More than four years after the financial crisis, exposure to investigations and lawsuits remains real for individuals serving as directors and officers of public companies. Fortunately, the general rule still holds true that directors and officers rarely contribute to settlements and judgments out of their personal assets. However, the last four years have brought a steady wave of litigation and an increased enforcement focus from regulators. In addition to ongoing litigation stemming from the financial crisis, public companies have faced an uptick in shareholder litigation involving M&A transactions, claims brought in foreign jurisdictions, lawsuits challenging their executive compensation practices and proxy disclosures, and record levels of enforcement activity und
Client Alert | July 15, 2013
I. Overview of the First Half of 2013The first six months of 2013 represented a time of transition for the SEC's enforcement program, with a new Chairman and new Co-Directors for the Division of Enforcement at the helm. It is too soon to predict exactly how they may reshape the program – in contrast with this period four years ago, when Chairman Mary Schapiro and Enforcement Director Robert Khuzami assumed their positions in the wake of Madoff and the financial crisis and with a mandate for major reform, the new team is moving more incrementally. However, there can be little doubt that, when it comes to enforcement, the new leadership will be striking an aggressive tone. For the first time in the Commission's history, the Chairman and the Enforcem
Client Alert | July 15, 2013
San Francisco partner Marc Fagel and New York associate Kenneth Burke are the authors of “Seven Recommendations to Assist Private Fund Managers in Navigating Heightened SEC Examination and Enforcement Activity” [PDF] published in The Hedge Fund Law Report on July 11, 2013.
Client Alert | July 11, 2013
Shareholder proposals continued to attract significant attention during the 2013 proxy season. This client alert provides an overview of shareholder proposals submitted to public companies during the 2013 proxy season, including statistics, notable decisions from the staff (the "Staff") of the Securities and Exchange Commission (the "SEC") on no-action requests and other Staff guidance, majority votes on shareholder proposals and litigation seeking to exclude shareholder proposals. 1. Shareholder Proposal Statistics and Voting ResultsAccording to data from Institutional Shareholder Services ("ISS"), shareholders submitted approximately 820 proposals to date for 2013 shareholder meetings, up from ap
Client Alert | July 9, 2013
Effective June 30, 2013, the German Administrative Offences Act ("OWiG") was considerably sharpened. Its changes were part of the most recent Amendment of the German Act against Restraints of Competition (on the anti-trust aspects see our Alert, "8th Amendment of the Act Against Restraints of Competition in Germany". The changes substantially increase the scope of liability of corporations for typical compliance violations that have been committed by the corporation's employees (e.g.
Client Alert | July 9, 2013
On June 25, 2013, the Delaware Court of Chancery upheld the facial validity of corporate bylaws, adopted by the boards of directors of Chevron Corporation and FedEx Corporation, that select Delaware as the exclusive forum for derivative suits and other litigation concerning the corporations' internal affairs. In an opinion captioned Boilermakers Local 154 Retirement Fund v.
Client Alert | June 28, 2013
At the recently concluded G8 Summit at Lough Erne, Northern Ireland, leaders of the G8 economies agreed new measures to clamp down on money-laundering, tax evasion and tax avoidance, including the G8 Action Plan to prevent the misuse of companies and legal arrangements (the "Action Plan").The Action PlanThe agreed Action Plan sets out eight core principles designed to ensure the integrity of beneficial ownership and basic company information and the timely access to that information by law enforcement and tax authorities.
Client Alert | June 20, 2013
Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and new Commodity Futures Trading Commission (CFTC) rules require that, subject to certain exceptions, swap counterparties clear swaps at a clearing house and execute them on a facility or exchange. One of these exceptions is the "end-user exception," which may be available for companies that are not "financial entities" and that use swaps to manage risk. There are several requirements that these entities must meet in order to rely on the end-user exception. For public companies, these include taking certain governance steps that involve board-level approval of the company's use of uncleared swaps and review of company policies on swaps. With the CFTC clearing requ
Client Alert | June 17, 2013
On May 30, 2013, the SEC’s Division of Corporation Finance issued 12 Frequently Asked Questions (“FAQs”) on its conflict minerals rules (Exchange Act Section 13(p), Rule 13p-1 and Item 1.01 of Form SD), which are detailed in our client alert available here. The full set of FAQs is available here. The SEC also issued nine other FAQs relating to the SEC’s resource extraction rules (Exchange Act Section 13(q), Rule 13q-1 and Item 2.01 of Form SD), which were adopted at the same time as the conflict minerals rules and require resource extraction issuers to disclose certain payments made to governments for the commercial development of oil, natural gas or minerals. Those FAQs are available here. Several of the FAQs will be particularly useful to co
Client Alert | June 3, 2013
On May 29, 2013, Chancellor Leo E. Strine, Jr. of the Delaware Court of Chancery issued an important decision that lays the foundation for controlling stockholders to pursue going-private merger transactions with the comfort that, if certain conditions are met, such transactions will be reviewed under the deferential business judgment rule standard, rather than the exacting entire fairness standard.
Client Alert | May 31, 2013
London partners Jeffery Roberts and Selina Sagayam and associate Gareth Jones are authors of "Shareholder Activism in the U.K. - an Introduction" [PDF] published in the May 2013 issue of Wall Street Lawyer.
Client Alert | May 31, 2013
A discussion of the Commodity Futures Trading Commission's (CFTC) new rulemakings in 2013 and how Title VII has increased the CFTC's power to create and police the derivatives markets.
Client Alert | April 22, 2013
Dallas partner Robert Little and associate Caitlin Peterson are the authors of “How Would Delaware Courts Treat Fiduciary-Out Provisions?” [PDF] published in the April 17, 2013 issue of the Delaware Business Court Insider.
Client Alert | April 17, 2013
As we have seen in 2012 and now in 2013, the attention paid to cyber-security has reached new heights--hacking, data privacy, and cyber-espionage have continued their prominence in daily headlines, but cyber-security took on unprecedented importance when President Obama focused on it in his State of the Union address. Announcing a new executive order to increase sharing of critical cyber information and calling for legislative action to protect our networks and data, President Obama explained:America must also face the rapidly growing threat from cyber-attacks.
Client Alert | April 16, 2013
On April 2, 2013, the Securities and Exchange Commission (the "SEC") issued a report of investigation pursuant to Section 21(a) of the Securities Exchange Act of 1934 providing guidance to public companies on the application of Regulation FD to corporate disclosures made through social media (the "Report").
Client Alert | April 15, 2013
This alert provides a comparison of the options now available for an issuer seeking to access the UK's equity capital markets, with a focus on the new "High Growth Segment" of the London Stock Exchange's Main Market.
Client Alert | April 12, 2013
Throughout the first few months of 2013, each standing committee in the House of Representatives drafted and distributed its oversight agenda for the next two years.
Client Alert | April 2, 2013
Having transformed U.S. bank regulation, Dodd-Frank implementation is now reshaping bank corporate governance. Recent rulemakings and proposals by the Board of Governors of the Federal Reserve System (Federal Reserve) point to a far more prescriptive approach to corporate governance for significant bank holding companies and significant foreign banking organizations with U.S.
Client Alert | March 21, 2013
This alert provides a summary of certain principles of English law and UK and European regulation applicable to UK-listed public companies and their shareholders that may affect shareholder activism, namely (i) stake-building, (ii) shareholders' rights to require companies to hold general meetings, (iii) shareholders' rights to propose resolutions at annual general meetings and (iv) recent developments in these and related areas.
Client Alert | March 15, 2013
Significant Consequences for Counterparties to Derivatives ContractsToday, a number of the principal obligations of The European Market Infrastructure Regulation ("EMIR") have entered into force with immediate effect, with wide-ranging consequences for all entities dealing in derivatives related to or affecting the European Economic Area.
Client Alert | March 15, 2013
This alert provides a brief overview of the European Alternative Investment Fund Managers Directive 2011/61/EU (the "AIFMD") for alternative investment fund managers ("AIFMs") whose registered office is not in a European Union Member State (a "Non-EU AIFM").A.
Client Alert | March 7, 2013
The Financial Services Act 2012 (the "Act"), which comes into force on 1 April 2013, contains the UK government's reforms of the UK financial services regulatory structure and will create a new regulatory framework for the supervision and management of the UK's banking and financial services industry.
Client Alert | March 4, 2013
On February 27, 2013, the U.S. Supreme Court held that, in securities class actions challenging false or misleading statements, the plaintiff need not prove that the alleged misstatements were material in order to obtain class certification using the so-called fraud-on-the-market presumption of reliance.
Client Alert | March 1, 2013
Washington, D.C. partner Stephen Glover and Washington, D.C. associate Aarthy Thamodaran are authors of “Debating the Pros and Cons of Dual Class Capital Structures” [PDF] published in the March 2013 issue of Insights.
Client Alert | March 1, 2013
On February 27, 2013, the U.S. Supreme Court unanimously concluded that the five-year limitations period for federal enforcement actions seeking civil penalties, such as those brought by the SEC, begins to run when the alleged fraud occurs, not when it is discovered. In an opinion authored by Chief Justice Roberts in Gabelli v. Securities and Exchange Commission, No.
Client Alert | February 27, 2013
Gibson Dunn outlines the trend of shareholder lawsuits related to executive compensation disclosures and suggests strategies for addressing this new proxy litigation.
Client Alert | February 26, 2013
New York partners Brian Gingold and Eduardo Gallardo, and associate Stephenie Gosnell Handler are the authors of “In re Novell: Directors’ Bad Faith in a Sale Process” [PDF] published in the Delaware Business Court Insider on February 20, 2013.
Client Alert | February 20, 2013
Orange County partner James Moloney, Century City partner Ari Lanin, and Los Angeles associate Jamie Gowell are the authors of “Inside the SEC: Highlights from the 40th Annual Securities Regulation Institute” [PDF] published in the February 2013 issue of Aspen's Insights.
Article | February 15, 2013
Gibson Dunn, in conjunction with seven other law firms, has issued guidance on New Section 13(r) Disclosures: Eight Law Firm Consensus Report Gibson Dunn's lawyers are available to assist in addressing any questions you may have about these developments.
Client Alert | February 7, 2013
Benno Schwarz, Michael Walther and Mark Zimmer of Gibson Dunn are hosts of the Munich Compliance Academy Webcast Series. Please view the webcast materials (in German) below.
Webcasts | January 31, 2013
Institutional Shareholder Services ("ISS") and Glass, Lewis & Co., Inc. ("Glass Lewis"), the two major proxy advisory firms, recently released updates to their proxy voting policies for the 2013 proxy season. The ISS U.S.
Client Alert | January 29, 2013
2012 proved to be a mixed year for defendants in securities litigation, with several open questions and rare causes for optimism. The raw statistics show a steady stream of new filings, increasing median settlement amounts, and relatively low dismissal rates for existing cases.
Client Alert | January 24, 2013
On December 21, 2012, the Commodity Futures Trading Commission ("Commission" or "CFTC") approved with a vote of 4-1 (Commissioner Sommers dissented) a final exemptive order entitled "Final Exemptive Order Regarding Compliance with Certain Swap Regulations," (the "Final Order") granting temporary conditional relief from certain provisions of the Commodity Exchange Act ("CEA") and the Commission's regulations with respect to non-U.S.
Client Alert | January 23, 2013
A series of recent articles in the Wall Street Journal have focused on corporate executives who traded in their companies' stock. According to the Journal, some corporate executives who traded in their companies' stock realized gains or avoided losses during the week prior to significant corporate news.
Client Alert | January 22, 2013
In retrospect, 2012 likely will be remembered as another year of manifold challenges in the Eurozone and of slow consolidation rather than one of fundamental reform or renaissance.
Client Alert | January 10, 2013
In many respects, 2012 was another year of aggressive SEC enforcement. The SEC's Division of Enforcement again logged a near record number of enforcement actions. More important, the cases reflected a marked increase in the number and proportion of actions against registered investment advisers and broker-dealers, and their associated persons. This increased focus derives from a culmination of factors, including Enforcement's creation of specialized units for the asset management industry and for structured products, the hiring of industry experts, and the close collaboration between staff from Enforcement and the SEC's Office of Compliance Inspections and Examinations ("OCIE"). With the expansion of the registered private fund adviser population under fin
Client Alert | January 9, 2013
The Iran Threat Reduction and Syria Human Rights Act (the "Threat Reduction Act"), enacted on August 10, 2012, imposes new liabilities on U.S.
Client Alert | December 19, 2012
Dallas partner Robert Little and associate Chris Babcock are the authors of “Walking the High Wire: Guidelines for Board of Director Designees Of Private Equity Funds, Activist Stockholders and Other Investors” [PDF] published in the December 10, 2012 issue of Bloomberg/BNA's Securities Regulation & Law Report.
Client Alert | December 10, 2012
The UK Financial Services Authority Publishes Consultation Paper on Implementation of AIFMD On November 14, 2012, the UK Financial Services Authority ("FSA") published the first part of its long-awaited consultation paper "CP 12/32 Implementation of the Alternative Investment Fund Managers Directive ("AIFMD") Part 1" ("CP 32").
Client Alert | November 23, 2012
We promised to keep you updated on the legal and regulatory developments which we identified as pending developments in our Alert "From the Shareholders' Spring to the Autumn of Activism .
Client Alert | November 6, 2012
With the arrival of fall, calendar-year companies are gearing up for what promises to be another busy proxy season, preparing for new rules that will impact their disclosures and governance practices, and planning their 2013 board and committee calendars.
Client Alert | November 2, 2012
The European Union has adopted a new regulation on short selling and certain aspects of credit default swaps (Regulation (EU) 236/2012) (the "Regulation").
Client Alert | October 30, 2012
The New York Stock Exchange ("NYSE") and NASDAQ Stock Market ("NASDAQ") released their proposed compensation committee and compensation adviser independence listing standards on September 25, 2012.
Client Alert | October 24, 2012
On October 15, 2012, Institutional Shareholder Services ("ISS"), a leading proxy advisory firm, issued for comment certain proposed 2013 proxy voting policy changes.
Client Alert | October 16, 2012
On October 16, 2012, the staff of the Securities and Exchange Commission (the "Staff") issued Staff Legal Bulletin No. 14G (Oct.
Client Alert | October 16, 2012
On September 28, 2012, the Financial Industry Regulatory Authority, Inc. ("FINRA") (f/k/a National Association of Securities Dealers, Inc. ("NASD")) filed proposed rule changes to NASD Rule 2711 with the Securities and Exchange Commission (the "SEC").
Client Alert | October 11, 2012
Yesterday's Press has variously reported the 9 October 2012 announcement by the SFO of revisions to its published guidance relating to facilitation payments, corporate hospitality and self-reporting under titles such as "SFO toughens stance on bribery", "Companies face bribery crackdown after new SFO rules" and "UK fraud buster tells firms no more cosy chats".
Client Alert | October 11, 2012
On September 25, 2012, Vice Chancellor Travis Laster of the Court of Chancery of the State of Delaware dismissed the derivative complaint in South v. Baker, C.A.
Client Alert | October 2, 2012
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Client Alert | September 19, 2012
At an open meeting held on August 22, 2012, the Securities and Exchange Commission (“SEC”) voted to approve final rules regarding disclosure and reporting requirements with respect to the use of “conflict minerals” to implement Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The final rules were adopted by a vote of 3 to 2, with Commissioners Paredes and Gallagher dissenting. The adopting release containing the final rules is available here.
Client Alert | September 14, 2012