March 28, 2007

Corp Fin Issues Global Relief on Tender Offer Prompt Payment – 409A Issue

Yesterday, Corp Fin’s Office of Mergers & Acquisitions issued this global exemptive order – even though the order is in response to a request from Chordiant Software, which is not unusual for global no-action relief – relating to Section 409A and the tender offer prompt payment rules. During the past few weeks, OM&A had issued three separate exemptive orders (these orders are posted in the “Backdating” Practice Area) – and now with this global relief, it can cut down on its workload going forward.

Posted: Foreign Private Issuer Deregistration Adopting Release

Yesterday, the SEC posted its adopting release on non-US issuer deregistration. Here’s a first – the SEC even put out a press release to indicate that the adopting release was posted…

Lawsuit Targeting Sarbanes-Oxley and PCAOB Dismissed

Last week, the lawsuit filed by Free Enterprise Fund seeking to abolish the PCAOB was dismissed. The lawsuit claimed that Congress acted unconstitutionally by creating the regulator because it operates independent of government supervision. In his decision, U.S. District Court Judge James Robinson disagreed by noting that the PCAOB is accountable to federal officials because the SEC Commission can remove its members. The Judge also said that the plaintiff raised “nothing but a hypothetical scenario of an overzealous or rogue PCAOB investigator.” The Free Enterprise Fund plans to appeal.

Sarbanes-Oxley and Pornography

As noted in this article, a prominent defense attorney alleged to have destroyed child pornography evidence has been charged with obstruction under Section 1519, a obstruction provision added by Sarbanes-Oxley that is stronger than pre-Sarbanes-Oxley tampering statutes. Under Section 1519, there need not be an investigation in place (or even imminent) as a predicate for prosecution.

Here is a quote from another article: “Every criminal defense lawyer in the country has to be alarmed at the indictment,” said New York University law professor Stephen Gillers. “It’s going to upset a lot of assumptions about how lawyers can represent clients. I think this is a boundary-pushing case.” This is not the first attempt to bring obstruction claims under Sarbanes-Oxley for alleged pornography use, as this blog notes, the former head of Bowne was similarly charged back in 2005.