Within days of each other two CEOs announced their intentions to step down. Sara Lee Corp. Chairman and CEO Brenda Barnes announced her decision to step down permanently to focus on improving her health following a stroke. Barnes, 56, had been on temporary medical leave since May 14. Days before Ms. Barnes’ announcement, Much-heralded Hewlett-Packard chieftain Mark Hurd resigned due to "circumstances surrounding a claim of sexual harassment." In both cases interim CEOs have been named; however, Hewlett-Packard’s shares went into a tailspin on the news.
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Ask two attorneys about when it is appropriate to disclose merger negotiations and you’ll most likely get three opinions. This is an issue that emerges more often than you would think.
Well we do have two attorneys to help shed some light on the issue… In an advisory entitled, "Recent Cases Remind M&A Participants of When Disclosure of Merger Negotiations Is Required," Morrison & Foerster attorneys Spencer D. Klein and Michael G. O’Bryan weigh in on the matter.
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Among other things, the Dodd-Frank Wall Street Reform and Consumer Protection Act provides significant incentives and protections to whistleblowers through amendments to both the Commodity Exchange Act and the Securities Exchange Act of 1934. Financial institutions or their holding companies with securities registered under the Securities Exchange Act have always been susceptible to claims of allegedly materially misstating their financial condition or results of operations (for example, by overstating the fair value of their financial assets or omitting material information from their public filings). However, those risks are greatly amplified by the Act’s empowerment and protection of whistleblower plaintiffs.
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For those of you seeking a cure for your insomnia, you might want to try wading through the more than 2300-page comprehensive financial regulatory reform bill brought to us by Senator Christopher Dodd (D-CT) and Representative Barney Frank (DMA). For the rest of you, I thought I’d review the key points.
The legislation, known as the "Dodd-Frank Wall Street Reform and Consumer Protection Act," contains several executive compensation provisions, many of which are incorporated or modified from Senator Dodd’s previous bill passed by the Senate on May 20, 2010. The key provisions include:
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In the action referred to as 3Com Corporation v. Diamond II Holdings, Inc., a Delaware Court of Chancery recently reaffirmed that, in the context of a corporate transaction, communications made between a corporate client and its legal counsel which involve the corporate client’s investment bankers are subject to the attorney-client privilege under Delaware law. Additionally, the court found that, even though many of the communications at issue originated from or were received in another state, they were privileged because the parties had selected Delaware law as the governing law of the merger agreement and had consented to the exclusive jurisdiction and venue of the state courts of Delaware for the resolution of any dispute arising out of the merger agreement.
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It has come to light that the SEC is investigating generic drug maker Mylan Inc. over whether it disclosed confidential earnings information to a group of investors last September. The event in question was held on September 9, 2009 at the company’s West Virginia manufacturing facility with Wall Street analysts and some of their institutional clients in attendance. In its investigation, according to reports, the SEC has contacted a number of the participants to ask about the meeting. In addition, the company has been asked for information about the gathering.
Central to the SEC’s inquiry is the fact that Mylan’s shares increased 7% on higher than normal volume the day after the meeting, which was not webcast. According to report, the company denies any wrongdoing. Was the company in violation of Reg. FD? That’s for the SEC to determine.
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The Financial Industry Regulatory Authority, Inc. ("FINRA") recently issued Regulatory Notice 10-22 reminding broker-dealers of their obligation to conduct a reasonable investigation of the issuers and securities that they recommend when conducting or participating in private placements of securities made in reliance upon Regulation D of the Securities Act of 1933.
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On April 15, 2010, Google Inc. issued a press release announcing that it had released its first quarter 2010 financial results and directing the reader to visit Google’s investor relations website to view the earnings release. The press release stated that "Google intends to make future announcements regarding its financial performance exclusively through its investor relations website." Google’s announcement resulted in immediate discussion on various blogs, websites, and other forums regarding the potential implications of this approach regarding the manner in which public companies disclose material information to the public.
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A day doesn’t pass when I don’t find some scammy thing in my e-mail box, touting some unknown stock with the promise of outsized gains (Ed. Note: I’m still waiting for that Nigerian prince to wire me that $25 million he promised). Worse yet is when I get calls from operators of such sites offering to interview my client, write a report or do some kind of e-mail blast to nine bazillion investors eagerly waiting for what could be the next Apple, all for an outrageous fee, of course. While there are legitimate sites for investors as well as acceptable uses for e-mail, I believe that it is time to put these less than reputable operators out of business. Perhaps, there should be some type of registration or licensing process. Yes, I’m aware of the disclaimers typically buried on the site in small type; however, I believe that more needs to be done to stamp out "financial pornography."
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In an analysis of its database of over 30,000 board seats, The Corporate Library shows that female board participation is still in its early stages. Almost 90 percent of S&P 500 companies do have at least one woman on their boards, which accounts for the perception in some quarters that women’s representation is widespread. However, only 60 percent of companies comprising the Russell 3000 as a whole, and only half of Russell 2000 companies, have at least one female director. This demonstrates that gender diversity is much less prevalent in the universe beyond the largest and highest-profile companies.
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