Edwards Angell Palmer & Dodge LLP continues its live blogging from the PLUS D&O Symposium. There were several interesting points discussed during the first panel discussion this morning, including the following:
- FCPA enforcement has increased. With this increased activity, the plaintiffs' bar has been alerted. As a result, it is now common for FCPA actions against individuals and entities to give rise to whistleblower, shareholder derivative, and Rule 10b-5 class action suits.
- Private companies are also exposed to FCPA liability. Accordingly, private company insurance will also be impacted by this increased FCPA activity.
- The SEC has added a new FCPA enforcement unit, and many informal investigations by the SEC have been converted into formal investigations. The DOJ has also stepped up enforcement actions: in 2010, 66 actions were instituted, which is twice as many as were instituted in 2008.
- As a result of these investigations, outside directors may start to insist on getting their own insurance coverage, independent of that purchased for the officers.
- Dodd-Frank expands secondary liability for aiding and abetting and clarifies the SEC's authority to bring "control person" claims.
- The SEC can now also seek civil monetary penalties in administrative proceedings, which are typically more favorable towards the SEC.