February 21, 2019

More on “Coming Soon: Senate Bill for Buyback Restrictions”

A few weeks ago, Liz blogged about a Senate bill from two Democrats that would allow companies to repurchase shares only if they pay their workers well (see this MarketWatch article for the potential consequences). Now Republican Senator Marco Rubio has released a report that calls for ending the tax advantages that buybacks enjoy over dividends (see this article). So there is a bipartisan push to limit stock repurchases, although with far different approaches to doing so…

Here’s a press release from CII about its views on buybacks – essentially warning Congress against regulation and urging better disclosure from companies about the rationale for their buybacks…

ISS Bribery Scandal: Conviction for Former Georgeson Employee

A long while back, I blogged about an ex-Georgeson solicitor who bribed an ISS employee to get confidential voting information. As noted in this Goodwin alert (scroll down), that person has been convicted and is now facing up to 20 years in prison…

Yikes. I could see how there’s a grey area in there, which is scary with all the client entertainment that goes on at all types of firms. Hopefully, the prosecutors won’t pursue the max sentence…

D&O Cyber Lawsuits Continue

Recently, Melissa Krasnow of VLP Law Group sent over this article describing how many D&O cyber lawsuits were filed after the EU’s GDPR went into effect on May 25th. Melissa also sent this recent decision to allow the federal securities law class action cyber lawsuit to proceed against Equifax and its former CEO.

Before disclosing the data breach to the public for the first time, Equifax’s former CEO said, in a presentation that is available on YouTube: “when you have the size database we have, it’s very attractive for others to try to get into our database, so it is a huge priority for as you might guess. [Data fraud] is my number one worry, obviously.”

Melissa anticipates that the trend of D&O cyber lawsuits will continue and more lawsuits will be filed due to:

– Cyber events that occur
– Existing and evolving privacy and cybersecurity regulation and enforcement in the US, Canada, EU and globally
– Interest of plaintiffs attorneys in pursuing these lawsuits
– Settlement of some of these lawsuits (which has occurred in certain lawsuits)
– Blind spots/shortcomings regarding how certain organizations and their executives and directors address privacy and cybersecurity (including lack of awareness/information regarding these lawsuits)

Broc Romanek