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Government Enforcement Exposed - "The GEE"
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22 Aug 2014 The Wal-Mart Decision: Just How Big a Blow did the Delaware Supreme Court Deal to Corporations?

  In a much-anticipated decision, the Delaware Supreme Court recently affirmed a trial court holding that, in limited circumstances, a shareholder can obtain privileged corporate documents relating to a company’s internal investigation. While the opinion is groundbreaking in its adoption and affirmation of the “fiduciary exception” to the attorney-client privileged, corporations still retain several layers of protection against disclosure and likely have less reason to fear this decision than a cursory reading might suggest.   In Wal-Mart Stores, Inc. v. Indiana Electrical Workers Pension Trust Fund IBEW, the court held that a Walmart shareholder was entitled to review Wal-Mart’s privileged internal investigation documents relating to its FCPA investigation. The shareholder sought the documents through a Section 220 inquiry – which permits shareholder inspection of books…

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19 Aug 2014 Conviction of Private Investigators in China Further Complicates Anti-Corruption Compliance Efforts

  The recent convictions of Peter Humphrey and his wife and business partner Yu Yingzeng demonstrate the risks corporate investigation firms face in China when they obtain or pass on information on Chinese citizens. But perhaps even more alarming for U.S. companies is the effect of such prosecutions on their efforts to comply with the Foreign Corrupt Practices Act and other anti-corruption laws, as these types of convictions stand to have a chilling effect on both companies’ due diligence efforts and their internal investigations into allegations of bribery and fraud in China.   Mr. Humphrey, a British citizen, and Ms. Yu, a Chinese citizen, were convicted of trafficking in personal information of Chinese citizens between 2009 and 2013 through their company ChinaWhys. ChinaWhys, which still…

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15 Aug 2014 Regulators And Prosecutors Discuss Securities and Commodities Enforcement Priorities

  In late July, we attended a seminar at which David Glockner, the new Director of the Securities and Exchange Commission’s Chicago Regional Office, Scott Williamson, a Deputy Regional Counsel in the Commodity Futures Trading Commission’s Chicago Office, and Cliff Histed, an Assistant United States Attorney in the newly-formed Securities and Commodities Fraud Section in Chicago spoke. The three men shared their views on enforcement trends in the securities and commodities industry. It was an insightful discussion, from which we have distilled a few of the nuggets of wisdom they shared.   SEC Enforcement Priorities   To begin with, Mr. Glockner shared the SEC’s enforcement priorities. He emphasized (no surprise here) that the SEC’s traditional mission of investor protection remains paramount. Next, he alerted the…

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07 Aug 2014 JUDGE RAKOFF CONTINUES TO QUESTION ADEQUACY OF JUDICIAL OVERSIGHT OF SEC

  On remand of his rejection of the proposed Consent Judgment between the SEC and Citigroup Global Markets, Judge Jed Rakoff of the United States District Court for the Southern District of New York expressed additional misgivings about effective judicial oversight of the SEC.   In his opinion issued August 5, 2014, Judge Rakoff noted that the Court of Appeals “who must be obeyed have spoken, and this Court’s duty is to faithfully fulfill that mandate.”  In faithfully fulfilling that mandate and approving the Consent Judgment, however, Judge Rakoff expressed his “fears that, as a result of the Court of Appeal’s decision, the settlements reached by governmental regulatory bodies and enforced by the judiciary’s contempt powers will in practice be subject to no meaningful oversight…

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