January 6, 2006

SEC Clashes With DOJ Over Plea Deal

After so many recent blogs about regulators battling each other, I couldn’t resist blogging on the SEC’s rare disagreement with the Department of Justice over whether the former CEO of Gemstar-TV Guide International is getting too much of a sweetheart deal from the DOJ.

The SEC’s complaints helped persuade U.S. District Judge John Walter to withhold approval of the plea deal in December. The agreement with the U.S. attorney in Los Angeles calls for the former CEO to spend six months in home detention for obstructing the SEC’s probe of a $248 million accounting fraud at Gemstar. The case is U.S. v. Yuen, U.S. District Court for the Central District of California, 05-918.

Here is a related article – and I have posted the transcript of the court hearing in which the judge challenges the DOJ’s plea bargain in our new “White Collar Crime” Practice Area.

Confusion Reigns Over 10-K and 10-Q Cover Pages

Some astute members noticed that the 10-K and 10-Q cover pages that I blogged about yesterday didn’t include all the changes that were supposed to be included on the covers effective December 27th. I should have explained that I believed that EDGAR doesn’t yet have the ability to receive submission headers that reflect LAF/AF/NAF status. The same type of filing snafus occurred on December 1st when EDGAR wasn’t reprogrammed timely to accept the changed forms required by the ’33 Act reform.

However, I will post updated forms later today with all the new checkboxes – because, from what I can tell, it seems that:

1. some financial printers are relatively unaware of this, but they can generally accommodate the change on the cover page;

2. the EDGAR submission fields have not yet been revised, so filings still need to indicate “yes” or “no” as to whether the filers are accelerated filers (note – this can cause confusion because most printers usually load the information off the cover page, so if the cover page doesn’t have the same check boxes as the EDGAR submission header, the printer might not know how to fill out the EDGAR submission header); and

3. the forms on the SEC webpage and the CCH network have not yet been updated for this change.

Given all this, I don’t feel like I led folks too far astray – but I certainly should have explained myself. Twenty lashes rain down on me!

The Latest on PIPEs

We have posted the transcript from our recent webcast: “The Latest on PIPEs.”

New Rules for Special Committees and Fairness Opinions?

Trying to minimize repeating my blogs from the Blog this year, but I think it’s important to point out the recent Delaware opinion – In re: Tele-communications, Inc. Shareholders Litigation, – that has raised significant concerns regarding whether contingent fees for advising a special committee are appropriate – and the need for a relative fairness opinion when the transaction consideration is allocated amongst classes of capital stock, among other issues raised. Read more about this case – including a copy of the opinion.

As for the concept of me blogging on two different sites – my wife looks at me now and says “you are now blogging for two?”