As noted in this Wachtell Lipton memo by George Conway, a federal district judge in New York last week threw out most of a securities class action jury verdict that plaintiffs’ lawyers had estimated was worth $9.3 billion. The jury’s verdict was rendered 13 months ago – before National Australia was decided, and thus under now-overturned law – upheld claims that were predominantly “foreign-cubed” (asserted by foreign investors against a foreign issuer for losses on a foreign exchange) and “foreign-squared” (asserted by American investors against a foreign issuer for losses on a foreign exchange). In categorically dismissing all the claims of those investors, the decision in In re Vivendi Universal, S.A. Securities Litigation, according to Vivendi and its counsel, eliminated at least 80%, and perhaps up to 90%, of the liability that the verdict could have produced.
As George notes in his memo, this case marks the culmination of a series of district court decisions that have consistently rejected attempts by the securities class-action plaintiffs’ bar to find loopholes in National Australia. Both of the main theories that have been advanced by plaintiffs’ lawyers to evade the Supreme Court’s decision have been repudiated by the courts, now repeatedly and sometimes scathingly.
Why Would Corp Fin Ever Deny a Registration Statement Withdrawal?
Last week, BlogMosaic ran this blog about how the SEC recently denied the withdrawal of a registration statement. It’s a rare occurrence and might lead you to wonder why Corp Fin would do such a thing. I believe it happens when the SEC suspects foul play and by denying the withdrawal, it helps them maintain jurisdiction over a potential action.
More on our “Proxy Season Blog”
With the proxy season in full swing, we are posting new items regularly on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Updated: Links to Fortune 100 Investor Web Pages
– Proxy Impact Offers New Advisory Services
– Goodbye Proxy Governance! And Then There Were Two…
– A Final Review of 2010 ESG Shareholder Proposals
– Top 10 Questions for Audit Committees
Over the past two days, the SEC’s beleaguered Enforcement Division has brought separate earth-shattering cases that go straight to the boardroom. On Monday, the SEC charged three of Point Blank Solutions’ former outside directors (and audit committee members) for their complicity in a massive accounting fraud. Then yesterday, the SEC charged a former McKinsey head of using his position as director for Goldman Sachs and Procter & Gamble for being a tipper in the Galleon insider trading scandal. Here’s an interesting excerpt from this NY Times article:
The case against Mr. Gupta has an unusual procedural twist. Under the Dodd-Frank Act, the S.E.C. can seek a full range of penalties against people not employed by a financial services firm through a relatively streamlined proceeding before an S.E.C. administrative law judge. Historically, if the agency sought penalties against a public company director like Mr. Gupta, it had to sue in federal court, where the defendant has full discovery rights of the SEC’s case, including all of its witnesses.
And here is a sidenote – a quote from Preet Bharara, US Attorney for the Southern District of New York, that I shortened and tweeted last week: “Unfortunately from what I can see, from my vantage point as US Attorney, illegal insider trading is rampant” (this quote was lifted from this insider trading memo by Morrison & Foerster).
Webcast: “Conduct of the Annual Meeting”
Tune in tomorrow for the webcast – “Conduct of the Annual Meeting” – to hear Bret DiMarco of Coherent, Peggy Foran of Prudential, Carl Hagberg, an independent inspector of elections and Editor of The Shareholder Service Optimizer, Kathleen Salmas of Northrup Grumman and John Seethoff of Microsoft discuss all of the thorny annual meeting issues, such as what to do if you need to adjourn the annual meeting, how to handle common and troublesome tabulation issues and how to handle meeting attendees that act inappropriately. Carl has contributed this fantastic set of practical articles on annual meetings as course materials.
Conducting Meaningful Board Evaluations
In this podcast, Denise Kuprionis of Governance Solutions Group explains how to best handle board evaluations, including:
– What are the key elements of a board evaluation?
– What role should the corporate secretary/chief governance officer play in this review process?
– What are the metrics? How should the board measure itself?
– What’s the “so what” after the evaluation is complete?
With Friday’s deadline for a government shutdown looming, it seems fair to start wondering how our community will function without the agency. Will EDGAR be operational? Will registration statements be declared effective so that deals can go forward? Will no-action requests related to shareholder proposals be processed?
I don’t know the answers to these questions – but I imagine most of the news wouldn’t be good. This article notes that the SEC is engaged in contingency planning – and this note to SEC union employees indicates that relatively few SEC Staffers are deemed “essential” (100-250) and would remain on the job. I presume Corp Fin will provide us with news about the impact of the shutdown if it does indeed occur. As this article notes, the House votes today on a temporary funding measure – but that may merely put off the shutdown for two weeks.
Interestingly enough, there is no precedent for the SEC here – at least not in the modern era – as the SEC somehow found funding to keep open back in 1995 when the government was last shut down. And I end with this note from a member:
Am I the only one who has noticed that the deadlines for the government shut-down and the NFL lock-out are both on March 4? I would think that political and sports pundits alike would revel in such a congruence of the stars. But maybe I just follow less informed pundits.
A New Shareholder Proposal Database: ProxyMonitor.org
One question I get asked often enough is where can one find a database that tracks shareholder proposals and their stats. Sites like this have existed but they tend to disappear within a year or two. Now there is a new one. In this podcast, Jim Copland of the Manhattan Institute’s Center for Legal Policy provides some insight into ProxyMonitor.org, a new shareholder proposal database, including:
– What is ProxyMonitor.org?
– How long did it take to create?
– Who do you envision using it?
Our March Eminders is Posted!
We have posted the March issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!