Financial Regulatory Forum

SEC’s boardroom bombshell: directors can be costly

Traders work in the Goldman Sachs stall on the floor of the New York Stock Exchange July 16, 2010.  REUTERS/Brendan McDermidNEW YORK, March 4 (Westlaw Business) Being an insider with a fiduciary duty sure is risky, as heavyweight Rajat Gupta is now finding out amidst serious SEC charges. So is having board members, as Goldman Sachs and Procter and Gamble are now worrying. Of great concern to each are the reputational risks and attendant costs that this might impose on them. The potential risks could relate to a broad range of issues, ranging from inside information, to disclosure of SEC investigation and board member protection. Though this likelihood may seem remote, recent experiences from Bank of America to Goldman Sachs itself show them to be painfully possible.

With a plot literally ripped from the headlines and a narrative crackling like a Law & Order script, the Commission has charged Gupta in the spreading Galleon insider trading scandal. The case links Berkshire Hathaway, Goldman Sachs and Procter and Gamble (P&G) to what is shaping up to be one of the biggest non-Madoff financial crime stories of the young century. (more…)

SEC is watching, on the Web, for sanctions evaders

Feb. 25 (Westlaw Business) Big Brother has his eye on more than just filings: He is also surfing the Web to corroborate corporate disclosures. Staff correspondence filed by Scottsdale-based Hypercom Corp. shows that when it comes to rooting out potential sanctions-evaders in Iran and Syria, the Securities and Exchange Commission keeps close tabs. (more…)

Protests in Middle East, North Africa spur look at corporate risk disclosures globally -Westlaw Business

A man prays for demonstrators who were injured after riot police stormed an anti-government protest camp, outside the Salmaniya hospital where the casualties were sent to, in Manama February 17, 2011. Troops took control of Manama on Thursday after riot police stormed the anti-government protest camp at dawn and fought demonstrators on the streets, killing four people in Bahrain's worst violence in decades. REUTERS/Hamad I MohammedFeb. 18 (Westlaw Business) The winds of change blowing across the Northern Sahara all but demand a look at foreign operations disclosures, particularly as many companies are deeply entrenched in preparing this year’s annual reports. Political risk has many guises—war, expropriation, currency devaluation—but for companies doing business abroad, these risks don’t begin to give a complete picture of potential threats to earnings. Just six weeks into 2011, a number of well-known companies have already provided a glimpse of what’s keeping their board members awake at night.

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