registration and related financial disclosure obligations had been triggered, but believed that Google could avoid providing the information to its employees by relying on an exemption from the law. According to the Commission, Drummond advised Google’s Board that it could continue to issue options, but failed to inform the Board that the registration and disclosure obligations had been triggered or that there were risks in relying on the exemption, which was in fact inapplicable.”
As SEC Enforcement Director Steve Cutler promised in a speech in late September, the SEC clearly is targeting securities lawyers at a pace that is unprecedented. Be careful out there.
Notes From The Dura Argument on Loss Causation
Below is an excellent blog from Wilson Sonsini’s Lyle Roberts who writes the excellent The 10b-5 Daily blog regarding Wednesday’s Supreme Court argument in the important Dura Pharmaceuticals v. Broudo case concerning loss causation:
Oral argument in the Dura Pharmaceuticals v. Broudo case took place in the U.S. Supreme Court this morning (links to all of the main briefs can be found here). The question presented was: “Whether a securities fraud plaintiff invoking the fraud-on-the-market theory must demonstrate loss causation by pleading and proving a causal connection between the alleged fraud and the investment’s subsequent decline in price.”
Chief Justice Rehnquist did not attend the hearing, but reserved his right to participate in the decision. Argument was heard from counsel for Dura Pharmaceuticals, the U.S. government (in support of Dura’s position), and Broudo. Here are a few notes on the main issues that were discussed:
Overall Impressions – Predicting how the Supreme Court will rule based on oral argument is a tricky business. That said, the Court appeared likely to reject the 9th Circuit’s price inflation theory of loss causation. Whether the Court will attempt to lay out what a plaintiff in a fraud-on-the-market case must plead as to loss causation to survive a motion to dismiss, however, was unclear.
Dura’s Position – Consistent with their briefs, Dura’s counsel argued that a loss only occurs when a corrective disclosure is made. Justice Breyer posed the following hypothetical – a company says it has found gold and its stock price is $60; the company later discloses that no gold has been discovered and the stock price declines to $10; the loss is clearly $50. But what if the gold never existed but the company finds platinum and the stock price rises to $200? Are plaintiffs permitted to show that the stock price would have been $250 if the company had also found gold? Dura’s counsel did not disagree that it might be possible to demonstrate loss causation under these circumstances, but argued that there would need to be a disclosure about the absence of gold.
Difference Between Dura And Government? – Justice Ginsburg, in particular, noted that there appeared to be a difference between Dura’s position and the one put forward by the government, because the government allowed for the possibility that something other than a corrective disclosure might be sufficient to establish loss causation. Justice Scalia emphasized that plaintiffs simply need to show that the market knows the truth, however that truth comes to be revealed.
Government’s Position – The government’s counsel then argued that to establish loss causation, plaintiffs must demonstrate that the price inflation caused by any misrepresentation was removed or reduced by the dissemination of corrective information (but there is no need for a formal disclosure from the company).
Rule 8 vs. Rule 9(b) – Having established its basic position, the government’s counsel found himself in the awkward position of spending most of his time defending a proposition of law that was not really briefed in the case. At least two justices, Ginsburg and Stevens, appeared to feel strongly that the pleading of loss causation is only subject to the notice pleading requirements of Fed. R. Civ. P. 8. The government’s counsel countered that, as an element of fraud, loss causation must be plead with particularity pursuant to Fed. R. Civ. P. 9(b) and it was important to make an assessment about loss causation at the pleading stage of a case before defendants are forced to pay millions in discovery costs or settlement of the claims.
Need A Viable Theory of Loss? – Even if Broudo was only required to engage in notice pleading on the issue of loss causation, Justice Breyer questioned whether the complaint still needed to articulate a viable theory of loss. Broudo’s counsel conceded that the complaint could have contained more on this point, but later noted that the pleading was in conformity with 9th Circuit law at the time it was filed.
When Does Loss Occur? – As expected, a large portion of the argument concerned whether the 9th Circuit’s price inflation theory of loss causation (i.e., that the loss occurs, and a viable claim exists, at the time the purchaser buys the stock at an artificially inflated price) is correct. Broudo’s counsel argued in favor of the 9th Circuit’s position, but conceded that to show recoverable damages the plaintiffs would eventually have to establish that the inflation in the stock price was reduced or eliminated. A number of justices expressed skepticism that there could be any cause of action for fraud prior to actual damages having been suffered. Justices Souter and Scalia suggested that the inflation in the stock price simply established the limit of the potential loss, not that any loss had occurred. Justice Scalia also wondered whether the entire case was simply a “great misunderstanding,” since the parties both agreed that plaintiffs would eventually have to establish that the inflation in the stock price was reduced or eliminated. Broudo’s counsel noted, however, that there was also an issue over what plaintiffs needed to plead in their complaint on this issue and it may be possible for “lowered expectations” to result in stock price drops that are related to the fraud, even though the fraud is not revealed.
Yesterday, the US Supreme Court issued its opinion and syllabus on the Federal Sentencing Guidelines in a decision on two drug cases (note this document is subject to formal revision before official publication). This is a complex opinion with dissents.
Mike Holliday reports that the Court found that the Sixth Amendment – regarding jury trials – as construed in the Blakely case applies to the Sentencing Guidelines and, in light of this holding, that two provisions of the Sentencing Reform Act that have the effect of making the Guidelines mandatory must be invalidated. The syllabus states that as so modified, “the Act makes the Guidelines effectively advisory, requiring a sentencing court to consider Guidelines ranges . . . but permitting it to tailor the sentence in light of other statutory concerns . . .”
Broader interest in the case has to do with companies having an “Effective Compliance and Ethics Program” as a mitigating factor in the sentencing of organizations under the Federal Sentencing Guidelines. Mike thinks that this decision does not change the desirability for companies to maintain these programs – but we are both interested to see what lawyers following the case think.
The Compensation Disclosure Blog
Very happy to announce that a panelist from today’s CompensationStandards.com webcast – Mark Borges of Mercer Consulting – has commenced blogging in “The Compensation Disclosure Blog.”
Through his blog, Mark will assist you to understand the evolving nature of compensation disclosure during this proxy season – and highlight examples as he sees them. Thus, the goal is to maintain this blog only for a few months – the first “limited time only” blog! Feels like I am seeding new bloggers on almost a daily basis now and loving every minute of it.
If you will participate in today’s webcast and plan on taking notes, print out these questions that the panelists will address.
NYSE Updates Equity Compensation FAQs
Yesterday, the NYSE posted updated FAQs regarding Section 303A.08, which requires shareholder approval for equity compensation plans. The updated FAQs relate to:
– whether amendments to equity compensation plans to comply with Section 409A of the Internal Revenue Code require shareholder approval (C-15)
– whether shares available under a plan of an acquired company may be used after the acquisition for grants to persons who were non-employee directors or consultants of the acquiring company or its subsidiaries prior to the acquisition (E-6)
– revised answer to clarify that references to consultants in the rule include anyone for whom the company uses or would be permitted to use a Form S-8 registration statement to register the equity granted (F-1)
The LA Times reports that a group of Wall Street banks has challenged the settlement announced last week between 10 former WorldCom directors and plaintiffs. The 16 banks were among the underwriters of WorldCom securities and are also defendants in the lawsuit, which is scheduled to go to trial on February 28th.
In a letter to U.S. District Judge Denise Cote, the banks argued that the settlement with the former directors was inappropriate, among other reasons, because it was reached too close to the scheduled trial date, could leave the remaining defendants to shoulder too much liability and could be scuttled by the insurance companies, which under certain circumstances could back out of the agreement.
In a brief hearing yesterday, the Judge declined to grant a request by plaintiffs that the 10 former directors be immediately excused from the case. Instead, she asked both sides to quickly submit briefs further detailing their arguments. She said the trial would begin as scheduled, whether the 10 former directors have been excused from the case at that point or not.
For more analysis on what the WorldCom settlement means for directors’ liability, read this interview with Andy Edison on the WorldCom Litigation Settlement.
Tomorrow’s CompensationStandards.com Webcast
It truly has been a madhouse as many folks have been signing up at the last minute for tomorrow’s webcast: “What NOW Needs to Be Disclosed in the Proxy Statement.” Don’t forget that the webcast is earlier than our typical webcasts – at noon eastern on Thursday – and the audio archive will be available soon after its complete in case you missed it live.
Our HQ has been swamped with so many requests that now, in order to ensure access, you are advised to sign up directly online.
And, to avoid user ID and password hassles, you can take advantage of the simple “Firmwide Rate” of $1995, by which everyone in your company or firm can access all the resources on the website (with exception of 10/20 conference archives which now only costs $95 per person). And all the 2005 rates for CompensationStandards.com entitle subscribers to 50% off for the 2005 compensation conference to be held in the Fall, either live or by video webcast.
Class Action Securities Fraud Lawsuits up in 2004
According to a report released last week by the Stanford Law School Securities Class Action Clearinghouse (in cooperation with Cornerstone Research), the number of federal securities fraud class actions filed in 2004 increased only moderately from 2003 levels, rising to 212 companies sued from 181 – but the decline in stock market capitalization corresponding to these actions increased dramatically.
The number of lawsuits alleging violations of GAAP remained relatively constant in 2004, declining to 102 (48%) in 2004 from 107 (59%) in 2003. Further, several of the large dollar losses observed this year arose as a consequence of product market developments that had material adverse stock market price effects.
The report found that the most active federal circuits as measured by the number of issuers sued in 2004 were: the Ninth Circuit (including California) with 64 filings, an 83 percent increase over 2003; the Second Circuit (including New York) with 45 filings; and the Eleventh Circuit (Alabama, Florida, and Georgia) with 20 filings.
Pension Reform On the Way
On Monday, Dept. of Labor Secretary Chao announced the administration’s plan to reform funding requirements for private, single employer defined benefit pension plans and to raise the premiums paid to the Pension Benefit Guaranty Corporation. Here is the DOL press release – and a fact sheet put out by the DOL.
The following outlines the Administration’s plan in general terms: It is based on three main principles: (1)Reforming the funding rules for private defined benefit pension plans to ensure that employers fully fund their retirement promises. (2) Reforming the premiums that private defined benefit plans pay to the federal insurance program to better reflect the real risks and costs. (3) Increasing the disclosure of information about private defined benefit pension plans to workers, investors and regulators to ensure greater transparency and accountability.
Some of the proposed changes are:
– Companies would be required to make up funding shortfalls within a reasonable period, e.g., 7 years.
– Pension liabilities would be determined using corporate bond rates, based on using bond durations that match the schedule of when pension benefits are to be paid.
– Premiums to the PBGC would initially be increased to $30 per worker from the current $19 and be indexed into the future, for flat rate premiums.
– Underfunded plans would pay risk-based premiums based on plan underfunding.
We have posted the 56-page settlement as an “Alert” on the home page of TheCorporateCounsel.net. And analysis of the settlement from Wachtell Lipton and Davis Polk are posted under “The Latest” on GreatGovernance.com.
Complimentary Special Supplement of The Corporate Counsel
On CompensationStandards.com, we have posted the Special Supplement to the Nov-Dec issue of The Corporate Counsel on a complimentary basis. It provides a great recap of our October 20th executive compensation conference.
Sarbanes-Oxley Q&A with Treasury Secretary John Snow
Last week, the Treasury Secretary did this interview with Business Week on corporate reform. He seems to suggest that regulators have gone too far in enforcing corporate reform and there is a need for more balanced enforcement – but he also believes SOX shouldn’t be modified.
Download Streaming Audio for Your Car
For those that wish to listen to one of our audio webcasts in your car – and I won’t make any “pinhead” jokes as I like to listen to legal mumbo jumbo in the car myself – you can burn a CD from streaming audio by using RecAll Pro, available on Sagebrush.com.
For folks with MP3 players, have you seen All Sound Recorder XP? You can record streaming audio (e.g., Sirius or XM radio, PLI or other webcasts) off your PC and save it as an MP3, which you can transfer to your MP3 player.
On the heels of the announcement that WorldCom directors agreed to pay $18 million out of their own pockets to settle a lawsuit, it was announced that Enron directors have agreed to pay $13 million personally as part of a settlement reached in October (like the WorldCom settlement, the Enron settlement still needs court approval).
We will be posting analyses of these settlements soon in the “Hot Topics” area of CompensationStandards.com. And we have launched a “Form 8-K Disclosure” Practice Area on that site that includes a number of recently filed 8-Ks that are relevant to the Bonus Segment of the January 13th webcast – “What NOW Needs to Be Disclosed in the Proxy Statement” – during which Alan Dye will cover the SEC Staff’s latest positions on 8-K compensation disclosures.
To gain access to this critical webcast, enter a No-Risk Trial today! If you are undecided, don’t forget our unconditional full refund policy: If at any time you are not completely satisfied with CompensationStandards.com, simply tell us and we will refund the entire cost of the year’s subscription.
Slow Death for CalPERS and CalSTERS?
Last week, it was reported that California Governor Schwarzenegger endorsed plans to partially phase out the California state defined-benefit public pension plans (e.g., CALPERS and California State Teachers’ Retirement System) to 401(k) type plans. A state lawmaker and a taxpayers group has filed a proposed ballot initiative that would require new hires to participate in 401(k) type defined-contribution plans, possibly as early as 2007. Also, current employees would be able to transfer their retirement benefits into a 401(k) type plan.
This movement towards defined contribution plans has profound implications for shareholder activism as state funds traditionally have been among the more active investors – and money managers for mutual funds have not been.
Another Day, Another Blog
On CompensationStandards.com, Mike Melbinger of Winston & Strawn has picked up the mantle and begun blogging on his Melbinger’s Compensation Blog. Below is one of Mike’s first entries:
Open Market Purchases Under Formula Plans
In drafting a new equity incentive plan for an NYSE-listed client, we encountered a question about the formula plan rules under FAQ D-1 of the shareholder approval rules. The company wants (and provides in its shareholder approved plan) to add back shares that are repurchased by the company using the cash paid upon the exercise of options. The question was: how closely do we need to match the open market purchases we make (or have made) with the cash we have received (or will receive) from option exercises?
Specifically, we wondered:
– whether there was some temporal requirement to match the proceeds with the purchases (i.e., could we get replenishment credit for shares purchased in the open market in the second quarter of 2004, even if there were no proceeds from option exercises until the third quarter of 2005)?
– Do we only look at this on a quarter-by-quarter basis, or a year-by-year basis, and match cash proceeds and purchases within the quarter (or year) without regard to the specific date on which the proceeds/purchases occurred?
– If there were excess cash proceeds for any quarter, could we carry those over to the next quarter? Could we carry over excess purchases?
– Could we take cash proceeds from a current quarter and match them against purchases made in a prior quarter?
We discussed these questions with an attorney for the NYSE, who advised that company can choose any logical, workable arrangement that it desires. We agreed that the company would want to include in the plan or committee procedures, some specifics about cash received during what period, purchases made during what period, etc. – so it can accurately ascertain how many shares are to be considered available under the plan at any given time.
We also considered that it might be difficult to match purchases made in a prior period with cash received in a subsequent period, because the company would be making purchases without knowing how much cash it had to fund them.
However, even in this situation, the company probably could create a formula that includes in the plan only such number of previously purchased shares as are covered by subsequently collected money.
The “formula” we would include in the plan is that there will be added to the plan a number of shares that can be purchased in the market by the company with the cash received from option exercises.
Now that such disclosures are foremost on everyone’s minds, we are updating – on a daily basis! – our list of the latest disclosures filed by companies that have disclosed that they have identified material weaknesses and/or significant deficiencies. This list resides in our “Internal Controls” Practice Area.
And we are happy to announce that David Lynn, Chief Counsel of the SEC’s Division of Corporation Finance has just been added to our next webcast: “Demystifying Internal Controls Disclosures.”
FASB Under Fire on the Hill
According to the January 4th issue of the Congressional Record (at pg. H35), language has been included at Congressman Oxley’s request that changes the jurisdiction over the FASB from the Commerce Committee to the House Financial Services Committee.
For decades, the Commerce Committee has had oversight responsibility for the FASB and generally has been supportive of the FASB. On the other hand, the House Financial Services Committee’s leadership has led the Congressional efforts to block the FASB rule on expensing options – and in the past, also opposed other FASB efforts, such as fair value accounting for derivatives.
A few years back, when Rep. Billy Tauzin was named chair of the Commerce Committee, there was a memorandum of understanding between him and Rep. Oxley that transferred jurisdiction of the SEC from the Commerce Committee to the Financial Services Committee. However, at that time it was agreed that Tauzin would maintain jurisdiction over the FASB. However, with Tauzin leaving the House, Oxley once again pressed for – and now has received jurisdiction over the FASB.
By the way, those of you interested enough to read the Congressional Record will only see this obscure statement: “9. Jurisdictional Issues. Based on discussions with the relevant committees, the further mutual understandings contained in the final two paragraphs of the “Memorandum of Understanding Between Energy and Commerce Committee and Financial Services Committee” dated January 30, 2001, shall no longer provide jurisdictional guidance.”
“Conference Notes” Practice Area
As part of the New Year’s cleansing of TheCorporateCounsel.net, we have created a “Conference Notes” Practice Area – with recent additions including the ABA’s Fall Meeting (from Perkins Coie) and the AICPA National Conference (from Davis Polk).
Note that the clean-up of our home page didn’t result in the removal of any content. Some of it has just been moved to more logical spaces (such as the “Rule 144 Q&A Forum” being moved to the toolbar) – and we created some new items, like the “Hot Topics Box.”
We have just added a special bonus segment to the January 13th webcast on CompensationStandards.com – “What NOW Needs to Be Disclosed in the Proxy Statement” – during which Alan Dye will cover the SEC Staff’s latest positions on 8-K reporting of salary and bonuses. In response to many requests for clarification in this murky area, Alan will provide practical guidance and examples of what to do.
Apart from this bonus, join Jesse Brill, Ron Mueller of Gibson Dunn and Mark Borges of Mercer Consulting as they provide the latest guidance on how to overhaul your upcoming disclosures in response to Alan Beller’s speech, such as how to deal with airplane and other perks and what to include in the compensation committee report. Here are Questions to Ask NOW When Drafting Proxy Disclosures!
To gain access to this critical webcast, enter a No-Risk Trial today! If you are undecided, don’t forget our unconditional full refund policy: If at any time you are not completely satisfied with CompensationStandards.com, simply tell us and we will refund the entire cost of the year’s subscription.
Personal Liability for Ten Ex-Worldcom Directors
Yesterday, ten former outside directors of WorldCom tentatively agreed to pay $54 million – including $18 million out of their own pockets – to settle part of a class-action securities lawsuit. The proposed deal – which still needs to be approved by the judge – would be the largest of its kind and requires the 10 directors to pay more than 20% of their combined net worth. The company’s D&O insurance carriers would pick up the remaining $36 million. (In comparison, $1.5 million was paid by 12 former Enron outside directors from their own pockets in May 2004 – which was unprecedented in itself.)
What is particularly noteworthy is that none of the 10 settling directors were alleged to have directly participated in the accounting fraud that led to WorldCom’s collapse. The lawsuit is slated to go to trial soon, with the remaining defendants including more than 15 investment banks that underwrote WorldCom’s bond deals before the company collapsed – and two remaining outside directors who are discussing a similar settlement.
By the way, I am in the process of conducting an interview with someone on the notable December 15th opinion and order in the WorldCom litigation – here is the 159-page opinion if you want to get a preview. This is posted in our “Securities Litigation” Practice Area.
Inside the Beltway: Trade Groups, Firms Push to Ease Tough Federal Scrutiny
A member emailed me a link to this Washington Post article yesterday about lobbying on the hill against Sarbanes-Oxley and other laws, along with a note that said: “Have lobbyists have found a way to dine out on SOX indefinitely?”
For example, I just added this new 21-page checklist from Davis Polk, which includes a variety of sample Section 302 certifications (remember that companies will need to revise what they have used in the past, whether they will be filing 404 management reports for the first time or taking advantage of the transitional 404 deadline relief that the SEC passed last month), a great 404 compliance chart, and more. If you have anything that might be useful to others for this proxy season, please let me know.
SEC Acts on “Reporting Out” Case
Yesterday, the SEC filed civil fraud charges against TV Azteca and three current and former TV Azteca officers and directors for allegedly engaging in an elaborate scheme to conceal the Chair’s role in a series of transactions through which he personally profited by $109 million. The SEC complaint also alleges that the officers sold millions of dollars of TV Azteca stock while the Chair’s self-dealing remained undisclosed to the market place.
You might recall that this situation involves a case of “reporting out” by the company’s outside counsel. Here is what the SEC’s press release states about that:
“TV Azteca filed the false reports with the SEC, concealing Salinas’ involvement in the Unefon debt transactions, despite receiving advice from its U.S. counsel that these transactions were material, reportable transactions under U.S. federal securities laws. While the company provided general disclosure of the transactions, it refused to reveal information crucial to investors: that Salinas was behind the transactions and personally profited from them. TV Azteca’s resistance led to the eventual resignation of its U.S. counsel, who told the company’s board of directors and management that it was resigning consistent with its obligations under Section 307 of the Sarbanes-Oxley Act.”
Below is an interesting summary of Equilar’s analysis of FAS 123 assumptions for how large companies value their options (as disclosed in their proxy filings). As footnote disclosures begin to appear in income statements by mid-2005 (for those companies who haven’t adopted FAS 123 already), focus will turn to their assumptions. Equilar looked at the most recent 3 years of filings for 472 companies in the S&P 500, focusing particularly on expected volatility assumptions as well as expected terms.
Here are the highlights of Equilar’s survey:
a. Expected Term Assumptions
– For expected term assumptions there has been little change in the past three years with the median (5.0 years), the 25th percentile (4.5 years) and the 75th percentile (6.0 years) remaining constant for each of the past three years.
– While there has been little change at the summary level, this masks the fact that over 56.3% of companies have changed their assumptions in the last three years; 28.8% of S&P500 companies increased their terms with a median increase of 17.5% and 27.5% of S&P500 companies decreased their terms with a median decline of 19.1%.
b. Volatility Assumptions
– For expected volatility assumptions, there has been an increase in the median volatility from 35.7% in 2001 to 36.5% in 2003. The 25th percentile and 75th percentile levels were little changed at 29.7% and 47.0% respectively.
– As one would expect, almost all companies (91.3%) had a change in their expected volatility assumptions over this three year period; 46.5% of companies increased their expected volatility assumptions with a median increase of 10.2% and 44.8% of companies decreased their expected volatility assumptions with a median decrease of 10.0%.
Want to Improve Your Internal Controls – Try Not Performing Your Duties?
Who would have thought that internal controls could be improved by
adopting a board-approved policy requiring that officers and employees not
perform their duties? Check out this December Bulletin from California’s Department of Financial Institutions regarding its position that institutions should relieve officers and employees from their duties for two consecutive weeks each year.
While I understand the Department’s logic, it struck me as amusing that a government agency would criticize someone for failing to prohibit its officers and employees from performing their duties. And although this is amusing, it would not be surprising for type of policy to find its way into the internal controls morass at public companies under circumstances for which it might make sense. Thanks to Keith Bishop for pointing this tidbit out and all this analysis!
Perils and Promises of Electronic Data Discovery
In the world we live today, I’m not sure we can learn enough about the perils of electronic discovery. Learn more in this interview with Tom Barnett on the Perils and Promises of Electronic Data Discovery.
Happy New Year! Here is my first annual – and admittedly lame – attempt at an “In/Out” List:
– Internal Controls/Controlling CEOs
– Just Vote No Campaigns/Shareholder Access
– Real-Time Disclosure/Abstaining from Disclosure
– Pay-As-You-Go/Pay-When-Ya-File
– SEC Comments on the Web/SEC Comments by FOIA Request
– Independent Auditors/The Company’s Auditors
– Tally Sheets/Mega-Grants
– Bloggers (voted “Men of the Year” by ABC!)/Weekly Print Newsletters
I know, not really off to a rousing start this year…if you have any suggestions, please email them to me and I will add them to this list.
Time to Renew!
As all our subscriptions are based on a calendar year, some of your subscriptions may have expired over the weekend. You can renew online below for any of these fine print or online publications:
Year in Review for NYSE and NASD – and Looking Forward for PCAOB
Here are memos reviewing what happened in 2004 at the NYSE and the NASD.
Last week, the PCAOB approved a revised budget for 2005 – which includes nearly a 50% increase in staffing. This press release notes that the PCAOB might have to increase its already relatively high wages to attract new hires (fyi, the PCAOB pays considerably more than the SEC to its staffers).