At yesterday’s open Commission meeting, the SEC proposed an alternative model of proxy delivery – a project the SEC calls “E-Proxy.” Here is the SEC’s press release and here is Chairman Cox’s opening statement. Below are notes from the open Commission meeting:
– Purpose of E-Proxy – The proposals are intended to facilitate the use of technology in the proxy solicitation arena. The SEC is proposing an alternative notice and access model for satisfying Rule 14a-3 that people performing proxy solicitations could rely on.
– Posting Proxy Materials– For an issuer proxy solicitation, the issuer must post proxy materials on a website that is publicly available (but the SEC’s website doesn’t count). The posted proxy materials must be substantially identical to any printed version of the proxy materials.
– Delivery of Notice – The issuer would be required to deliver a “notice of availability” at least 30 days prior to the shareholder meeting. Banks and brokers and their agents must forward the notice of availability to the beneficial shareholders. No other shareholder communications can be delivered with the notice, but a proxy card can be delivered with a notice (though it is not required).
– What is “Notice” – The notice must contain information about the meeting (date, time, place, etc.); the address of the website where the proxy materials are posted; a toll free phone number and an email address that shareholders may use to get paper versions of the proxy materials; and a description of matters to be acted on at the meeting and the recommendations of the company.
– Making Paper Available – The issuer must respond to any requests for paper copies within two business days.
– Proxy Card – The proposal would permit companies and other soliciting parties to deliver a proxy card with the notice of availability, but does not require them to do so. There was much discussion about concerns that shareholders would vote based on the information in the notice rather than in the proxy statement – and the proposing release will ask a series of questions about whether the proxy card should be delivered with the notice of availability or whether it should only be allowed to be delivered with the proxy materials.
– Non-Issuers Too – Soliciting persons other than issuers would also be permitted to follow the proposed alternative model as well – these persons would be required to deliver notice at least 30 days before the meeting or within 10 days of the issuer filing proxy materials. As permitted under current rules, other solicitors would not have to solicit all shareholders, but would be permitted to target certain shareholders.
– What is Not Affected – The SEC indicated that the proposed amendments would have no impact on any state law obligations regarding soliciting proxies or holding annual meetings, and would not apply to business combination transactions.
– When New Rules Will Be Effective – The rules probably will not be implemented in time for the 2006 proxy season. There is a 60-day comment period.
FASB Tentatively Relaxes Standard on Tax Benefits From Uncertain Positions
Last week, the FASB tentatively adopted a “more likely than not” threshold for uncertain tax positions. If adopted, this would be a much more workable position than the “best estimate” method proposed in July.
In working on its final interpretation of FAS No. 109 to be issued in the first quarter of 2006, the FASB voted to pull back from a standard espoused in an exposure draft that the best estimate of the impact of a tax position be recorded only if that position “is probable of being sustained on audit based solely on the technical merits of the position.”
Deferred Compensation: Actions Employers MUST Take by End of the Year
If you deal with deferred compensation, I hope you are aware of Section 409A and the latest proposed IRS regulations – and the laundry list of things you need to do by the end of December. If not, look no further than yesterday’s blog by Mike Melbinger who provides such a laundry list.
Yesterday, I went into a blogging frenzy on the DealLawyers.com Blog regarding the proposed – and controversial – transaction by Sovereign Bancorp, which has been amended so that the NYSE would allow it to proceed without a shareholder vote. Rather than repeat that lengthy blog, here are the primary topics I addressed to help you determine whether it’s worth visiting that blog:
– Dissecting the Shareholder Approval Issue
– The NYSE’s Trap for the Unwary?
– The Use of Treasury Shares or Cash to Avoid Shareholder Approval
– A Final Thought on State Law vs. SRO Regulation
Companies Go Public With Auditor Liability Caps
Yesterday’s WSJ carried an article with the title above that dissected the growing practice of limiting auditor liability through provisions in engagement letters. The article noted that two companies have disclosed the fact that they have limited their auditors liability in these proxy statements: Sun Microsystems’ proxy statement (page 17) and Silicon Graphics’ proxy statement.
Both companies disclose they have entered into an engagement letter with their outside auditor and then add: “That agreement is subject to alternative dispute resolution procedures and an exclusion of punitive damages.” Expect more investors to be seeking disclosure about limited liability to help them decide whether to ratify an auditor’s engagement – and I agree that this type of disclosure is a good idea.
Regarding the overarching point about the wisdom of limiting auditor liability, I have been urging companies for some time to push back on these so-called standard provisions in auditor engagement letters – learn more in our “Auditor Engagement Letter” Practice Area. Let me know if you have had any success pushing back recently!
UK Legislation on Auditor Liability and Engagement Letters
Following on the theme above, there is some interesting legislation introduced in the United Kingdom that would not only require auditors to disclose the details of their engagement letters, including any liability caps – but also require companies to obtain shareholder approval of these arrangements!
The proposed legislation would also create a lot more transparency regarding changes in auditors, giving investors a greater voice in that process as well. This legislation is part of a long-term review of UK corporate law that started in 1998.
On Wednesday, the NYSE posted these proposed Section 303A rule changes regarding director independence, disclosure mechanics and other clean-up changes. [Oddly, the proposal states that the changes were approved by the NYSE board way back on April 7th. Typo?]
SEC Filing Fees Reduced
On Wednesday, the SEC released Fee Rate Advisory #5, which reduces the fees paid to register securities by 9.1% effective yesterday, November 27th. On November 22nd, President Bush signed H.R. 2862, the appropriations bill that includes funding for the SEC and the reduced rates became effective five days later – so that the fees due now are $107.00 per million registered.
Revised Executive Pay Settlement Approved in Fairchild Case
Also on Wednesday, Delaware Vice Chancellor Strine approved Fairchild’s revised settlement of a shareholder lawsuit alleging that the company’s Chairman and CEO received excessive compensation. The terms of this revised settlement were the subject of a blog from last month.
You know overpaid executives has become a mainstream topic when “Jeopardy” has a category entitled “Forbes Top Executive Salaries.” Yes, an episode of Jeopardy that I saw over the weekend included this category. And I am proud to say I did quite well on it! But not so well in the other categories – either that show has gotten tougher in my old age or I am fading…
The Blog about Wall Street? Really?
Yesterday, the NY Times ran a brief article about a one-month old blog that allegedly gives the inside scoop on Wall Street. I ran a “Whois” search on who owns the blog’s URL and came up with the Brownstone Media Group. Then, I googled “Brownstone Media Group” and came up with nothing but this blog about renovating properties in Brooklyn.
Although there is sparse contact information on either blog, the renovation blog does include an “advertisement” for the new Wall Street blog. So some sort of connection seems to exist between the two. This took all of two minutes to uncover. Maybe I don’t know enough about Wall Street – but Brownstone doesn’t strike me as part of the Wall Street establishment.
Think the NY Times was had? The article says the blog is run by an anonymous 30-something banker – but all of the blog entries are merely snippets or commentary regarding articles run in mainstream business publications. There is nothing in the way of real inside scoop or any other indicia that shows the blogger has any more Wall Street experience than Barney Rubble. I could be wrong but me thinks this is some sort of Web hijinks…
Last Thursday, the US Senate added an amendment to a broader tax bill approved by the Senate that would require all employees – not just officers – to pay tax on the company’s actual cost of providing them personal travel on corporate aircraft. This Dayton amendment isn’t part of a tax bill that is now pending in the House of Representatives. After the House passes its version, the two bills would go to a conference committee to be reconciled before being presented to the President for his approval.
Senator Dayton’s proposed amendment to the Code would require the inclusion in income to the employee of the greater of the fair market value or actual cost of such use (less any payment made by the executive, which is severely limited under Part 91 of the FARs). Senator Dayton’s amendment would presumably eliminate the non-commercial aircraft valuation rules of Treasury Regulation 1.61-21(g). [Interestingly, in arguing in favor of his amendment, Sen. Dayton cited this article from the WSJ, which showed a pattern of CEOs traveling on their company jets to play golf. This illustrates how the media plays a role here.]
In short, the days of using the “SIFL” rates to value personal use of employer-provided aircraft would come to an end – and the modest income attributable to personal use flights would grow significantly. The benefit to the company from this would be that, since a large number is being included in the executive’s compensation, it is likely that the entertainment disallowance to the company would be reduced, if not eliminated. Even if the proposed changes are not enacted into law, it seems likely that some Congressionally crafted changes will be passed eventually. Thanks to Stewart Lapayowker of Akerman Senterfitt for helping sort through this!
SEC Issues Draft RFP for EDGAR
Yesterday, the SEC issued a press release about a draft RFP that contemplates a significant, multi-year project to update EDGAR. The last RFP for EDGAR was back in 1998 – and even though the current EDGAR contract doesn’t expire until later next year, buying anything under federal procurement rules takes a long time.
The question is whether the SEC will select a new contract that places a large burden on companies or will they try to do something that can be done internally without issuer burden. As I blogged recently, I get a little nervous about constant talk about the need for “interactive data.” That suggests companies would have to create it.
One thing that could come out of this new contract is some sort of new “Financial Data Schedule.” This might be a template (perhaps with XBRL tags in the background) that would permit automated analytics of financial statements by both the SEC and analysts. Many of you will recall how a Financial Data Schedule was eliminated a few years back due to its uselessness – but one could be created with more value this time around.
One tension in all this is the differing needs of investors, analysts and regulators. I am not convinced that interactive data will help analysts much because they each seem to have their own approaches to normalizing and organizing corporate reports. Something like XBRL may help a bit, but it is far from an automated solution for them.
On the other hand, regulators need flags to go up or bells to ring that point them in a particular direction that allows them to better target their resources. They can dig in after the flag goes up and take it from there – more like the IRS. Again, XBRL might help – but it is not an automated solution for them either. If companies will be asked to bear most of the costs necessary to create interactive data, the benefits for the marketplace should be clearly shown.
ISS has released its voting policies update for 2006, including a new policy on majority vote shareholder proposals. Below is a snapshot of the most notable developments, as ISS will now:
– recommend a vote “against” shareholder proposals seeking implementation of a majority voting standard in a director election if company has adopted a corporate governance principle that addresses certain key points and the company satisfies other criteria.
– recommend a “withhold” vote from director nominees who serve on audit committees if company has serious internal controls issues
– recommend a “withhold” vote from director nominees who serve on compensation committees if company has poor compensation practices (also encouraging compensation committees to include “tally sheet” or other total compensation disclosures)
More on ISS’ Majority Vote Voting Policy
Fleshing out ISS’ new voting policy on majority vote shareholder proposals, Gibson Dunn issued this law firm memo that recaps the voting policy – and an ABA panel from this weekend where John Connolly and Martha Carter, ISS’s President/CEO and its SVP/Director, U.S. Research, respectively, stated:
“For 2006, ISS will generally support “reasonably crafted” shareholder proposals (regardless of whether binding or non-binding) asking a company to implement a majority voting standard in uncontested director elections. However, ISS will consider recommending votes “Against” this type of shareholder proposal if the company has adopted formal corporate governance principles that “present a meaningful alternative to the majority voting standard and provide an adequate response to both new nominees as well as incumbent nominees who fail to receive a majority of votes cast.” At a minimum, such principles should:
– apply to each nominee in an uncontested election who fails to receive affirmative votes of a majority of the votes cast in the election (i.e., not a majority of outstanding shares standard);
– contain guidelines that are disclosed annually in the company’s proxy statement;
– provide a clear and reasonable timetable for all decision-making regarding the status of a nominee who does not receive a majority vote;
– state that the process for determining the nominee’s status will be managed by independent directors, excluding the nominee in question;
– detail the range of remedies that can be considered concerning the nominee (e.g., accept a resignation from the nominee, cure issues underlying the voting results, etc.);
– commit to prompt disclosure of the nominee’s status via an SEC filing; and
– describe the timeline for disclosing the directors’ decision regarding a nominee’s status and explaining how the decision was reached.
The ISS representatives emphasized that the new policy is intended to be flexible (as opposed to a “check the box” approach), that ISS is not endorsing any one company’s policy or approach and that it is very important for a company to explain why any policy it adopts is appropriate for that company.
The 2006 Policy Updates reflect this last point where they state that “In addition, the company should articulate to shareholders why this alternative [implementing a corporate governance policy on majority voting as opposed to changing the voting standard] is the best structure at this time for demonstrating accountability to shareholders.” Finally, in considering its voting recommendation, ISS will also evaluate the company’s accountability to shareholders, including whether it has a classified board or a history of not responding to shareholder proposals that received a majority vote.”
The Gibson Dunn memo – and these other law firm memos – provide a number of practice pointers about what you should consider now in light of these new changes.
Working in Corp Fin During the ’60s
How about a human interest story for the holiday? In this podcast, Bob Curley of Mayer Brown Rowe & Maw provides some insight into what it was like to work in the Division of Corporation Finance forty years ago, including:
– Where was the SEC located? What was the Staff’s composition?
– What was nature of working in Corp Fin back then?
– How were filings processed and reviewed?
– What were some of your favorite moments when you were on the Staff?
– What are some of things you missed most when you left?
The SEC has announced an open Commission meeting for November 29th, during which the Commission will consider proposing rules that would eliminate the requirement to deliver proxy materials for companies that wanted to follow this “alternative model.” This alternative model would require companies to deliver a notice – which could not be accomplished just by a Web posting – that state that proxy materials are available on a corporate website.
This proposal is a logical extension of the “access-equals-delivery” framework that the SEC adopted as part of the ’33 Act reform, as the SEC clearly now recognizes the widespread availability of Internet access for investors (and for those that don’t, they can request a paper copy). This proposal also reflects the fact that a high percentage of proxy statements go to shareholders that do not vote.
At an ABA meeting this weekend, Corp Fin Director Alan Beller indicated that the SEC would not be able to adopt final rules in time to apply to this proxy season. He also indicated that the proposed rules likely would:
– require that a proxy card or voting instruction form be sent (and will not presume consent to electronic voting)
– not address OBO/NOBO or other issues; it will be a narrowly focused proposal
– be available for issuers and others who solicit
– apply to the proxy statement and glossy annual report
Problems with 8 audits by E&Y and 30 by PwC were big enough to suggest that the firms failed to obtain “sufficient competent evidential matter” to support opinions on their clients’ financial statements.
Here are some thoughts from Lynn Turner, former SEC Chief Accountant and now head of research for Glass Lewis, on these reports: “These reports include some stunning revelations about shortcomings in the described audits performed by PWC and E&Y. Unfortunately, these reports are being issued over 22 months after the December 31, 2003 year-end involved in many of these audits – and over a year after inspections were done.
This will not help instill investor confidence that audits are being done in accordance with required standards. However, it does appear inspections are much more in-depth than they were when the firms were regulating themselves (and let’s hope the PCAOB keeps up with this high level of inspection scrutiny).
Also of interest is that the Big Four are demanding that companies agree to a limitation on the damages an auditor would incur for doing negligent audit work. Based on these inspections, one can understand why the Big Four auditors want liability limitations.”
With Apologies to “Intervention”
I broke my policy of open-mindedness when I dissed the reality TV show “Intervention” in my Friday blog without ever having seen it. One member set me straight:
“If you haven’t seen “Intervention” on TV, you’d be doing yourself a big favor if you watched it. Particularly if you have kids. In my opinion, it is without a doubt the most gripping television I’ve seen in a long time, if not ever. It is nothing like Survivor, I imagine (I have to imagine this because I have never watched and will never watch Survivor or The Apprentice or any other “reality” TV).
Intervention is about the human condition, about forgiveness, about facing our own shortcomings, about growing up, about the disease of narcissism. Why did it take TV 60 years to create a show like this? Intervention is like a big public service announcement, a reminder that from dust we came and to dust we shall return, and in the meantime it would be good if could see our way clear to not being assholes to each other. A reminder I would do well to heed. And it is right that Intervention is shown on Sundays, particularly for those of us who, like me, don’t always get to church. Intervention gives real meaning to the expression: There but for the grace of God go I. I recommend it.”
On Wednesday, the SEC posted its 2005 Annual Report. Thumbing through this thing, here are some highlights (let me know if you spot some other nuggets):
1. A chart with milestones for significant rulemaking is on page 16 of the PDF (page 14 of the annual report)
2. Discussion of the causes of its unforeseen $48 million budget shortfall begins on page 21 of the PDF (page 19 of the annual report)
3. Discussion of the corrective actions to fix the SEC’s three remaining material weaknesses of its internal controls begins on page 23 of the PDF (page 21 of the annual report)
4. Staff turnover rate in ’05 was 7.5%, the highest level since ’01 (’04 had a 6.3% rate – but these levels tend to be much lower compared to a law firm)
5. Corp Fin’s gross costs were $125 million in ’05; up from $92 million in ’04
6. The number of foreign companies listing in the US and the dollar amount they raised jumped significantly compared to the past year, noted on page 41 of the PDF (page 39 of the annual report)
7. Corp Fin’s response time on comment letters is quicker and is less than 30 days as mentioned on page 44 of the PDF (page 42 of the annual report)
8. Corp Fin referred significantly more cases to the Enforcement Division, likely because the size of Corp Fin’s Office of Enforcement Liasion has grown itself and more filings are being review now that companies are required to be reviewed once during every three years, as noted on page 48 of the PDF (page 46 of the annual report)
Remember: Your PowerPoint Could Wind Up On The Web
Last Sunday’s NY Times ran Gretchen Morgenson’s column about Delphi’s controverial incentive and retention bonus arrangements, during which Gretchen singled out the lawyers and comp consultant’s involvement in the arrangements that have been made public by virtue of the company’s bankruptcy filing (although oddly she didn’t single out the board, which we all know should be held accountable first and foremost).
In the article, Gretchen specifically called out this Watson Wyatt 35-page PowerPoint presentation, which was filed as part of the company’s bankruptcy proceedings. The PowerPoint sets forth the proposed parachute arrangement proposal that ultimately was approved and implemented.
Knowing that this type of information could become publicly available – and spotlighted in the mainstream media – should serve as a cautionary tale to advisors who migth be second-guessed if they don’t provide their clients with some responsible alternatives as to compensation arrangements.
Debunking the Myths on “Going Dark”
Lots of interest in this upcoming DealLawyers.com – “Going Private and Going Dark.” As this article suggests, a surprising number of companies are “going dark” – and I believe that the article even understates how many companies have done so recently. During the webcast, the lawyers and a banker from the panel will debunk a bunch of the common myths regarding going dark.
If you can’t wait for the webcast, we have created a new “Going Dark” Practice Area, which has several articles about going dark – and a partial list of companies that has recently done so.
Yesterday, this helpful WSJ article highlighted a number of top blogs that cover specific industries – and contained a blurb on the DealLawyers.com Blog. That was great to provide exposure for that blog – but omitted any mention of this fine blog.
It just goes to show that you never know how – and when – you will obtain your 15 minutes of fame. I’m just glad to catch mine in an unembarrassing manner in this day and age of reality TV. Can there really be a show now called “Intervention?” And the show’s subject is not even aware that his/her intervention is shown on TV…
The SEC’s General Counsel Roundtable
Today the SEC is hosting a Roundtable with a panel consisting of the current SEC General Counsel and eight former SEC General Counsels. This program is being webcast at noon eastern. It was slapped together at the last minute – and (oddly) no specific agenda is provided.
General Electric Joins the Majority Vote Resignation Gang
We have updated our “Majorty Vote Resignation” Chart to reflect that General Electric has joined the growing number of companies that have revised their corporate governance guidelines to add a provision that calls for directors to resign upon receiving a majority of withhold votes in an uncontested election. Here is GE’s announcement.
The FASB to Act on Pension Liabilities
Last Thursday, the FASB voted to take a fresh look at its guidance in FAS 87, “Employers’ Accounting for Pensions,” and 106, “Employers’ Accounting for Postretirement Benefits Other than Pensions.” The first part of the project – expected to be completed by the end of 2006 – would require companies to show any assets or liabilities from overfunded or underfunded pensions on their balance sheets. The current practice is to show those amounts in footnotes.
From what I am hearing, this change in FAS 87 and 106 could cause total shareholders’ equity to drop significantly for some companies, which in turn would adversely impact their debt-to-equity ratios enough to trigger a host of debt covenants.
After next year’s first step, the FASB likely will engage in a joint project with the IASB to overhaul the entire system for accounting and reporting on postretirement benefits. Here is more information on this development from CFO.com.
During the PLI Securities Law Institute, Elisse Walter of the NASD addressed an open issue regarding WKSI shelf offerings and NASD Rule 2710: In the near future (but not likely to happen before the December 1st effective date of the ’33 Act reform), the NASD’s review procedures are likely to be modified so that these offerings are cleared within one day of the date they are filed – this is good news because a full review otherwise could take weeks. This change won’t affect shelf offerings exempt from the filing requirements of Rule 2710 that are not subject to Rule 2720.
While it will still be necessary to file prospectus supplements and post-effective amendments required to be filed under Rule 2710, the NASD likely will not require that such materials be approved prior to use (but the NASD likely will “spot check” these materials for compliance). Here are more notes from that PLI panel, including comments from Elisse on free writing prospectuses and the NASD’s outstanding proposal on fairness opinions.
Looking for SEC Staffer Phone Numbers?
Now that the SEC’s HQ has relocated, I’ve been fielding requests from members looking for an updated SEC Phone Directory with new phone numbers. Unfortunately, I believe the 2004 SEC Phone Directory is the latest.
Although not as useful, the SEC does have a personnel locator phone number that you can call: (202) 551-6000. This number leads to an automated function or you can opt out to speak with an operator. I will let you know when an updated SEC Phone Directory is available.
Gemstar Wants Prison for Ex-CEO
According to this article, Gemstar-TV Guide International has filed a victim’s statement with the Los Angeles federal probation office seeking harsher punishment for fired CEO Henry Yuen, who presided over a $248 million accounting fraud. The former CEO’s plea agreement with the Justice Department calls for a proposed six-months in home detention, a $250,000 fine and a $1 million charitable contribution.
Victims of crimes have the right to protest proposed plea bargains if they contend the punishment isn’t adequate. Companies rarely file such statements – but this illustrates how companies should take steps now to deal with bad actors before the going gets rough (egs. revisit employment agreements and D&O insurance and indemnification arrangements).
It appears that one of Chairman Cox’s top priorities is the use of XBRL; here is a speech he gave last week on the topic (and here is another speech he gave recently). The SEC’s XBRL pilot has been in operation since April – and in that 6 month period, a total of 19 filings have been made in XBRL. I believe there’s a reason for this: the technology is complex and the payoff for a company that dabbles in it is small (at least right now), so that no one wants to invest in creating even an XBRL test filing.
Chairman Cox is absolutely right in his concern that the SEC is behind the curve regarding the use of technology to give examiners a jump on where to focus their resources, but I’m not convinced that widespread adoption of XBRL will be the big breakthrough that helps solve that problem. Plus I believe it will take quite a while to get most companies over the XBRL hump (EDGAR was not built in a day; it took roughly a decade until full implementation).
From what I understand, there perhaps are other quicker – and cheaper – ways for the SEC to leverage automated analysis. For example, the SEC could buy data and create analytics based on XBRL data; there are multiple XBRL providers already and some can convert financial statements into XBRL almost on the fly. So the SEC could do what the FDIC has already accomplished – create a templated report that every company has to file and this template could have XBRL behind the curtain. Just my ten cents…
Caselaw Developments regarding D&O Insurance
In this podcast, Nate McKitterick of DLA Piper Rudnick Gray Cary explains the latest caselaw developments involving D&O insurance – which have drastic implications as innocent D&Os could see their policies rescinded – including:
– What is “rescission”?
– What have the courts said recently regarding rescission?
– Won’t the indemnification obligations adequately protect the directors and officers?
– What can a company and its board do to minimize rescission risk?
When ERISA Suits Tagalong to D&O Claims, the Fiduciary-Liability Coverage Might Not
From the Insurance Scrawl Blog: Corporate directors and officers litigation today often involves claims asserted under the federal securities laws as well as under federal employee-benefits law (ERISA). The plaintiffs in these suits are conceptually different: securities-law plaintiffs are people who (and entities that) purchased or sold the company’s securities; ERISA plaintiffs are participants in employee-benefit plans that held or permitted the investment in company securities. Increasingly, ERISA cases are tagging along to securities cases: the directors and officers (who often are plan fiduciaries) are alleged to have failed to disclose certain facts about the company’s operations or finances to the market generally (for securities claims) or to participants in company-sponsored employee-benefit plans (for ERISA claims).
The United States Court of Appeals for the First Circuit recently had the opportunity to address coverage for a tagalong ERISA claim that was made four years after a securities-law class action was filed. In a very troubling opinion, the court ruled that no coverage was available for the ERISA class action because the gravamen of the complaint echoed the allegations in the earlier securities class action. The basis of the court’s ruling was not that the policyholder had failed to disclose the early securities-law class action, but rather that a generic prior-and-pending litigation exclusion barred coverage. Federal Ins. Co. v. Raytheon Co. (1st Cir. Oct. 21, 2005). More analysis on this case is provided here.