Recently, there have been several news accounts about how the SEC is threatening a first-ever lawsuit against a lawyer hired to help with a company’s internal accounting probe. Below is some paraphrasing from a Bloomberg article on this topic:
Exactly what the lawyer did to provoke the SEC isn’t clear. The company issued a press release last year saying the probe the lawyer conducted found no “intentional wrongdoing by management.” About a month later, Endocare said it was under investigation by the Justice Department and the SEC, which has since threatened to sue the company and its former managers.
The SEC has encouraged corporate boards to hire outside legal advisers, saying their findings help the agency root out fraud quickly. If the SEC brings a suit against the lawyer in question, it may define how far lawyers have to go to police a company after assuming the role of investigator, according to former SEC officials, who said the agency has never sued a lawyer for mishandling a corporate probe.
If the SEC proceeds against the lawyer in this case, other lawyers may balk at taking on company investigations. “This looks like an expansion of the government’s crackdown on gatekeepers, particularly accountants or lawyers who bless a company’s prior conduct,” said William McLucas, a former SEC enforcement chief, who conducted the internal investigation at Enron. “It ratchets up the risk for lawyers doing inquiries that are held out to the public as independent.”
Guidance for Proxy Compensation Tables
We have posted an updated version of the popular chapter regarding the proxy comp tables written by Alan Kailer of Jenkens & Gilchrist in Section II.C.3 of our 2005 Proxy Season Resource Center (and also posted on CompensationStandards.com).
Of course, for the “full monty” on what you need to know this year, you will want to tune in to the January 13th webcast – “What NOW Needs to Be Disclosed in the Proxy Statement” – on CompensationStandards.com. Here are Questions to Ask NOW When Drafting Proxy Disclosures!
I know that you wouldn’t forget about Festivus – my kids still whine about the aluminum pole by our hearth – but this is just a reminder in case you are Seinfeld-challenged (you know, the tradition of Festivus begins with the airing of grievances). Send a loved one an e-card reminding them of the Festivus holiday – and if you want to amp up your celebration this year, check out this Festivus Blog!
Of course, I am still mad at Ben & Jerry for their renaming their Festivus ice cream. Now I just add an asterik to “Gingerbread Cookie*” to indicate that its the flavor formally known as “Festivus.”