On September 10, 2020, the Commodities Futures Trading Commission (CFTC) issued the latest in a series of circulars regarding corporate compliance released this summer by government agencies. In June, the Criminal Division of the Department of Justice (DOJ) issued updated guidance regarding its evaluation of corporate compliance programs (see our prior blog here). In July, DOJ and the Securities and Exchange Commission (SEC) jointly issued an updated Resource Guide to the U.S. Foreign Corrupt …

Corporate & Securities Law Blog

Delaware Court of Chancery Clarifies that Management Cannot Unilaterally Curtail a Director’s Access to Corporation’s Privileged Information

By John Stigi & Alejandro Moreno

September 9, 2020

In In re WeWork Litigation, 2020 Del. Ch. LEXIS 270 (Del. Ch. Aug. 21, 2020) (Bouchard, C.), the Delaware Court of Chancery considered an issue of first impression: Does the management of a Delaware corporation have the unilateral authority to preclude a director from obtaining the corporation’s privileged information? The Court held it cannot. The directors of Delaware corporations are entitled to share in legal advice the corporation receives and, subject to limited exceptions…

Corporate & Securities Law Blog

Fifth Circuit Affirms Dismissal of Section 14(a) Complaint For Failure to Plead Facts Demonstrating Alleged Omissions from Proxy Statement Were Misleading

By John Stigi & Jason Hoggan

August 25, 2020

In Heinze v. Tesco Corp., No. 19-20298, 2020 WL 4814094 (5th Cir. Aug. 19, 2020), the United States Court of Appeals for the Fifth Circuit affirmed the dismissal of a putative class action suit under Section 14(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78(b) alleging that defendant Tesco Corporation (“Tesco”), former members of Tesco’s board of directors and Nabors Industries, Ltd. (“Nabors”) omitted material information from a proxy statement…

Corporate & Securities Law Blog

Ninth Circuit Reverses SEC Disgorgement Award and Remands in First Decision Post-Liu

By Sarah Aberg & Christopher Bosch

August 20, 2020

For the first time outside of the originating case itself, a federal appeals court was called upon to apply the principles governing disgorgement in SEC enforcement actions established by the United States Supreme Court’s high-profile decision in Liu v. Securities & Exchange Comm’n, No. 18-1501, 2020 WL 3405845 (U.S. June 22, 2020) (blog article here). In Securities & Exchange Comm’n v. Yang, No. 19-55289, 2020 WL 4530630 (9th Cir. Aug. 6,…

Corporate & Securities Law Blog

Delaware Court of Chancery Applies the Internal Affairs Doctrine to Deny Stockholder Inspection Rights Under a Foreign State’s Law

By John Stigi & Alejandro Moreno

August 18, 2020

In Juul Labs, Inc. v. Grove, 2020 Del. Ch. LEXIS 264 (Del. Ch. Aug. 13, 2020) (Laster, V.C.), the Delaware Court of Chancery held that the “internal affairs doctrine” bars a stockholder of a Delaware corporation headquartered in a foreign jurisdiction from seeking to inspect corporate books and records pursuant to the statutory law of that foreign jurisdiction. The stockholder is limited instead to the inspection rights and remedies under Section 220 of the…

Corporate & Securities Law Blog

FINRA Settlement Highlights Importance of Anti-Money Laundering Due Diligence and Monitoring

By Sarah Aberg & Christopher Bosch

August 14, 2020

A recent enforcement action offers a glimpse of the Financial Industry Regulatory Authority’s (“FINRA”) expectations for firms conducting anti-money laundering (“AML”) due diligence and transaction monitoring. On July 27, 2020, FINRA settled with broker-dealer JKR & Company (“JKR”) over allegations that the firm failed to detect, investigate, and report suspicious activity in four customer accounts in violation of FINRA Rules 3310(a) and 2010. JKR agreed to a $50,000 fine and a censure to resolve the…

Corporate & Securities Law Blog

Office of the Comptroller of the Currency Affirms Authority of a National Bank to Provide Cryptocurrency Custody Services

By Shane Killeen & Sarah Aberg

July 31, 2020

The Office of the Comptroller of the Currency (“OCC”) recently signaled its approval for banks to fully wade into the cryptocurrency custodian space. On in a July 22, 2020 interpretive letter, the OCC concluded that a national bank may provide cryptocurrency custody services on behalf of its customers, including by holding the unique cryptographic keys associated with cryptocurrency, so long as the institution is able to effectively manage the risks and complies with applicable…

Corporate & Securities Law Blog

Tax Planning Considerations Raised by Election-related Proposals

By Judith Fiorini

July 29, 2020

November is approaching and in an election year, that means candidates are making plans and promises. These promises and plans inevitably include something about taxes; and when it comes to taxes, it pays to be prepared. While we take no position on the candidates or proposals, in the event you are considering the timing of your tax decisions for the balance of the year and 2021, it is important to consider the potential impact of…

Corporate & Securities Law Blog

Board Guidance: Getting To Business Judgment Rule Deference When You Have A Controlling Stockholder

By Kandace Watson, Andrea Ramos & Patrick Quine

July 27, 2020

IN RE DELL TECHNOLOGIES INC. CLASS V STOCKHOLDERS LITIGATION There has been a growing deference in Delaware courts for transactions approved by independent special committees and minority stockholders. In the context of a company with a controlling stockholder, the Delaware Supreme Court has provided guidance in Kahn v. M&F Worldwide Corp.[1] (“MFW”) on how boards can structure special committees and minority stockholder votes to have board decisions adjudicated under the highly deferential protection of…

Corporate & Securities Law Blog

The Impact of COVID-19 on M&A Transactions — Part II: Deal Terms

By Ariel Yehezkel & Allison Wu Troianos

July 27, 2020

The COVID-19 pandemic has caused severe disruption, distress and uncertainty for companies across almost every industry. While this initially resulted in a substantial slow-down in the M&A market, transactional activity is expected to accelerate in certain areas as the economy begins to recover; for example, we expect to see more carveouts by companies that seek to divest non-core assets, acquisitions of distressed companies, financings of independent companies that may have liquidity issues, and divestitures or…

Corporate & Securities Law Blog

Up-to-date Information on Corporate & Securities Law

Blog Authors

CFTC Throws its Hat into the Corporate Compliance Arena

Delaware Court of Chancery Clarifies that Management Cannot Unilaterally Curtail a Director’s Access to Corporation’s Privileged Information

Fifth Circuit Affirms Dismissal of Section 14(a) Complaint For Failure to Plead Facts Demonstrating Alleged Omissions from Proxy Statement Were Misleading

Ninth Circuit Reverses SEC Disgorgement Award and Remands in First Decision Post-Liu

Delaware Court of Chancery Applies the Internal Affairs Doctrine to Deny Stockholder Inspection Rights Under a Foreign State’s Law

FINRA Settlement Highlights Importance of Anti-Money Laundering Due Diligence and Monitoring

Office of the Comptroller of the Currency Affirms Authority of a National Bank to Provide Cryptocurrency Custody Services

Tax Planning Considerations Raised by Election-related Proposals

Board Guidance: Getting To Business Judgment Rule Deference When You Have A Controlling Stockholder

The Impact of COVID-19 on M&A Transactions — Part II: Deal Terms

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