Securities Mosaic® Blogwatch
March 15, 2012
Second Circuit Rebuffs Rakoff, Grants Stay to Hear Appeal on Settlement Ruling
by Kevin LaCroix

In a sharply worded March 15, 2012 per curiam opinion (here), a three-judge panel of the Second Circuit granted the motions of Citigroup and the SEC to stay district court proceedings in the SEC's enforcement action against the company, so that the appellate court could consider the merits of the question of whether or not Judge Rakoff had properly rejected the parties' $285 million settlement agreement.

While the Second Circuit did not rule that Judge Rakoff's rejection of the settlement was improper, in concluding that that there was a substantial likelihood the parties would prevail on the merits on that question, the three-judge panel expressly rejected the reasoning on which Judge Rakoff had declined to approve the settlement.

In its enforcement action, the SEC alleged that Citgroup had made misrepresentations in its marketing of collateralized debt obligations. At the same time the SEC filed its complaint, the parties filed a consent judgment for court approval. Among other things, Citigroup agreed to pay $285 million into a fund to be distributed to CDO investors.

In a November 28, 2011 order (about which refer here), Judge Rakoff rejected the proposed settlement, holding that it was not fair, adequate, reasonable, or in the public interest because Citigroup had not admitted or denied the SEC's allegations. Among other things, Judge Rakoff contended that without the admission of liability he was not in a position to assess the settlement. He also characterized the $285 million settlement as "pocket change" for Citigroup. Judge Rakoff put the action on track for trial on the merits. The parties jointly filed motions with the Second Circuit seeking to stay the District Court proceedings and for an interlocutory appeal of Judge Rakoff's rejection of the settlement.

The three judge panel granted the motions to stay and for interlocutory appeal, finding that the parties had carried their burden of showing a substantial likelihood of success on the merits on appeal. In concluding that the parties had carried their burden, the three judge panel considered and rejected each of the three bases on which Judge Rakoff had based his decision to reject the settlement.

First, the three-judge panel rejected Judge Rakoff's conclusion that the settlement without an admission of liability represented bad policy and failed to serve the public interest because defrauded investors could not use the settlement against Citigroup in separate shareholder lawsuits. The three-judge panel said that this reasoning "prejudges the fact that Citigroup had in fact misled investors, and assumes that the SEC would succeed at trial in proving Citigroup's liability."

The three-judge panel was even more concerned that in rejecting the settlement on this basis, Judge Rakoff failed to give deference to the SEC on what the three-judge panel called a "wholly discretionary matter of policy." It is not, the three-judge panel said, "the proper function of federal courts to dictate policy to executive agencies." Nevertheless, the three-judge panel concluded, "the district court imposed what it considered to be the best policy to enforce the securities laws."

The three-judge panel added that it questioned "the district court's apparent view that the public interest is disserved by an agency settlement that does not require the defendant's admission of liability. Requiring such an admission would in most cases undermine any chance of compromise."

Second, the three-judge panel considered and rejected Judge Rakoff's reasoning that he must decline to accept the settlement because it is unfair to Citigroup. The three-judge panel questioned "whether it is a proper part of a court's legitimate concern to protect a private, sophisticated, counseled litigant from a settlement to which it freely consents." The panel added that "we doubt that a court's discretion extend to refusing to allow such a litigant to reach a voluntary settlement in which it gives up things of value without admitting liability."

Third, the three-judge panel rejected Judge Rakoff's reasoning that without an admission he lacked a basis on which to assess the fairness of the settlement. The panel said that this reasoning disregarded the substantial record the SEC had amassed over its investigation. The panel added that "the court was free to assess the available evidence and to ask the parties for guidance as to how the evidence supported the proposed consent judgment."

The panel went on to reject Judge Rakoff's suggestion that without an admission of liability that the settlement was somehow inherently unfair. The pane said that this is "tantamount" to a ruling that without an admission of liability "a court will not approve a settlement that represents a compromise," adding that:

It is commonplace for settlements to include no binding admission of liability. A settlement is by definition a compromise. We know of no precedent that supports the proposition that a settlement will not be found to be fair, adequate, reasonable, or in the public interest unless liability has been conceded or proved... We doubt whether it lies within a court's proper discretion to reject a settlement on the basis that liability has not been conclusively determined.

Having concluded that the parties had established a substantial likelihood of success on the merits, the three-judge panel went on to consider the likelihood of harm to the parties of the stay is not granted. In reaching a conclusion of the likelihood of harm, the panel noted that the "the district court's rejection of the settlement cannot be cured by the parties returning to the bargaining table to make relatively minor adjustments to the terms of the settlement to address the court's concerns," a circumstance that "substantially reduces the possibilities of the parties reaching settlement."

Finally, in concluding that the public interest would be served by granting the stay, the three-judge panel noted the SEC asserts that both the settlement and the stay would serve the public interest, about which the panel said "we are bound in such matters to give deference to an executive agency's assessment of the public interest." This does not mean, the panel said, that a court "must necessarily rubber stamp" an agency's positions, but it does mean that "a court should not reject the agency's assessment without substantial reason." The panel added that "we have no reason to doubt the SEC's representation that the settlement it reached is in the public interest."

The three judge panel did note the rather anomalous circumstance that because Citigroup and SEC had both filed motions to stay and for interlocutory appeal, the adversarial position had not been presented. In order to ensure that the adversarial position would be represented on appeal, the three-judge panel directed the Court's clerk to appoint counsel for the consideration of the merits.


The three-judge panel was careful to note that it did not rule on the question of whether or not Judge Rakoff had improperly rejected the settlement. It noted that its reasoning was not preclusive on the merits panel. It is in fact possible, at least as a theoretical matter, that on further proceedings and with skilled counsel engaged to argue the "adversarial position," that a different panel might reach a different conclusion about Judge Rakoff's rejection of the settlement.

The strong likelihood is that the merits panel will reach the same conclusion as the three-judge panel. The conclusion in the panel's opinion that Judge Rakoff had failed to allow appropriate deference to the SEC (by contrast to the panel's own exceptional deference to the agency) seems likely to be taken up by the merits panel. In addition, that there is "no precedent" for the conclusion that a court should reject a settlement because it lacked an admission of liability also seems to suggest the likeliest path that the merits panel would take.

Finally, and more importantly, there is a pervasive sense throughout the three judge panel's opinion that if parties can't settle without requiring an admission of liability, then parties are unlikely to try to compromise. This practical and common sense observation suggests that the three judge panel saw nothing wrong at any level with a settlement in which there has been no admission of liability. This reasoning may prove to be the most important to the merits panel.

Judge Rakoff's opinion was emotional, reflected a high moral tone, and bespoke a theoretical consideration of the issues. The three-judge panel's opinion more practical than theoretical, and reflected a more restrained and deferential conception of the appropriate role of the court in these circumstances. The difference behind these two approaches may be explained by the fact that Judge Rakoff may, as the three-judge panel observed, have "prejudged" the fact that Citigroup had misled investors.

The ultimate outcome of this appeal remains to be seen. However, if the three-judge panel's view of this case prevails, the demise of the "neither admit nor deny' settlement will be avoided. Some commentators might decry this outcome, but many of the outrage voiced by many of these observers will be based on their own presumption that Citigroup had acted improperly. While compromises of disputed claims may be less emotionally satisfying than a determination of fault, the practical reality is that the system might well grind to a halt if parties cannot compromise. Perhaps the most valuable observation of the three-judge panel is that if parties are not free to reach settlements without an admission of liability, then parties will be unlikely to compromise, an outcome that would impose enormous costs on litigants and burdens on courts.

Allison Frankel has a good analysis of the three-judge panel's opinion on Thomson Reuters News & Insight (here)

Many thanks to the several loyal readers who sent me copies of the three-judge panel's opinion.

March 15, 2012
Delaware Court Considers Conflicts of Interest in M&A
by Eduardo Gallardo

Editor's Note: Eduardo Gallardo is a partner focusing on mergers and acquisitions at Gibson, Dunn & Crutcher LLP. This post is based on a Gibson Dunn Client Alert by Mr. Gallardo and Stephenie Gosnell Handler. This post is part of the Delaware law series, which is cosponsored by the Forum and Corporation Services Company; links to other posts in the series are available here.

On February 29, 2012, Chancellor Strine of the Delaware Court of Chancery issued an opinion that is highly critical of the sale process run by El Paso Corporation in connection with its $21.1 billion acquisition by Kinder Morgan, Inc. See In re El Paso Corporation Shareholder Litigation, No. 6949-CS (Delaware Court of Chancery). The Court focuses on various alleged conflicts of interest involving El Paso's CEO and its financial advisor, which persuaded the Court that the plaintiffs have a reasonable probability of success on a claim that the merger was tainted by breaches of fiduciary duty. But despite the "disturbing nature of some of the behavior," the Court concluded that the balance of hardships did not support a preliminary injunction because the "stockholders should not be deprived of the chance to decide for themselves about the Merger."

As set forth in the Court's opinion, the CEO of El Paso undertook sole responsibility for negotiating the sale of the company, and failed to disclose to the Board of Directors his interest in working with other El Paso managers in making a bid to buy El Paso's exploration and production business from Kinder Morgan following completion of the merger. In the Court's view, this conflict was compounded by the fact that El Paso relied in part on advice given by its longtime financial advisor, which owned 19% of Kinder Morgan (a $4 billion investment) and controlled two Kinder Morgan board seats. On top of this, the lead banker to El Paso personally owned approximately $340,000 of Kinder Morgan stock, which remained undisclosed throughout negotiations.

The Court's opinion underscores a number of important points M&A practitioners should be mindful of in connection with a sale process:

  • A CEO should not be the sole negotiator in the sale process, particularly under circumstances where a potential conflict of interest exists or could arise, such that the CEO's incentives to maximize price for stockholders could be questioned. Furthermore, any such potential conflict of interest should be promptly reported to the full Board. We note, however, that the Court appears to signal that even had that disclosure occurred prior to signing a deal, the CEO's potential conflict would have still tainted his ability to negotiate on behalf of stockholders.
  • The Delaware Court will take a very skeptical view of any efforts by a financial advisor with a significant conflict of interest to cleanse such conflict in a manner that that does not involve its substantial recusal from a continuing M&A advisory role. It is noteworthy that, except for the $340,000 of Kinder Morgan stock owned by the El Paso lead banker, the Court admits that all relevant potential conflicts involving El Paso's financial advisor and its interest in Kinder Morgan had been disclosed. Notwithstanding such disclosure, the Court questions the decision of allowing the conflicted financial advisor to continue to provide advice to the Board regarding the potential sale to Kinder Morgan, and appears to view any advice given by the advisor in support of the decision to sell to Kinder Morgan as tainted by the conflict.
  • Bringing in a second financial advisor will not be adequate to resolve conflicts of interest if an incentive structure is created such that the new advisor's fee is linked to a successful deal that is in the interest of the original advisor. In El Paso, the Court was critical of the fact that the second financial advisor retained by the Board would only receive a fee if El Paso adopted the strategic option of selling to Kinder Morgan, and would not receive any fee if a spin-off transaction that was then contemplated by the company was completed Advisors will have to consider the Court's view in light of the common business preference of a target board to pay a substantial M&A advisory fee only if a sale transaction is actually completed.
  • The Court criticizes the lack of more aggressive negotiating tactics on the part of El Paso, particularly when Kinder Morgan reduced its initial private bid. The Court implies that a suspension of discussions or calling the buyer's bluff to launch a hostile bid might have been better alternatives than continuing discussions at the revised price level. Sellers and their advisors will have to continue balancing the Court's preference for a record showing aggressive negotiations, and the business realities and dynamics of the particular transaction.

It is noteworthy that the Court's decision not to issue a preliminary injunction in light of the potentially serious conflicts of interest and the questionable decisions made by the Board conflicts with the decision in In re Del Monte Foods Company Shareholders Litigation. In that case, Vice Chancellor Laster issued a preliminary injunction enjoining a stockholder vote on the proposed merger for a period of 20 days, and further enjoined the enforcement of specific deal protection measures pending the vote, in light of alleged improper actions on the part of the company's financial advisor. In El Paso, the Chancellor clearly expresses his view that it is not appropriate for the Court to interfere with stockholders' right to vote for or against a transaction, absent a credible rival bid. The Chancellor also notes that the Court should not use its authority to reform a merger contract negotiated by sophisticated parties, including no-shops and termination rights, without an evidentiary hearing or undisputed facts.

Chancellor Strine's opinion highlights the continuing heightened level of skepticism that the Court will display towards the actions of fiduciaries and advisors that may appear to be tainted by potential conflicts of interest. But the opinion also serves as a strong statement from the Chancellor of the proper role of the Court in merger situations where no rival bid has emerged and stockholders can exercise their informed vote to accept or decline a merger proposal.

March 15, 2012
Carpenters File Revised Auditor Independence Proposals
by Nafeez Amin, Taft-Hartley Research

The United Brotherhood of Carpenters and Joiners union has crafted a revised shareholder proposal that seeks an annual report on auditor independence. This proposal has been submitted at 14 companies; engagement is ongoing with several of these firms, although Dell has filed a no-action petition with the SEC earlier this month.

This new auditor independence resolution is a departure from the auditor rotation proposals submitted by the Carpenters late last year. In the previous version, the labor pension fund sought mandatory auditor rotation at least every seven years in an effort to increase objectivity and to "limit long-term client-audit firm relationships that may compromise the independence of the audit firm's work." Further, the resolution asked boards to implement a three-year cooling-off period before the auditor could be reengaged.

The staff of the SEC's Corporation Finance Division granted no-action requests by Walt Disney Co., Deere & Co., and various other firms where the original auditor rotation proposal was filed. The SEC staff has refused to reconsider its rulings that auditor rotation policies are part of a company's "ordinary business" operations. Dell also makes an ordinary business argument in its March 2 request to exclude the revised Carpenters proposal.

Given the SEC's views on the original resolution, the Carpenters have retooled and, in many ways, softened their proposal. The revised resolution seeks increased disclosure with regard to the auditor-client relationship as opposed to the more prescriptive request of mandatory rotation.

The revised proposal requests that the firm's audit committee prepare an independence report that includes the following: (1) information concerning the tenure of the company's audit firm as well as the aggregate fees paid over the period of its engagement; (2) information as to whether the audit committee has a policy or practice of periodically considering audit firm rotation or seeking competitive bids from other public accounting firms; (3) information regarding the mandated practice of lead audit partner rotation; (4) information as to whether the board's audit committee assesses risk with regard to auditor tenure; (5) information regarding any training programs for audit committee members relating to auditor independence, objectivity, and professional skepticism, and (6) information regarding additional policies or practices, other than those mandated by law and previously disclosed, that have been adopted by the board's audit committee to protect the independence of the company's audit firm.

March 15, 2012
Second Circuit Grants Stay in SEC v. Citigroup
by Barbara Black

The Second Circuit issued a per curiam opinion today in SEC v. Citigroup Global Markets. Technically the court granted the SEC's and Citigroup's request for a stay of the district court proceedings, refused to expedite the appeal and directed appointment of counsel to represent the "other side" of this appeal (since both parties want to reverse the district court's order). Untechnically, the SEC and Citigroup won, and Judge Rakoff lost.

The court's views on the merits are made clear in its discussion of why the parties have a strong likelihood of success on the merits. The court noted a number of problems with Judge Rakoff's determination that a consent judgment without Citigroup's admission of liability is bad policy, including:

The district court prejudges that Citigroup had misled investors and assumes the SEC would prevail at trial;

In addition, (and most important) the district court did not appear to give deference to the SEC's judgment on wholly discretionary matters of policy. The scope of the district court's authority to second-guess an agency's discretionary and policy-based decision to settle is "at best minimal."

The Second Circuit did take care to emphasize that its discussion of the merits was solely for the purpose of establishing that the parties have a "strong likelihood" of success on the merits and that the "other side" was not represented.

We recognize that, because both parties to the litigation are united in seeking the stay and opposing the district court's order, this panel has not had the benefit of adversarial briefing. In order to ensure that the panel which determines the merits receives briefing on both sides, counsel will be appointed to argue in support of the district court's position.
The merits panel is, of course, free to resolve all issues without preclusive effect from this ruling. In addition to the fact that our ruling is made without benefit of briefing in support of the district court's position, our ruling, to the extent it addresses the merits, finds only that the movant has shown a likelihood of success and does not address the ultimate question to be resolved by the merits panel - whether the district court's order should in fact be overturned.

Nevertheless, unless this panel is an outlier, the opinion is a good prediction of the merits determination.

SEC v. Citigroup Global Markets (2d Cir. Mar. 15, 2012)(Download SECvCitigroup.2dCir)

March 15, 2012
If It Looks Like a Duck, err, a SARE Debtor...
by Krystyna Blakeslee

Recently, the Ninth Circuit Court of Appeals brought smiles to the faces of many lenders (especially Bank of America, the appellee and secured lender) when it refused to combine the assets of related debtors without a substantive consolidation order and held that a single asset real estate debtor will be treated as a single asset real estate debtor.

Let's take a little detour - some background information may be necessary. In 1994, the Bankruptcy Code (Sec. 362(d)(3)) was amended to include provisions relating to the "single asset real estate" ("SARE") debtor. A SARE debtor (Sec. 101(51B)) is a debtor that owns a single property (commercial or residential with 4 or more units) which generates substantially all of the gross income of the debtor, is not a farmer and is not engaged in any other business (other than owning and operating that property). These provisions are fondly (at least in some circles) referred to as the "SARE Provisions." The SARE Provisions require a debtor to propose a confirmable plan or commence making payments equal to the contract rate of interest (as opposed to default interest) due on the loan within a short time frame (90 days after entry of an order for relief or 30 days after the court determines that the SARE Provisions apply). If a SARE debtor fails to comply, a creditor (well, any creditor whose claim is secured by the property) may obtain relief from the stay and commence foreclosure. The effect of the SARE Provisions has been to shorten the life of a case and the economic burden placed on creditors whose claims are secured by a SARE debtor's property.

Now, back to the Ninth Circuit. The Ninth Circuit case discussed here and alluded to above involved Meruelo Maddux Properties, Inc. ("MMPI"), the parent company of more than fifty subsidiaries, all of which filed for bankruptcy in 2009. MMPI's business was operated on a consolidated basis - cash was swept into a general operating account that was also used to pay the expenses of all of the entities (MMPI and all of its 50+ subs). MMPI and its subs filed consolidated financial reports with the SEC and filed consolidated tax returns with the IRS. The subsidiary at issue, Meruelo Maddux Properties - 760 S. Hill Street LLC ("MMP HILL"), owned a swanky 92-unit Los Angeles apartment complex commonly known as the Union Lofts.

The cases of MMPI and MMP Hill were jointly administered but not substantively consolidated. This is a distinction with an important difference having legal consequences for all parties involved. Substantive consolidation allows a Bankruptcy Court to pierce the corporate veil of related debtors and use the assets of one debtor to satisfy the debts of another (see footnote 1 of the decision). Joint administration is merely a procedural way of dealing with a case aimed at streamlining the process to make the case administration easier for all parties involved.

I digress... The Bankruptcy Court found that the SARE Provisions would not apply to MMP Hill due to "the consolidated interrelated nature of the business operations of MMPI and its subsidiaries" (even though MMP Hill was a separate and distinct entity and the cases of MMP Hill and its parent corporation and sister subsidiaries were not substantively consolidated). On appeal, the Ninth Circuit overturned the decision of the Bankruptcy Court (affirming the District Court), and held that since MMP Hill qualifies under the SARE Provisions, "absent a substantive consolidation order, we must accept MMP Hill's chosen legal status as a separate and distinct entity from its parent corporation and sister subsidiaries, and look only to its assets, income and operations in determining whether it is a single asset real estate debtor." In short, absent substantive consolidation, the Ninth Circuit Court of Appeals refused to ignore MMP Hill's existence as a separate legal and distinct entity from its parent and sister subs and found that what looks like a SARE debtor, acts like a SARE debtor and smells like a SARE debtor IS a SARE debtor.

This is great news (at least if you are in the Ninth Circuit)! This case has made it clear that when entities are treated separately and distinctly a court will not (should not is probably more accurate) disregard that status without a court order (which means without a hearing and findings of fact and time to object). The Ninth Circuit has confirmed the belief that the bankruptcy of an SPE's affiliates will not per se result in substantive consolidation. Importantly, the Ninth Circuit has confirmed that single asset real estate debtors will be treated as contemplated by the Bankruptcy Code (even the most debtor-friendly judge may find this difficult to get around). Lenders are given some comfort that if the debtor is a SARE debtor, one way or another (i.e., plan confirmation, payment of contract interest or relief from stay) the lender will be afforded some relief.

So what does this mean going forward? In addition to just giving lenders some extra comfort, it means that lenders should ensure that their borrowers are not receiving funds from their parents or sister subs in exchange for labor or services or as a profit from investments. Some extra reps to that affect are worthwhile.

The Bankruptcy Court's order telegraphed that substantive consolidation may be a way to circumvent the SARE provisions. If this is so, we may see more debtors trying to have their cases substantively consolidated. Their success, however, is doubtful, since debtors will have to set the stage (e.g., commingling funds, sharing labor and services... in other words, lots of things that will cause a default under most loan documents) for substantive consolidation way ahead of the bankruptcy petition date.

The Ninth Circuit's straightforward reading of the Bankruptcy Code is an affirmation of a common deal structure for commercial loans, but we will still keep an eye on the rest of the circuits to see how other courts come down on this issue. In the meantime, lenders may consider adding some extra reps and can continue with business as usual.

By: Linda Ann Bartosch and Krystyna Blakeslee

March 15, 2012
The SEC Mandamuses Rakoff
by David Zaring

It isn't that surprising that the Second Circuit reversed Judge Rakoff for rejecting the SEC's settlement with Citigroup. After all, Rakoff did, by requiring an admission of wrongdoing by Citigroup, "virtually preclude[] the possibility of settlement," as the appellate court observed, and we don't live in a country where parties are not allowed to settle their lawsuits. Moreover, by requiring a trial or an admission of guilt, the court was delving deep into should-we-prosecute questions that courts have always deferred totally to agencies on. As the Second Circuit put it, "it is not ... the proper function of courts to dictate policy to executive agencies" in this way.

What is surprising is that the SEC took a rare mandamus, interlocutory appeal over the issue. Those are hard to win, just inherently, and for an agency that sighed and gave up when its proxy rule was reversed by the D.C. Circuit, taking an emergency flyer on the Second Circuit halfway through the Citigroup case was a little bold.

There is still time for the appellate court to vindicate Rakoff, by the way, though I don't think it is likely. This was a preliminary ruling that forced him to stop making the parties prepare for a trial while the appellate court ponders a definitive decision on the mandamus appeal.

March 15, 2012
The Apple E-Book Kerfuffle Meets Alfred Marshall's Principles of Economics
by Josh Wright

From a pure antitrust perspective, the real story behind the DOJ's Apple e-book investigation is the Division's deep commitment to the view that Most-Favored-Nation (MFN) clauses are anticompetitive (see also here), no doubt spurred on at least in part by Chief Economist Fiona Scott-Morton's interesting work on the topic.

Of course, there are other important stories here (see Matt Yglesias' excellent post), like "how much should a digital book cost?" And as Yglesias writes, whether "the Justice Department's notion that we should fear a book publishers' cartel is borderline absurd, on par with worrying about price-fixing in the horse-and-buggy market."

I can't help but notice another angle here. For those not familiar, the current dispute over e-books emerges over a shift in business models from a traditional one in which publishers sold at wholesale prices to bookstores who would, in turn, set the prices they desired- sometimes below the book's cover price- and sell to consumers at retail. Much of the dispute arises out of the incentive conflict between publishers and retailers with respect to the profit-maximizing price. The WSJ describes the recent iteration of the conflict:

To build its early lead in e-books, Amazon Inc. AMZN +0.19% sold many new best sellers at $9.99 to encourage consumers to buy its Kindle electronic readers. But publishers deeply disliked the strategy, fearing consumers would grow accustomed to inexpensive e-books and limit publishers' ability to sell pricier titles.

Apple's proposed solution was a move to what is described as an "agency model," in which Apple takes a 30% share of the revenues and the publisher sets the price- readers may recognize that this essentially amounts to resale price maintenance- an oft-discussed topic at TOTM. The move to the agency-RPM model also entailed the introduction of an MFN clause stipulating that publishers could not sell to rivals at a lower price.

Whether Apple facilitated a collusive agreement among publishers or whether this industry-wide move to the agency-model is an efficient and consumer-welfare enhancing method of solving the incentive conflict between publishers and retailers remains to be seen. What is somewhat new in this dispute about book distribution is the technology involved; but the underlying economics of vertical incentive conflict between publishers and retailers is not!

Many economists are aware Alfred Marshall's Principles of Economics textbook was apparently the first commodity sold in the United States under an RPM agreement! (HT: William Breit) The practice apparently has deeper roots in Germany. The RPM experiment was thought up by (later to become Sir) Frederick Macmillan. Perhaps this will sound familiar:

In 1890 Frederick Macmillan of the Macmillan Company was casting about for a book with which to conduct an experiment in resale price maintenance. For years it had been the practice in Great Britain for the booksellers to give their customers discounts off the list prices; i.e. price cutting had become the general practice. In March, 1890, Mr. Macmilan had written to The Bookseller suggesting a change from the current discount system and had inserted a form to be filled out by the dealers.

Experimentation with business models to align the incentives of publishers and sellers is nothing new; it is only wonderful coincidence that the examples involve a seminal economics text published as the Sherman Act was enacted. Nonetheless, an interesting historical parallel and one that suggests caution in interpreting the relevant facts without understanding the pervasive nature of incentive conflicts within this particular product line between publishers and sellers. One does not want to discourage experimentation with business models aimed at solving those incentive conflicts. What remains to be seen is whether and why the move to the new arrangement was executed through express coordination rather than unilateral action.

March 16, 2012
This Week In Securities Litigation (Week ending March 16, 2012)
by Tom Gorman

The Commission won a significant victory this week in the Second Circuit Court of Appeals in its Citigroup litigation. While technically the Court only granted a stay of the proceedings in the district court, the panel's evaluation of the probability of success on the merits and the overall tone of the opinion clearly reflected the SEC's position that the District Court overstepped its limited role in the settlement process.

The SEC also brought its first cases arising out of its year long investigation into the pre-IPO market and another market crisis case. The DOJ continued to focus on FCPA enforcement, resolving another inquiry with a deferred prosecution agreement. The CFTC stepped up enforcement, filing a settled action against a Goldman Sachs unit while the FSA announced the resolution of a significant market crisis case.

Finally, Cornerstone Research released its report on securities class actions. It shows a significant drop in settlements last year but suggests that there may be an increase in the future of class actions with a parallel SEC enforcement component.

The Commission

Speech: Chairman Mary Schapiro addressed the Society of American Business Editors and Writers Annual Convention, Indianapolis, Indiana (March 15, 2012). The Chairman's comments included remarks on SEC reform, the state of Dodd-Frank rules, a critique of pending legislation regarding the wall between analysts and underwriters, initiatives regarding money market funds, the status of rules on derivatives and the flash crash (here).

Speech: Meredith Cross, Director, Division of Corporate Finance, addressed the Eleventh Annual Institute on Securities Regulation in Europe, London, England (March 8, 2012). The topics include rule making under Dodd-Frank, capital formation initiatives, the regulation of disclosure by foreign private issuers and the disclosure review program (here).

Securities class actions

Last year the number of court approved settlements in securities class actions dropped to 65, down by about 25% from 2010 and about 35% below the average over the prior 10 years. The total value of the settlements declined by 58% to $1.4 billion in 2011 from $3.2 billion in 2010, according to a report by Cornerstone Research. The average settlement in 2011 of $21 million was also far below the average for 2010 which was $55.2 million. The decline in value is due in part to the fact that there was no single settlement exceeding $1 billion, the Report notes.

Cases that involve SEC actions typically have significantly higher settlements, according to Cornerstone. Last year, however, the percentage of settled cases that involved the remedy of a corresponding SEC action prior to the settlement of the class case were less than 10% compared to 30% in the prior year. This decline occurred despite reports by the SEC that it filed a record number of enforcement actions in the last fiscal year. Accordingly, Cornerstone notes that "we would expect the percentage of class action settlement with corresponding SEC actions to increase in the next few years as these cases are resolved."

The Citigroup appeal

The Second Circuit Court of Appeals granted the SEC's request for a stay of its enforcement action against Citigroup Global Markets Inc. and held that it properly had jurisdiction of the matter. SEC v. Citigroup Global Markets, Inc., Docket Nos. 11-5227-cv (Decided March 15, 2012). The action stems from the refusal of the district court to execute a proposed settlement of the Commission's market crisis enforcement action against Citigroup (here). Following that determination, the district court directed that the action proceed to trial. The SEC filed a direct appeal and, as an alternative measure, a writ of mandamus. In the Second Circuit the Commission, joined by Citi, requested a stay of the underlying enforcement action pending appeal.

The motion panel concluded that the Court has jurisdiction. While it expressed some doubt regarding the merits of a direct appeal, the Court concluded that it has jurisdiction under the writ.

In evaluating the traditional multi-prong test for granting a stay, the Court began by noting that the appeal raises important questions regarding the role of the district court and an administrative agency in the settlement process. Central to the ruling is the panel's conclusion that the SEC has a likelihood of success on the merits. In evaluating this prong of the stay test the Court noted that an agency such as the SEC is entitled to deference in evaluating the public interest and a settlement. Despite the fact that the district court stated it gave the agency deference, in fact it appears that it did not. Indeed, the panel appeared to view the district court's ruling as little more than impermissible second guessing of the agency. Accordingly, the panel concluded that there was a probability of success on the merits. In reaching this conclusion the Court made it clear that while the district court has a role in the settlement process, it is limited and not of the scope taken by the district court here.

The Court cautioned that its decision was being made without having the benefit of briefing from an opposing side and that it is not binding on the merits panel. The panel also directed that counsel be appointed to represent the other side for briefing on the merits. The Court rejected a request to expedite the appeal.

SEC Enforcement: Filings and settlements

Filings: The Commission filed seven (7) civil injunctive actions and three (3) administrative proceedings (excluding tag-a-long cases and Section 12(j) actions) this week.

Insider trading: SEC v. Mityas, Civil Action No. 12-Civ-1281 (E.D.N.Y. Filed March 15, 2012) is an action against Sherif Mityas, a partner and vice- president at a consulting firm. Mr. Mityas' firm was retained by the Carlyle Group in connection with a proposed acquisition of NBTY Inc. Shortly after learning the identity of the target Mr. Mityas purchased shares of NBTY. He also tipped as relative who traded. Following the announcement of the deal on July 15, 2010, Mr. Mityas liquidated his shares at a profit of $25,895. The relative held the shares through the completion of the merger and had a profit of $12,035. Mr. Mityas settled the action consenting, without admitting or denying the allegations in the complaint, to the entry of a permanent injunction prohibiting future violations of Exchange Act Section 10(b). He also agreed to pay disgorgement of his profits and those of his relative in the amount of $37,931 along with prejudgment interest and a penalty equal to the amount of the disgorgement. Mr. Mityas also pleaded guilty to criminal securities fraud charges based on these transactions.

Investment adviser fraud: SEC v. Murray, Case No. CV 12 1288 (N.D. Cal. Filed March 15, 2012) is an action against James Murray, an investment adviser of Market Neutral Trading, LLC. Defendant Murray is alleged to have started raising funds from investors in 2008. The next year he distributed an audit report to investors on the performance of the fund from Jones, Moore & Associates, Ltd. That report was false, according to the complaint. In fact, the firm is not an accounting firm but rather a shell company controlled by Mr. Murray. The audit report overstated the fund's investment gains by about 90% and its income by about 35%. The complaint alleges violations of Adviser Act Section 206(4). The case is in litigation. A parallel criminal case has been filed.

Pre-IPO market: SEC v. Mazzola, CV-12-1258 (N.D. Ca. Filed March 14, 2012) is an action against Frank Mazzola, a registered representative who is the principal and owner of defendant Felix Investments, LLC, a registered New York City broker, and Facie Libre Management Associates, LLC, an investment adviser for two pooled investment vehicles. The two funds invested primarily in the shares of Facebook. The complaint alleges that shares were sold in the two funds based on a series of misrepresentations including: Failing to state that Facebook blocked share transfers to Facie Libre for about one year; failed to disclose the full compensation earned by Mr. Mozzola; assertions that Face Libre was about to get more Facebooks shares without having any reasonable basis; and a claim that the funds were "Facebook approved" so they were more likely to obtain additional shares when in fact they were not. Defendant Mazzola is also alleged to have made misrepresentations in connection with the sale of shares in funds for Zynga and Twitter. The complaint alleges violations of Exchange Act Section 10(b), Securities Act Section 17(a) and Advisers Act Section 206(4). The case is in litigation.

Pre-IPO market: In the Matter of Laurence Albukerk, Adm. Proc. File No. 3-14801 (Filed March 14, 2012). This settled proceeding names as Respondents registered representative Laurence Albukerk and his company, EB Financial Group, LLC, investment adviser to funds holding Facebook shares. The action alleges that Respondents failed to properly disclose the fees they earned in connection with the sale of the shares. The matter was settled with Respondents consenting to the entry of a cease and desist order based on Securities Act Section 17(a)(2) and Advisers Act Section 206(4) in addition to paying disgorgement and prejudgment interest of $210,499 and a penalty of $100,000).

Pre-IPO Market: In the Matter of Sharespost, Inc., Adm. Proc. File No. 3-14800 (Filed March 14, 2012) is a proceeding which names as Respondents the company and its founder and president Greg Brogger. The Order alleges that Respondents facilitated the sale of pre-IPO shares without registering as a broker dealer. The action was resolved with Respondents consenting to the entry of a cease and desist order based on Exchange Act Section 15(a) and the company agreeing to pay a penalty of $80,000 while Mr. Brogger paid $20,000.

Insider trading: SEC v. McGee, Civil Action No. 12-cv-1296 (E.D. Pa. Filed March 14, 2012) is an action against two registered representatives, Timothy McGee and Michael Zirinsky, and three others, Robert Zirinsky, Paulo Lam and Marianne sze wan Ho. The complaint centers on the acquisition of Philadelphia Consolidated Holding Corporation, a Pennsylvania based insurance holding company, by Tokio Marine Holdings, Inc., announced on July 23, 2008. Mr. McGee, a financial advisor with Ameriprise Financial Services, learned about the transaction from a senior executive of the company with whom he had a long term, close relationship, stemming from their association at Alcoholics Anonymous. Mr. McGee traded and tipped his co-worker and friend Michael Zirinsky who also traded. Mr. Zirinsky in turn tipped his father, Robert Zirinsky and his friend, Paulo Lam, a resident of Hong Kong. Mr. Lam then tipped his business partner and the husband of defendant Ho, both residents of Hong Kong. Defendants Robert Zirinsky, Lam and Ho each purchased shares of Philly. Defendant Michael Zirinsky purchased shares for his account as well as in those of his wife, sister, mother and grandmother for which he was the account executive. Each defendant profited: Mr. McGee- $292,128; the Zirinsky family- $562,673; Mr. Lam- $837,975; and Ms. Ho- $110,580. Defendants Lam and Ho settled, consenting to the entry of final judgments prohibiting future violations of Exchange Act Section 10(b) without admitting or denying the allegations in the complaint. Mr. Lam agreed to pay disgorgement of $837,975 along with prejudgment interest and a penalty of $251,392. Ms. Ho agreed to disgorge $110,580 along with prejudgment interest and to pay a penalty of $16,587. The other defendants are litigating the case.

Market crisis: SEC v. Goldstone, Case No. 12-257 (D.N.M. Filed March 13, 2012) is an action against Larry Goldstone, the former CEO and president of Thornburg Mortgage, Inc., Clarence Simmons, its former CFO and senior executive v.p. and Jane Starrett, former chief accounting officer. Thornburg was the second largest independent residential mortgage company behind Countrywide. Shortly before the filing of the 2007 Form 10-K on February 28, 2008, the institution was suffering from a liquidity crisis. In the fourth quarter of 2007 the company had about $360 million in margin calls from securities collateralizing its repurchase agreements. As the company prepared to file its 2007 10-K its financial condition continued to plummet. Adjustable rate mortgage or ARM securities it held dropped in value. The company faced $300 million more in margin calls. Paying late meant that Thornburg violated its lending agreements with at least three lenders. If the firm was declared in default its financial condition would sink further. That default would trigger another default under the cross-default clauses with its other lenders which would lead to the seizure of its ARM securities that were the collateral for its loans. The defendants chose not to inform the auditors or disclose these items in its Form 10-K. Within hours of that filing the company got more margin calls. Within days it was forced to restate its financial statements to reflect a write down of its securities, the impact of the margin calls and reverse a fourth quarter profit to a loss. Eventually Thornburg filed for bankruptcy. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Sections 10(b), 13(a), 13(b)(2)(A, 13(b)(2)(B) and 13(b)(5) as well as control person liability under section 20(a). The case is in litigation.

Offering fraud: SEC v. United American Ventures, LLC, Civil Action No. 1:10-cv-00568 (D. N.M. Filed June 14, 2010) is an action against the company, Philip Thomas, Eric Hollowell, Mathew Dies, Integra Investment Group, LLC and Anthony Olivia. The complaint alleged that false statements were utilized to induce about 100 persons to invest about $10 million in a program involving convertible bonds. The complaint alleges violations of Securities Act Sections 5 and 17(a) and Exchange Act Sections 10( b) and 15(a)(1). Each defendant consented to the entry of an injunction based on the sections cited in the complaint. Issues regarding disgorgement and penalties were reserved to the court. In an order dated March 2, 2012 the court held Defendants Hollowell, Thomas and United American Ventures jointly and severally liable for disgorgement in the amount of $8,652, 942 along with prejudgment interest and individually liable for a civil penalty of $1 million. Defendants Oliva and Integra were held jointly and severally liable for disgorgement of $294,039 along with prejudgment interest while Defendant Oliva was directed to pay a civil penalty of $130,000. Defendant Dies was ordered to pay disgorgement of $54,381 along with prejudgment interest and a civil penalty of $54,382. A default judgment was entered against All American Capital for disgorgement in the amount of $592,529.

Investment fund fraud: In the Matter of Armando Ruiz, Adm. Proc. File No. 3-14388 (March 12, 2012) is an action against Mr. Ruiz, a registered representative, and his controlled entity, Maradon Holdings, LLC. From April 2008 through May 2009 Mr. Ruiz raised about $705,000 from eight equity investors and $112,500 from a ninth investor who loaned funds to Maradon. The company was represented to have been formed to develop in to a financial services firm serving the Hispanic community. In fact none of the shares were issued and much of the offering proceeds were used by Mr. Ruiz for personal expenses. Six of the nine investors were repaid about $180,000. To settle the proceeding the Respondents consented to the entry of a cease and desist order based on Securities Act Section 17(a)(2). In addition, Mr. Ruiz is barred from the securities business with a right to reapply after three years. He also agreed to pay disgorgement of $112,500 along with prejudgment interest and to pay a civil penalty of $75,000. The amount of the disgorgement equals the investment made by an investor who put in $112,500 as a loan which was purportedly converted to equity.

Offering fraud: SEC v. Ellis, Civil Action No. 12-cv-1203 (E.D. Pa. Filed March 8, 2012) is an action against Edward Ellis, Sr. and Jennifer Seidel, alleging that the two defrauded investors in connection with the purchase of shares in their company, Sederon, Inc. From August 2007 through October 2008 stock was sold to about 54 investors. The company raised approximately $519,500. In selling the shares the defendants made a series of misrepresentations, according to the complaint, including: Claims that Sederon was highly profitable; statements that the business was rapidly expanding; a claim that an IPO would be forth coming; a representation that IPO investors would be able to sell their shares in the open market at profits from 900 to 1,300 percent; and a claim that the shares were limited or then available at a "special discount." The defendants also failed to disclose the fact that Mr. Ellis had previously spent time in prison in connection with a guilty plea to charges based on a fraudulent securities offering, that he had been enjoined by the SEC and ordered to cease and desist by state securities regulators. The Commission's complaint alleges violations of Securities Act Sections 5 and 17(a) and Exchange Act Section 10(b). The case is in litigation.


U.S. v. Bizjet International Sales and Support, Inc., Case No. 12 cr 61 (N.D. Okla. Filed March 14, 2012) is a case in which the company was charged in a one count criminal information. It charged the company with conspiracy to violate the FCPA anti-bribery provisions. Bizjet is an indirect subsidiary of Lufthansa Technik AG, a German provider of aircraft related services. The company, according to the court documents, paid bribes to officials employed by the Mexican Policia Federal Preventiva, the Mexican Coordination General de Transportes Aereos Presidenciales, the air fleet for the Gobierno del Estado de Sinaloa, the air fleet for the Goblerno del Estado de Sonora and the Republica de Panama Autoridad Aeronautica Civil. In some instances the bribes were paid directly. In others they were paid through a shell company owned by a company official. Bizjet resolved the matter by entering into a deferred prosecution agreement. As part of the agreement the company will pay an $11.8 million criminal fine which is about a 30% reduction from the bottom of the guideline fine range. The company also agreed to implement a compliance and ethics program and report to the DOJ at no less than twelve month intervals during the three year term of the agreement. The agreement reflects the cooperation of the company. The DOJ also entered into an agreement with Lufthansa Technik under which the firm will not be prosecuted as long as it complies with its undertakings which are to continue cooperating and implementing rigorous procedures over three years.

U.S. v. Duperval (S.D. Fla.) is an FCPA related action against Jean Duperval, the former director of international relations for Telecommnications D'Haiti S.A.M. or Haiti Teleco. Following a jury trial Mr. Duperval was convicted on two counts of conspiracy to commit money laundering and 19 counts of money laundering. The charges stem from the period 2003 to 2006 during which about $500,000 was paid to two shell companies for bribes for Mr. Duperval in connection with the issuance of preferred telecommunication rates, a continued telecommunications connection with Haiti and the continuation of a favorable contract with Haiti Telco. The payments were documented with invoices for consulting services although no real services were rendered. Previously, seven other individuals have been convicted on charges related to the scheme.


Goldman Sachs Execution & Clearing, L.P., a registered futures commission merchant, agreed to the entry of a cease and desist order, to implement improved procedures and to pay a $5.5 million civil penalty and $1.5 million in disgorgement to resolve a proceeding. The action was based on allegations that it failed to diligently supervise accounts during the period May 2007 through December 2009. The firm provided back-office and other services to some clients who are broker dealers. One of those clients permitted investors to trade commodities in subaccounts. Goldman Sachs Execution failed to diligently supervise the handling of the subaccounts, failing to investigate signs of questionable conduct regarding rule violations. During the period the firm received about $1.5 million of gross fees and commissions from transacts it executed and/or cleared on behalf of the broker dealer involved.


Market crisis: The FSA brought an action against HBCS Group and its primary subsidiary, the Bank of Scotland PLC, centered on the market crisis. From January 2006 through December 2008 the FSA concluded that Bank of Scotland: Pursued an aggressive growth strategy that focused on high-risk, sub-investment grade lending; increased the complexity and size of its high risk transactions as the crisis unfolded; continued to increase its market share in this high risk area as others pulled out of the market; and had an internal structure more focused on profits than risk. These actions stemmed from serious control deficiencies. As the market crisis continued to unfold, and the stress in the bank's transactions became apparent, it was "slow" to move the transactions to the High Risk area despite a significant risk to the firm's capital. This failure meant that the extent of the risk was not fully known to the Group's board or auditors. Ultimately as a result of these failures the government and the taxpayers were forced to bail out the Bank. For failing to take reasonable care to organize and control its affairs with adequate risk management the FSA imposed a censure. The agency explained that ordinarily a fine would be imposed but that would be a double cost to the taxpayer under the circumstances.

March 16, 2012
Top 5 Corporate & Securities Blog Posts This Week
by Stephanie Figueroa

Today we continue our weekly installment highlighting the best of the corporate and securities blogosphere from this past week. If there are any corporate or securities blogs you think should be highlighted by our Top 5, please comment on this post and we'll check them out!

1) The Race to the Bottom: Second Circuit Agrees to Stay Decision in SEC v. Citigroup - This post discusses the Second Circuit's issuance of a stay of the trial court's decision in SEC v. Citigroup, where Judge Rakoff rejected a $285 million settlement between the SEC and Citigroup. The appellate court found that the SEC had "shown a likelihood of success", a finding that was not an express decision on the merits.

2) The D&O Diary: Cornerstone Research Releases 2011 Securities Lawsuit Settlement Study - This post reports on the findings from the annual study of securities suit settlements from Cornerstone Research entitled, "Securities Class Action Settlements: 2011 Review and Analysis". Of primary note, there were 65 court-approved securities class action lawsuits settlement during 2011, representing a total of $1.4 billion in settlement funds. The number of 2011 settlements is 25 percent below the prior year's number and 35 percent below the average of the preceding 10 years. The aggregate settlement amount represents a 58 percent decline from 2010's total of $3.2 billion.

3) Federal Securities Law Blog: Haitian Foreign Official Convicted For Money Laundering Related to FCPA Violations- This post reports the conviction of Jean Rene Duperval by a federal jury in Florida on two counts of conspiracy to commit money laundering and 19 counts of money laundering related to an FCPA scheme involving Telecommunications D'Haiti S.A.M. ("Haiti Teleco"), the Haitian state-owned telecommunications company. The conviction is the latest Government prosecution related to FCPA at Haiti Teleco, and marks the second conviction of a foreign official involved in the scheme.

4) Jim Hamilton's Blog: In Letter to SEC, House Leader Urges Volcker Rule Exemption for Venture Capital Funds- This post shares how Representative Bob Goodlatte (R-VA) urged the SEC that the final regulations implementing the Dodd-Frank Volcker Rule provisions exempt venture capital funds or provide that they are a permitted activity under Section (d)(I)(J). The post goes on to note Congressman Goodlatte's arguments for why venture capital funds should be exempt.

5) Deal Book: Wall Street's Latest Campus Recruiting Crisis- This post notes the latest public relations issue to hit Wall Street is happening at campuses across the nation, where students are increasingly wary of pursuing a career in finance. "College students who were once attracted to prestigious banks like moths to bonfires are increasingly turning to other industries in search of success. Insiders say that pained testimonials of industry life can scare off would-be financiers from even applying for jobs at the most selective firms."

March 16, 2012
NLRB Poster Requirement: Update
by The Corporation Secretary

In our post of August 30, 2011, we advised that the National Labor Relations Board had adopted a final rule on August 25, 2011 (published on August 30) requiring most private-sector employers to notify employees of their rights under the National Labor Relations Act by posting a notice in a conspicuous location in the workplace. The poster requirement, designed to notify employees of their rights under the National Labor Relations Act, such as the right to organize a union, had an original deadline of November 14, 2011. This deadline for posting the notice was subsequently extended to April 30, 2012 because of litigation challenging the rule brought by various plaintiffs including the National Association of Manufacturers, the National Right to Work Legal Defense and Education Fund, Inc., the Coalition for a Democratic Workplace, and the National Federation of Independent Business. (As noted in our August 30th post: "This rule will undoubtedly be tested in the courts.")

On March 2, 2012, the federal district court in Washington, D.C., upheld the statutory authority of the NLRB to require employers to display a poster informing employees of their rights under the National Labor Relations Act. Significantly, however, the court struck down two of the penalty provisions included in the NLRB's final rule.

The court held that the National Labor Relations Act includes a "broad, express grant of rulemaking authority" to the NLRB, which permits the NLRB to require employers to post a notice informing employees of their rights under the Act. But the court agreed with the plaintiffs that two provision in the final rule violated the plain language of the Act: First, that any failure to post the notice could be deemed an unfair labor practice under the NLRA, and second, that failure to post a notice would allow the NLRB to extend the six‐month limitations for filing a charge against the employer alleging other unfair labor practices. While invalidating these aspects of the NLRB's rule, the court noted that the NLRB may be able to prove in an appropriate case that a failure to post the notice constitutes an act of interference with protected rights and thus violates the Act. The court also noted that its rejection of the provision calling for tolling the statute of limitations for failure to post the notice did not prohibit a party alleging an unfair labor practice from establishing the elements of "equitable tolling" in a particular case. Moreover, the court did not strike down that part of the rule allowing an employer's "knowing and willful" failure to post a notice to be considered evidence of unlawful motive.

NLRB Chairman Pearce released a statement on March 2nd, indicating that the NLRB would pursue the alternative left open by the court and make case-by‐case determinations of whether a failure to post the notice constitutes an unfair labor practice.

The plaintiffs have appealed the court's decision to the U.S. Court of Appeals for the D.C. Circuit and have asked the appellate court to enjoin the posting requirement while the appeal is pending. Unless a stay is granted, the deadline remains April 30, 2012.

View today's posts

3/16/2012 posts

D & O Diary: Second Circuit Rebuffs Rakoff, Grants Stay to Hear Appeal on Settlement Ruling
The Harvard Law School Forum on Corporate Governance and Financial Regulation: Delaware Court Considers Conflicts of Interest in M&A
Insight: Carpenters File Revised Auditor Independence Proposals
Securities Law Prof Blog: Second Circuit Grants Stay in SEC v. Citigroup
CrunchedCredit: If It Looks Like a Duck, err, a SARE Debtor...
Conglomerate: The SEC Mandamuses Rakoff
Truth on the Market: The Apple E-Book Kerfuffle Meets Alfred Marshall's Principles of Economics
SEC Actions Blog: This Week In Securities Litigation (Week ending March 16, 2012)
Securities Law Practice Center: Top 5 Corporate & Securities Blog Posts This Week
The Corporation Secretary's Blog: NLRB Poster Requirement: Update

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