In a May 27, 2011 post on the FCPA Compliance and
Ethics Blog (here),
Tom Fox has some interesting observations about the ongoing FCPA gun sting
trial. (Readers will recall that this prosecution involves numerous individuals
from the armaments industry who were caught
up in a government sting operation that included extensive
wiretaps and an FBI agent posing as a representative of an African government.)
Among other things, Fox comments that this prosecution is
a "game changer" because of the government's use of "organized crime fighting
techniques in very mundane white collar crime."
Fox's point is a serious one, particularly in view of the
government's use of wiretaps in several other recent high-profile prosecutions.
The insider trading conviction
of Raj Rajaratnam depended critically on extensive government
wiretaps. The prosecution
of the former big law associate who had passed along inside
information gained from the law firms where he worked also relied on use
The government's use of these aggressive crime-fighting
techniques underscores how seriously the government is taking its
responsibility to enforce these laws. The government's willingness to use these
techniques also has important implications for anyone concerned about the
potential exposures for companies and their executives. The most obvious lesson
is that the government is vigilant and will actively pursue criminal activity.
For that reason, corporate compliance efforts are critically important.
Another, perhaps more chilling implication is that
presuming confidentiality for even the most private conversations and
communications could be dangerous. There is probably a larger essay for another
day here. Suffice it to say that the line between necessary vigilance and
intrusive surveillance is a fine one, and the government's involvement in
monitoring its citizen's activities is fraught with difficulties. Some might
say it is only those involved in criminal activities that have any thing to
fear. I note that we only hear about the wiretaps that result in criminal
prosecutions. One can only wonder about the extent of governmental intrusion into
purely lawful communications.
Independent Director Liability Insurance: Do
independent directors need a separate liability insurance policy? The IDL
insurance product has been around for years, though relatively few companies
buy it. The problem is that sometimes when things go wrong, things go
catastrophically wrong. Though IDL continues to attract relatively few buyers,
there are occasions when it could be critically important. A May 26, 2011
article from Corporate Secretary magazine (reprinted here)
takes a closer look at the IDL product. (Full disclosure, I was interviewed for
Take Two: Perhaps there are no
panaceas, but there may be one thing Americans could do to solve many of their
problems -- everything "from stuck zippers to the national debt" -- according
to a recent
report you might have missed.
The American Scene: A
series of recent trips has reminded me that there are a multitude of beautiful
places in this big country. Among other delightful places I have visited are
several that are well work the journey, including Davidson, North Carolina;
Lake Tahoe, California; Denver, Colorado; and Lexington, Virginia.
My most recent sojourn, a Memorial Day weekend trip
to South Carolina for a wedding, introduced me to Greenville, which is yet
another delightful surprise. The cluster of restored buildings and pedestrian
bridges surrounding the waterfalls on the Reedy River and the blocks of shops
and restaurants along the tree-lined Main Street make the town a pleasant and
enjoyable place to explore. Greenville is only one of several U.S. cities that
recently have made big investments in reorienting themselves toward their
riverine setting, including Dubuque, Iowa and Jacksonville, Florida.
Travel has its stresses and headaches, but it also
occasionally affords agreeable discoveries that reward the exertion. Truly, you
could explore this country endlessly and never exhaust its aesthetic
other items of interest from the world of directors & officers liability,
with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.
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