Placement agent bans were put in place at the New York State Common Retirement Fund and the New Mexico State Investment Council because of the pay-to-play scandals at those pension funds. Now the SEC has proposed a ban on using placement agents when seeking capital investments from public pension funds. A coalition of placement agents [...]
Archive | August, 2009
Indemnification for Investment Professionals by Their Funds
A recent case decided some issues relating to the indemnification of private equity and venture capital professionals by their affiliated funds in connection with their service as directors and officers of their portfolio companies. Stockman v. Heartland Industrial Partners, L.P., (July 14, 2009), Delaware Chancery Court. David A. Stockman and J. Michael Stepp were investment [...]
FCPA Opinion Procedure Release 09-01
The Department of Justice released its latest Opinion Procedure Release under the FCPA: 09-01 The Requestor designs and manufactures a specific type of medical device. The Requestor’s competitors already operate and sell their products to the government of a certain foreign country and the Requestor wants to enter that market. A senior government official laid [...]
Jefferson Case Will be Remembered for Cash in the Freezer
Former Congressman William Jefferson’s corruption trial will always be remembered as the one about the guy with the cash in his freezer. But Jefferson was acquitted of Count 11, violation of the Foreign Corrupt Practices Act. This was the primary crime related to the stash of $100 bills the FBI found between boxes of Boca [...]
Jefferson Convicted of Corruption Charges
William Jefferson, the former nine-term congressman from Louisiana, was found guilty of 11 of 16 corruption charges on Wednesday by a federal jury. The Jefferson case was most famous for the discovery of $90,000 of cash stuffed in his freezer. Prosecutors said Jefferson planned to use the cash for a bribe. Jefferson’s lawyers said the [...]
Respondeat Superior and Compliance
Back in January, a company was found criminally liable for the action of its employees. (Second Circuit Affirms Ionia Management Case.) Under respondeat superior (Latin for “let the master answer”) a company can be held vicariously liable for crimes committed by employees acting within the scope of their employment. Ionia operates and manages shipping vessels [...]
Fired for Foiling a Bank Robbery
Jim Nicholson was working at a Key Bank branch when a man entered the bank and demanded money. Rather than comply with the robber’s demands, Nicholson tossed his bag to the floor, lunged at the suspect and demanded to see a weapon. The man ran, and Nicholson chased him for several blocks before knocking him [...]
Is the Public Company Accounting Oversight Board Unconstitutional?
That question is on the docket for the Supreme Court in October. The Court agreed to rule on the constitutionality of the Public Company Accounting Oversight Board in Free Enterprise Fund v. PCAOB (08-861). The Sarbanes-Oxley Act passed in 2002 created PCAOB as a new government agency to regulate firms that audit the books of [...]
Reasons Why the SEC Wants to Regulate Political Contributions
The SEC has proposed a New Rule on Political Contributions by Certain Investment Advisers to prevent advisers from participating in pay to play practices affecting the management of public pension plans. They had proposed a similar rule in 1999. Many of the comments to that rule said that pay to play was not a problem [...]
Hollywood and the FCPA
With the guilty verdict in the case of handbag magnate Frederic Bourke and while waiting for the verdict in the Jefferson corruption case, we can turn to Hollywood for the next FCPA trial. The U.S. Attorney’s office charged a Hollywood producer with paying bribes to a foreign official. Gerald and Patricia Green are accused of [...]
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