A lot going on down at the US Supreme Court for those in our field. In addition to the SLUSA case I blogged about earlier, here are 4 other developments just this week:
1. Halliburton’s Oral Arguments – The “biggie” is the Halliburton Co. v. Erica P. John Fund fraud-on-the-market case that I have been blogging about. Yesterday was oral arguments – here’s a transcript. And here’s a nice recap of the oral arguments from Reuters – and a summary from the Washington Post, another one from Reuters and one from Bloomberg (and one from the D&O Diary Blog – and here are recaps from Sullivan & Cromwell, Ropes & Gray and King & Spalding. Here is a list of the briefs submitted so far.
2. Decided Private Company Whistleblower Case – In addition to these memos that I’ve posted in our “Whistleblowers” Practice Area, Morrison & Foerster’s Daniel Westman & Jeremy Ben Merkelson write: A 6-3 ruling in Lawson v. FMR held that workers of private firms that contract with publicly traded companies are protected by federal whistleblower laws. If they see something, they can say something with the same impunity as direct employees – and can be subject to the same rewards. In reversing a First Circuit decision, the Supreme Court majority held that whistleblower provisions of the Sarbanes-Oxley Act cover employees of private contractors and even subcontractors that are hired by publicly traded companies. The case at issue involves the mutual fund industry, where nearly all individual funds “are structured so that they have no employees of their own but are managed by independent investment advisors. The Court’s holding extends far beyond the mutual fund industry to cover other contractors, including law and accounting firms.
3. Granted Cert on Omnicare – SCOTUS granted certiorari and will review Omnicare v. Laborers District Council Construction Industry Pension Fund next term. As noted in SCOTUS Blog, the issue is: “Whether, for purposes of a claim under Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k, a plaintiff may plead that a statement of opinion was “untrue” merely by alleging that the opinion itself was objectively wrong, as the Sixth Circuit has concluded, or must the plaintiff also allege that the statement was subjectively false – requiring allegations that the speaker’s actual opinion was different from the one expressed – as the Second, Third, and Ninth Circuits have held.” Learn more in this blog by Lane & Powell’s Claire Loebs Davis.
4. Denied Cert on Sun Capital – SCOTUS denied certiorari to review Sun Capital Partners III v. New England Teamsters & Trucking Industry Pension Fund, a July 2013 decision by the First Circuit that held a private equity fund was a “trade or business” under ERISA’s controlled group rules and, as a result, could be held jointly & severally liable for the pension obligations of a bankrupt portfolio company.
The Upcoming Reform of the Uniform Unclaimed Property Act
Since 1954, the Uniform Law Commission has promulgated a Uniform Unclaimed Property Act as a way to abolish the common law on abandoned property. This Act has been updated every 10-15 years – and it’s now been nearly 20 years since its last revision in 1995. So its due for a revision – and this “Issues Document” lists 76 issues that the drafting committee has requested comments by April 22nd.
Independence Intersection of Compliance Officers & GCs
In this podcast, Jeff Kaplan of Kaplan & Walker explains the latest developments in how boards oversee compliance programs, including:
– Based on a recent Wall Street Journal article, the issue of whether the compliance officer should report to the general counsel continues to be the considerable focus of regulators and companies. Where do you come down on this?
– When it comes to administrative reporting, is there a middle ground – meaning something between skipping the GC altogether and giving them unfettered discretion in supervising the compliance officer?
– Are there other areas where you think some companies may be going overboard?
– Compliance programs have now been mainstream for a while – do you have any other recommendations for keeping a program fresh?
– Broc Romanek