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Supreme Court Expands Pool of Claimants in Whistleblower Case 03/07/2014

Posted by Morse, Barnes-Brown Pendleton in Public Companies.
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Corporate Attorney Joseph MarrowBy: Joseph Marrow

On March 4, 2014, the United States Supreme Court issued its decision in a much anticipated whistleblower retaliation case. In its decision, Lawson v. FMR, LLC, No. 12-3, the Supreme Court expanded the coverage of an anti-retaliation claim under Sarbanes-Oxley Act of 2002 (SOX) to an employee of a privately-held contractor (the contractor provided investment management services to Fidelity mutual funds). Pursuant to the Dodd-Frank Act, the Securities and Exchange Commission established an award program for whistleblowers creating a new private right of action for employees in the financial services sector who suffer retaliation for disclosing information about fraudulent or unlawful conduct related to the offering or provision of a consumer financial product or service. The First Circuit had ruled that the anti-retaliation provision only applies to employees of public companies. In a 6 to 3 vote, the Supreme Court reversed the decision of the First Circuit in favor of expanding the coverage of the whistleblower statute to cover employees of a public company’s private contractors and subcontractors.

In Lawson v. FMR, the Supreme Court interpreted a provision of SOX, namely 18 U.S.C. Section 1514A protecting whistleblowers, which provides in part: “No [public] company …, or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of [whistleblowing or other protected activity].” The Supreme Court was faced with the question whether the protected class was simply limited to employees of the public company itself or would include “employees of privately held contractors and subcontractors – for example, investment advisers, law firms, accounting enterprises – who perform work for the public company?” Noting that SOX was enacted following the Enron scandal and in part in response to that scandal, the Supreme Court interpreted the statute as a response to a “concern about contractor conduct of the kind that contributed to Enron’s collapse.” As such, the Supreme Court held that a broader interpretation of the statute (to capture contractors that perform work for public companies) was warranted.

The implications of the Supreme Court’s decision are far reaching. The Supreme Court’s holding significantly expands the pool of potential whistleblower claimants. It remains to be seen whether the parade of horribles predicted by the dissent – resulting in a multitude of spurious claims – will come to fruition.

For more information on this topic please contact Joe Marrow.

JOBS Act: Pathway for Emerging Growth Companies 09/21/2012

Posted by Morse, Barnes-Brown Pendleton in Events, Legal Developments.
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On Tuesday, October 16th Morse, Barnes-Brown & Pendleton, PC and Moody, Famiglietti & Andronico, LLP are holding an informational seminar to discuss the economic basis behind the JOBS Act as well as the specific changes instituted by it. A panel of experts will delve into recent data indicating who is taking advantage of the Act’s provisions and why, and describe the ways in which the new legislation has impacted public filings since its inception.

This seminar will examine the following topic areas:

  • Economic and regulatory drivers that set the stage for the JOBS Act
  • Goals of the JOBS Act in terms of job creation and IPO revitalization
  • Major regulatory changes established by the Act
  • The new concept of the “emerging growth company”
  • Confidential public filing
  • Benefits of going public in today’s market

For more information, directions, or to register, please visit the event page: Exclusive Event – JOBS Act: Pathway for Emerging Growth Companies.

Action Item for Public Companies: Disclosing Cybersecurity Risks 11/14/2011

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Legal Developments, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Levy

The U.S. Securities and Exchange Commission (SEC) recently issued guidance to help public companies assess what, if any, disclosure should be provided regarding cybersecurity risks or incidents. While federal securities laws do not specifically require companies to disclose cybersecurity risks, the SEC’s guidance makes it clear that a number of existing disclosure requirements may impose obligations to disclose cybersecurity matters.

The SEC specifically stated that its guidance and the federal securities laws should not be interpreted to require disclosure that would compromise a company’s cybersecurity efforts.

As an action item, companies should consider whether cybersecurity risks and incidents may affect their risk factor disclosure, MD&A, description of the company’s business and operations, legal proceedings disclosure and financial statements.

Disclosure committees, in their periodic review of the effectiveness of disclosure controls and procedures, will want to consider cybersecurity matters as well.

For more information on this topic, please feel free to contact Daniele Levy.

MassChallenge Awards Therapeutic Systems with $50,000 Gold Prize 11/14/2011

Posted by Morse, Barnes-Brown Pendleton in Client News.
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`On October 24th, MassChallenge held a ceremony to announce the winners of the $1 million 2011 MassChallenge Startup Competition and Accelerator. Three companies were awarded the $100K Diamond Prize and fourteen were awarded the $50K Gold Prize. MBBP client Therapeutic Systems, LLC were selected as one of the $50K Gold Prize winners for the design and development of their product, the Vayu Vest, which is a new and innovative medical device that uses deep pressure to adderss the unique sensory needs of people with autism and related disorders.

Congratulations Therapeutic Systems!

Please visit MassChallenge for more information on the competition.

Securities Regulation and the Use of Social Media by Public Companies 09/10/2009

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, Public Companies.
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Corporate Attorney Joseph MarrowBy Joseph C. Marrow

Public companies today, more than ever, disseminate corporate communications to their constituents (shareholders, customers, prospective investors) by means of a variety of social media platforms (corporate web sites, blogs, Twitter). In so doing, companies should consider whether the disclosure of corporate information runs afoul of the federal securities laws. To guard against federal securities law violations, public companies should implement policies to regulate such disclosures by company representatives.

To read more, click on: SEC’s Regulation FD on Fair Disclosure.

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