Friday, October 26, 2007
The opening session of the Second Annual Securities Fraud Institute provided "trends and expectations in securities fraud enforcement cases and criminal prosecutions" to a near filled large room. Moderator Tom Hanusik asked questions to Professor James Cox (Duke), Alice Fisher (DOJ), Hon. Michael G. Oxley (a father of SOX), and Linda Chatman Thomsen (SEC).
The opening question to Mike Oxley was - is SOX working? The former legislator discussed how SOX was passed in response to the public outcry of corporate scandals, with a purpose to restore investor confidence. He said that the Powers Report gave them the road-map to craft the legislation. And although he was very supportive of the legislation he crafted, he did state that there were "things I would have done differently." He did not elaborate on these items. But later in the program he did state that it is hard to imagine another Enron or Worldcom taking place.
Alice S. Fisher, Assistant Attorney General who heads the Criminal Division of DOJ, was quick to say that SOX is a "great law" and "we love it." She noted the better compliance programs and the real "robust programs" coming after the legislation. In speaking about new tools provided to DOJ, she said that last year it was 313 convictions, but with the new tools it is 672 convictions. She said that new tools "really changed behavior."
Linda Chatman Thomsen, Director of Enforcement at the SEC, also remarked on the new tools provided. She noted that four times they had used the freezing of extraordinary payments prior to an action being brought. She said that this helps in keep employees from pulling money from the company.
Fair Funds, a topic that will also be covered by a later panel in this program, was also discussed by Ms. Thomsen. She said they had collected 9 billion dollars and noted that they were getting better at distributing these funds. Hon. Mike Oxley noted that this provision was not in the House or Senate version, but that it came out of conference.
Professor James Cox, Duke Law School, provided commentary on several points including issues related to globalization.
The most shocking number heard by this blogger came from Alice Fisher who said that the Corporate Fraud Task Force had 23 convictions of corporate counsel.
Many other items were discussed at this opening panel, but it will be interesting to hear what defense counsel has to say about all of this as the program progresses. The ABA site for this program can be found here.
(esp) (w/ disclosure that she is later speaker at this conference)