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When You Think FINANCIAL REFORM,Think Fulbright.TM
August 12, 2010
How the New Financial Reform Legislation Affects Publicly Held
Companies: Disclosure, Corporate Governance,
Enforcement and Other Requirements
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Today’s Presenters
Darryl Anderson
Partner, Fulbright & Jaworski L.L.P.Houston
Harva Dockery
Partner, Fulbright & Jaworski L.L.P.Dallas
Gregg Berman
Partner, Fulbright & Jaworski L.L.P.New York
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Gregg Berman
Corporate PartnerFulbright & Jaworski [email protected]
Harva Dockery
Corporate PartnerFulbright & Jaworski [email protected]
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Dodd–Frank
Although aimed at the financial regulatory system, the Act will affect most public companies
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What You Need to Know
Corporate Governance Executive Compensation
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Provisions Related to Corporate Governance
Proxy Access : Not mandated but enabled CEO / Board Chairman Structure Disclosure Broker Voting Say on Pay Say on Golden Parachutes Enhanced Compensation Committee Standards Clawback Policy
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Provisions Requiring Enhanced Disclosure
Pay vs. Performance Internal Pay Ratio Hedging
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Other Aspects
Revised “accredited investor” definition
Timing and What Now?
Dodd-Frank Impact on Enforcement
Increased Governmental Enforcement
Increased Private Litigation
Rulemaking Process
Whistleblower Provision
“In any covered judicial or administrative action, or related action, the Commission . . . shall pay an award or awards to 1 or more whistleblowers who voluntarily provided original information to the Commission that led to the successful enforcement of the covered judicial or administrative action, or related action, an aggregate amount equal to—
(A) not less than 10 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions; and
(B) not more than 30 percent, in total, of what has been collected of the monetary sanctions imposed in the action or related actions.”
Whistleblower Qualifications
Original information Led to successful enforcement action $1 million or more in aggregated sanctions Cannot be criminally convicted in relation to same
scheme Cannot be used to circumvent SOX reporting
requirements for auditors
Scope of Whistleblower Qualifying Activities
Anything enforceable by the SEC is subject to a whistleblower report
Protections Afforded Whistleblowers
Anti-retaliation provision No arbitration May proceed anonymously No reasonable basis for report required?
Administrative Proceedings
Monetary penalties available
Administrative proceedings a more viable forum
Expanded Substantive Liability
Aiding and Abetting Liability
Extraterritorial Enforcement Jurisdiction
Criminal Provisions
Statute of Limitations Extended
Review of Sentencing Guidelines
Sources of Increased Private Litigation
Increased disclosure obligations
Whistleblower actions
Potential restrictions on arbitration clauses
What the Future Holds
Rulemaking authority could lead to further increases
● Study of effect of arbitration provisions
● Study of fiduciary standards for broker-dealers
● Study of private aiding and abetting cause of action
Protecting Your Business from Increased Exposure in the Dodd-Frank World
Review and revise compliance programs
Make employee hotlines user-friendly
Evaluate use of arbitration provisions and implement protections
Stay abreast of the rulemaking activities that impact your business
Dodd-Frank and Diversity
Establishment of Offices of Minority and Women Inclusion for each agency
Duties of each office director
Procedures for review and evaluation of contract proposals and hiring service providers
Ability to cancel contracts
Promotion of diversity in each agency's workforce
Annual reports to Congress from each office
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Continuing Education Information
If you are requesting CLE credit for this presentation, please complete the evaluation that Fulbright will send via email tomorrow.
If you are viewing a recording of this web seminar, most state bar organizations will only allow you to claim self-study CLE. Please refer to your state’s CLE rules. If you have any questions regarding CLE approval of this course, please contact your bar administrator.
NY CLE Number 100812 If you should have any questions regarding credit, please
email Victoria Beard at [email protected]
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Questions?
Darryl Anderson
Partner, Houston
Fulbright & Jaworski L.L.P.
713 651 5562
Gregg Berman
Partner, New York
Fulbright & Jaworski L.L.P.
212 318 3388
Harva Dockery
Partner, Dallas
Fulbright & Jaworski L.L.P.
214 855 8369
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When You Think FINANCIAL REFORM,
Think Fulbright.TM
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www.fulbright.com • 866-FULBRIGHT [866-385-2744]
