Deal Diary

The world has changed a lot since our 2020 report. A global pandemic; a reckoning on race, inequality and social justice; a climate crisis; an economic shock; and increased political polarization have created challenging dynamics for companies and boards globally. The role of the board in managing risk and charting the course ahead is more critical today than ever before. This report delves into these wide-ranging and interlocking issues and offers insight on how directors and management must proactively embrace their stewardship roles in this brave new world.

Akin Gump has issued a labor and employment alert detailing recent state statues on noncompetition and other restrictive covenants. The key points cover tight labor markets which are leading courts and legislatures to closely scrutinize noncompetes and other restrictive covenants; changes in an employee’s job and/or the company’s business, it may be prudent to proactively amend or supplement the existing standardized documents to prophylactically further shield the company against threats to its customer relationships, employees and confidential information; and that regular review and maintenance can help maximize employers’ ability to protect their businesses against breaches of former employees’ contractual agreements and unfair competition.

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Akin Gump has issued an alert highlighting court rulings, SEC statements and other regulations and requirements involving cryptocurrency that have been issued and developed in 2018.

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Bloomberg Law's Securities Regulation & Law Report has published the article “Big Data and the Risks of Insider Trading,” written by Peter Altman and Kelly Handschumacher, litigation partner and associate, respectively, at Akin Gump, and Jennifer Hustwitt, a vice president in the financial institutions group at Marsh & McLennan. The article looks at how investment advisors can prevent, or even mitigate, liability for insider trading in connection with the use of alternative data.

On November 29, 2017, Deputy Attorney General Rod Rosenstein announced the addition of an FCPA Corporate Enforcement Policy to the U.S. Attorneys’ Manual (USAM). The Policy largely codifies upon the Department of Justice’s (DOJ) 2016 FCPA Pilot Program, but makes some modifications.

Federal securities fraud class action filings have been on a meteoric rise over the past 18 months. According to a recent report released by Cornerstone Research, plaintiffs filed 226 new federal securities fraud class action cases in the first six months of 2017. This figure is the highest ever since Congress passed the Private Securities Litigation Reform Act in 1995, eclipsing the previous record of 152 set in the second half of 2016. The 226 new cases in 2017 also shatter the 1997-2016 historical average of 96 filings per half.

The year 2016 was the biggest yet for U.S. securities class action settlements. On June 14, 2017, Securities Class Action Services, a division of Institutional Shareholder Services, Inc., released its updated list of the top 100 securities class action settlements of all time. The revised list featured 13 settlements in 2016 totaling over $5.6 billion. This, according to the report, was enough to make 2016 the biggest year ever in terms of total approved settlement funds.

This week, the Supreme Court in Kokesh v. SEC unanimously held that the Securities and Exchange Commission’s (SEC) equitable disgorgement remedy is subject to a five-year statute of limitations because it is a “penalty” within the meaning of 28 U.S.C. § 2462, which governs “an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture.” Before Kokesh, some circuits had held that the SEC could obtain disgorgement of the entire amount of the ill-gotten gains or losses avoided, even those that extended well beyond the five-year statute of limitations associated with most federal securities laws. Kokesh clarifies that both civil penalties and disgorgement are subject to the same five-year limitations period.