These are some of the compliance-related stories that recently caught my attention.
A recent Delaware Court of Chancery opinion analyzed claims that are not uncommon: one of two founders of a start-up, that failed to launch, claimed that the other co-founder breached fiduciary duties by launching another start-up venture with a third-party who then pursued the business plan of the original start-up, but without the original co-founder. In McKenna v. Singer, C.A. No. 11371-VCMR (Del. Ch. July 31, 2017), the court disagreed that the original co-founder of the original start-up entity had any right to an interest in the separate start-up venture later launched with a different third-party. [More…]
First U.S. Trader Prosecuted for ‘Spoofing’ Sees Conviction Upheld by Dave Michaels in the Wall Street Journal
The decision by the U.S. Court of Appeals for the Seventh Circuit in Chicago also buttressed the seven-year-old provision in the Dodd-Frank Act that criminalized spoofing. The court rejected Michael Coscia’s claim that his conviction should be overturned because the law is too vague to be enforced. The three-judge panel found that Mr. Coscia “engaged in 10 weeks of trading” during which his conduct clearly crossed the line drawn by Dodd-Frank.[More…]
Delaware entices corporations with blockchain law by Anne Sherry, J.D. in Jim Hamilton’s World of Securities Regulation
In an effort to continue to attract corporations to the state and curb costly recordkeeping errors, Delaware governor John Carney signed a law to allow corporations in the state to keep records, including the stock ledger, in distributed ledgers, or blockchain. Supporters of the amendments to the Delaware General Corporation Law believe the technology could avert issues like those faced in the Dell appraisal and Dole Food class action. [More…]
Secretary Mattis’ Insights on Ethics by Matt Kelly in Radical Compliance
The message isn’t long: five staccato paragraphs squeezed onto one typewritten page. I haven’t found a copy of the memo posted on the Defense Department website, but it seems authentic, and credible military news organizations such as the U.S. Naval Institute have posted the full text online. [More…]
Should we stop the ‘revolving door’? by Brian Wallheimer in the Chicao Booth Business Review
In a study of SEC lawyers, University of Washington’s Ed deHaan, Rutgers University’s Simi Kedia, Nanyang Technological University’s Kevin Koh, and Columbia University’s Shivaram Rajgopal find that lawyers who left the agency for private law firms were more aggressive than their peers, as evidenced by settlements. DeHaan says that instead of a quid pro quo, those lawyers fall under the human-capital hypothesis. [More…]
And congratulations to Tom Fox on publishing his 2,000th blog post this week.
I began my own blogsite, the FCPA Compliance and Ethics Blog, while continuing to contribute to the FCPA Blog. I also began blogging for Compliance Week and the SCCE Blog. Last month I made it through my 2000th blog posting. To say that I ever thought I would see this day or this many blog posts, would portend a level of clairvoyance that even Carnac the Great could not conceive of pontificating upon. [More…]