Dodd-Frank.com

Final Rules Permit FDIC to Clawback Compensation Based on Negligence for Covered Financial Companies

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The FDIC has adopted final rules which provide that the FDIC, as receiver of a covered financial company, may recover from senior executives and directors who were substantially responsible for the failed condition of the company any compensation they received during the two-year period preceding the date on which the... Read More

Topics: Banking, Employment, Executive Compensation, Litigation

Test Your Knowledge of the Whistleblower Rules

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Consider these hypothetical facts:  Joe Ledger, an accountant at HighTech Co., an exchange traded company, finds some evidence of some mysterious transactions that occurred in the fourth quarter of 2010, indicating that revenue may have been improperly inflated.  In accordance with HighTech’s policy, Joe reports this information to Pete Flyspeck,... Read More

Topics: Employment, Litigation, Public Companies and Securities

First Dodd-Frank Whistleblower Case May Impact Internal Investigations

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[Update:  The case against TradingScreen was ultimately dismissed.  Interested readers should refer to subsequent case history.] Egan v. TradingScreen Inc. (S.D.N.Y. May 4, 2011) is the first case dealing with the Dodd-Frank Act’s whistleblower provisions that we are aware of.  Plaintiff Patrick Egan was employed by TradingScreen.  It seems to fall... Read More

Topics: Employment, Litigation, Public Companies and Securities

SEC “Dodd-Franks” Gupta

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Section 929P of the Dodd-Frank Act amended, among other things, Section 21B(a) of the Securities Exchange Act to permit the SEC to impose civil monetary penalties in administrative cease-and-desist proceedings before an administrative law judge.  The provision eliminates the need for the SEC to seek a court order imposing civil... Read More

Topics: Litigation

SEC Settles Clawback Claim With Beazer Homes CEO

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The SEC has announced a settlement with the chief executive officer of an Atlanta-based homebuilder to recover several million dollars in bonus compensation and stock profits that he received while the company was committing accounting fraud. According to the SEC’s complaint filed in federal court in Atlanta, CEO Ian J.... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities

Court Holds Dodd-Frank Ban on Arbitration of Whistleblower Claims is Retroactive

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In Pezza v. Investors Capital Corp., (D. Mass. Civ. Ac. No. 10-10113-DPW), the plaintiff claimed he was wrongfully retaliated against, in violation of the Sarbanes-Oxley Act, after having raised concerns regarding misconduct by the defendants in connection with securities transactions.  The defendants raised the obligation to arbitrate as an affirmative... Read More

Topics: Employment, Litigation, Uncategorized

First Public Company Receives Benefit of SEC Cooperation Policy—Implications for Whistleblower Claims

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The first public company received credit for its cooperation as a result of the SEC’s policy with respect to cooperation in investigations and enforcement actions announced in January 2010.  The public company, Carter’s, Inc., entered into a non-prosecution agreement.  The SEC charged a former Executive Vice President of Carter’s Inc.... Read More

Topics: Banking, Broker-Dealer, Employment, Insurance, Litigation, Public Companies and Securities