By Porter Wright on A recent Sixth Circuit case, interpreting Ohio law, found that a merger agreement stating that the representations and warranties “shall survive…the Closing until… the second anniversary date of the Closing…,” without more, was not sufficient to modify the statute of limitations for breach of contract claims related to the merger agreement. Fortunately, this issue can … Continue Reading
By Porter Wright on U.S. Attorney General Eric Holder and Citigroup announced today that Citigroup will pay $7 billion to settle a U.S. Department of Justice (DOJ) investigation into allegations that it defrauded investors by selling shoddy mortgages ahead of the financial crisis. The civil settlement does not rule out future criminal charges again Citigroup or individual employees. Citigroup … Continue Reading
By Porter Wright on Prosecutors and the SEC work quite vigorously to recover ill-gotten gains from those who have committed securities fraud, with the ultimate goal of compensating investors. A conviction in a criminal case or judgment in civil case brought by the SEC may result in a large number, like the $53.8 million forfeiture judgment in the criminal … Continue Reading
By Porter Wright on In an Opinion and Order dated February 23, 2012, Judge Michael Mosman adopted the January 11, 2012 Findings and Recommendations of Magistrate Judge John Acosta to dismiss the derivative lawsuit against the Board of Directors of Umpqua Holdings Corporation ("Umpqua") for breach of fiduciary duty. Magistrate Judge Acosta recommendation to dismiss the say-on-pay" lawsuit was … Continue Reading
By Porter Wright on On January 11, 2012, Magistrate Judge John Acosta recommended the dismissal of the derivative lawsuit against the Board of Directors of Umpqua Holdings Corporation ("Umpqua") for breach of fiduciary duty. The lawsuit was filed after the shareholders, in an advisory vote, rejected the Board-approved executive compensation program. The Magistrate Judge found that the plaintiffs failed … Continue Reading
By Porter Wright on Today and tomorrow, the Federal Securities Litigation Blog will take a break from discussing the most recent events and, with a larger-than-usual entry, examine the Top 10 securities litigation stories that were the most intriguing in 2011. Undoubtedly, others will be preparing similar lists and this is not intended to be a definitive or complete … Continue Reading
By Porter Wright on On Wednesday November 2, 2011, several media outlets reported on the details of the settlement in the shareholders derivative action filed against executives of Chesapeake Energy Corporation. The case, which was filed in state court in Oklahoma in April 2009, was on appeal after the claims were dismissed in February 2010. Under the terms of … Continue Reading
By Porter Wright on In a September 20, 2011 Opinion, Judge Timothy Black of the Southern District of Ohio ruled that a lawsuit brought against senior executives and directors of Cincinnati Bell, Inc. alleging a breach of fiduciary duty regarding compensation would be allowed to proceed. The lawsuit focuses on the "say-on-pay" provisions of the Dodd-Frank Act: specifically, attacking … Continue Reading
By Porter Wright on On Tuesday, September 6, the SEC announced that it is not seeking rehearing of the decision by the D.C. Circuit Court of Appeals invalidating Exchange Act Rule 14a-11. That Rule, which was previously discussed here, allowed 3% shareholders (or larger) to use the company proxy statement to nominate directors. As discussed here, on Friday, July … Continue Reading
By Porter Wright on On Friday, July 22, 2011, the D.C. Circuit Court of Appeals issued an Opinion vacating Exchange Act Rule 14a-11. Business Roundtable v. SEC, No. 10-1305, slip op. (D.C. Cir. Jul. 22, 2011). The Rule, which was previously discussed here, allowed 3% shareholders (or larger) to use the company proxy statement to nominate directors.… Continue Reading
By Porter Wright on On Tuesday, July 19, 2011, the Wall Street Journal ran an interesting article by Gina Chon entitled "Judges Making Lawyers Earn It," discussing trends in fee awards in lawsuits challenging mergers and acquisitions in the Delaware Court of Chancery, finding that: In recent months … the court’s judges have been more discerning, according to plaintiffs … Continue Reading
By Porter Wright on Earlier this month ISS updated its 2011 corporate governance policies, which apply to shareholder meetings held in February or later. Key updates include: Say on Pay Votes. ISS will recommend annual say on pay votes, but it is unclear what action ISS will take if shareholders approve biennial or triennial votes. Companies that support triennial … Continue Reading
By Porter Wright on The Senate voted yesterday to approve an amendment to Senator Dodd’s financial reform bill that preserves the current mechanics of a securities offering under Rule 506 of Regulation D. The original language of the bill would have required a 120 day period for the SEC to review the filings of companies seeking to raise money … Continue Reading
By Karim Ali on On Wednesday, June 10, Secretary of the Treasury, Timothy Geithner outlined the Obama administration’s new proposals on executive compensation. The proposals focused on greater independence of corporate compensation committees and giving shareholders a nonbinding vote on executive compensation, commonly known as ‘say on pay’ provisions. Geithner outlined five guiding principals for executive compensation, namely: compensation … Continue Reading
By Porter Wright on While certainly not the first company to use some version of an electronic shareholder forum, Intel is apparently the first company to use Broadridge to help Intel host a virtual shareholder meeting and an electronic shareholder forum. Maybe third-party hosting of these e-forums is the next step in what has been a predicted trend for … Continue Reading
By Porter Wright on RiskMetrics Group discusses here an NYSE rule change that will no longer allow brokers to vote uninstructed client shares in uncontested director elections. The new rule is scheduled to take effect for the 2010 proxy season, but groups such as Business Roundtable and the Society of Corporate Secretaries & Governance Professionals argue it will disenfranchise … Continue Reading
By Porter Wright on As reported at The Corporate Counsel earlier this week, SEC Commissioner Luis Aguilar has recently lamented the fact that there was a sharp decrease last year in the number of retail investors who voted their proxies. The drop is attributed to the new e-proxy rules. Apparently, most retail shareholders are less likely to participate in … Continue Reading
By Porter Wright on As 2009 begins, perhaps the best indicator of board structure and corporate governance trends is the annual review of boards of directors recently completed by RiskMetrics Group. RiskMetrics has compiled data from last year’s proxy statements at S&P 1,500 companies, yielding the following trends: 50% of companies continue to have classified boards, down 2% from … Continue Reading
By Porter Wright on Xcel Energy has agreed to expand its disclosure of risks associated with climate change in its filings with the SEC. The announcement by Xcel comes in response to a subpoena issued by New York Attorney General Andrew Cuomo seeking information on the company’s plans to build an electric power plant in Pueblo, Colorado. The most … Continue Reading
By Porter Wright on RiskMetrics Group—a significant source of proxy voting guidance for institutional investors—has published its Preliminary U.S. Postseason Report for the 2008 proxy season. The report indicates that before the most recent proxy season, analysts were predicting increases in “shareholder discontent.” Shareholders were expected to increasingly withhold votes for incumbent directors; however, this did not happen, and … Continue Reading
By Porter Wright on Earlier this week Aflac became the first large US company to offer shareholders the opportunity to approve compensation for top executives. Faced with an up or down vote, the shareholders resoundingly approved the $12 million pay package by a vote of 93 percent. Institutional investors and shareholder services have pushed proposals to give shareholders the … Continue Reading
By Porter Wright on As the Green Movement continues, more institutional investors are becoming concerned with the potential costs and risks of investing in projects that produce high amounts of carbon. This was the topic of a recent meeting of investors in New York organized by the United Nations Foundation and Ceres, a coalition of investors and environmental groups. … Continue Reading
By Porter Wright on Earlier this week the U.S. Supreme Court ruled in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. that stockholders cannot sue third parties that participate in a securities fraud scheme because the stockholders have not directly relied on the advice of the third parties. Such third parties potentially include banks, accountants, and law firms. The law … Continue Reading
By Porter Wright on RiskMetrics Group, an international company that advises institutional investors on the corporate governance policies of publicly traded companies, has announced its 2008 proxy voting policies updates. The updates will apply to all companies with shareholder meeting dates after February 1, 2008. The updates explain how RiskMetrics Group’s ISS Governance Services unit determines whether to support … Continue Reading
