Regulatory & Compliance

Adam Goldberg, David Oliwenstein and Tony Phillips provide advice on mitigating the risk of legal violations and being ready for an investigation The US Department of Justice (DoJ) and the SEC have in recent years ramped up corporate enforcement in the areas of cyber-security, AI, financial crime, corruption, sanctions and trade controls. This impacts public and private companies and they – along with their boards – face increasingly complex legal and compliance obligations. SEC and DoJ priorities The available metrics confirm that enforcement authorities are taking an increasingly aggressive approach to policing corporate misconduct. In 2022, the SEC imposed combined…

This week’s governance, compliance and risk-management stories from around the web – CNBC reported that activist investor Carl Icahn and his company agreed to pay $2 mn to settle SEC allegations that he failed to disclose billions of dollars’ worth of personal margin loans pledged against the value of his Icahn Enterprises stock. Icahn and the publicly traded company that bears his name settled without admitting or denying wrongdoing, agreeing to pay $500,000 and $1.5 mn, respectively, in fines. The SEC said Icahn pledged between 51 percent and 82 percent of Icahn Enterprises’ shares outstanding to secure billions of dollars…

European Commission white paper aims to provide more clarity to companies If you are heading off to or on your summer vacation and in search of the next thrilling read, look no further than the European Commission’s (EC) latest release: the FAQs on CSRD. That’s right, the commission picked the popular vacation month of August to drop a 52-page document including 90 questions and answers that aim to resolve any doubts you may have about CSRD and the related European Sustainability Reporting Standards (ESRS). The Q&A appeared online at a time when, even if you are not on vacation, you…

Jane Storero explains the practical steps boards and compensation committees need to take In June 2023, the SEC approved a new exchange listing standard for public companies under the Dodd-Frank Act that was adopted by the NYSE and Nasdaq to require listed companies to adopt a clawback policy by December 1, 2023. This policy applies to incentive-based compensation erroneously received by executive officers during the three years prior to an accounting restatement. Now that companies have adopted a clawback policy and filed it as an exhibit to the annual report, boards and compensation committees must determine how to oversee the…

This week’s governance, compliance and risk-management stories from around the web – Reuters (paywall) reported that President Joe Biden proposed sweeping changes to the US Supreme Court, including term limits and a binding code of conduct, but a divided Congress means the proposals have little chance of becoming law. Biden called on Congress to pass binding, enforceable rules that require the justices to disclose gifts, refrain from public political activity and recuse themselves from cases in which they or their spouses have financial or other conflicts of interest. He also urged the adoption of an 18-year term limit for the…

More than nine in 10 companies ready to meet regulation requirements, research finds The four letters of the EU’s Corporate Sustainability Reporting Directive (CSRD) acronym have been almost as much a buzzword in 2024 as AI. Members of the European investment community and those who work for non-EU listed companies that have activities in the bloc face a new ‘burden of compliance’: CSRD came into force in 2023 and has applied since the start of this year. But if in 2023 many independent surveys found that at least six in 10 companies didn’t feel ready for CSRD, the same question…

This week’s governance, compliance and risk-management stories from around the – Reuters (paywall) reported that Southwest Airlines added aviation industry veteran Rakesh Gangwal to its board. ‘Rakesh’s expertise in travel technology will be valuable as we continue to make investments that support our operations and strategic initiatives,’ said Gary Kelly, executive chair of Southwest’s board. Activist investor Elliott Investment Management has called for a reconstitution of Southwest’s board with ‘new, truly independent’ directors possessing expertise in airlines, customer experience and technology. – CNBC reported that Elliott said it would launch a proxy fight to push for change at Southwest Airlines…

This week’s governance, compliance and risk-management stories from around the web – The Wall Street Journal (paywall) reported that the EU has accused Apple of failing to comply with a new digital-competition law, alleging that the company’s App Store isn’t allowing developers to freely direct customers to alternative ways to make purchases. The charges are the first to be issued under the EU’s Digital Markets Act, which took effect earlier this year and includes rules intended to boost competition in digital advertising, online search and app ecosystems. The EU refers to the charges as preliminary findings. Apple could be fined…

This week’s governance, compliance and risk-management stories from around the web – The Wall Street Journal (paywall) reported that Adidas said it is investigating potential compliance violations in China after receiving a letter alleging senior executives in the country received millions of dollars in kickbacks from service providers. Adidas said it is now investigating the matter with external legal counsel. ‘Adidas takes allegations of possible compliance violations very seriously and is clearly committed to complying with legal and internal regulations and ethical standards in all markets where we operate,’ a spokesperson said. – Reuters (paywall) reported that US District Court…

This week’s governance, compliance and risk-management stories from around the web – The Guardian reported that a group of current and former employees at prominent AI companies released an open letter warning about a lack of safety oversight within the industry and called for increased protections for whistleblowers. The letter, which calls for a ‘right to warn about [AI]’, is one of the most public statements about the dangers of the technology from employees within the industry. Eleven current and former OpenAI workers signed the letter, along with two current or former Google DeepMind employees. ‘AI companies possess substantial non-public…