Corporate Responsibility and Defense

On July 30, 2002, the Sarbanes-Oxley Act (SOX), which establishes a new system of checks and balances for public corporations, was signed into law. Sarbanes-Oxley redefines the duties and relationships among corporate executives, directors, audit committees, in-house and outside counsel, independent auditors, insurers, securities exchanges, and government regulatory agencies. These laws and related regulations promise to spawn both private litigation and administrative enforcement actions involving civil penalties and criminal sanctions against corporations and those fiduciaries responsible for guiding their activities.

SOX legislation affects CEOs and CFOs directly, increasing their certification responsibility and reporting requirements. The Act creates a federal system of checks and balances within public companies, effectively creating independent duties of Audit Committees and other parts of corporations. CEOs, CFOs and Audit Committees will increasingly want advice separate from company counsel when issues arise. With the creation of whistleblower rights within companies and expanded shareholder rights, companies, their executives and directors face heightened scrutiny and increased exposure to criminal and civil penalties for wrongdoing.

Frost Brown Todd has assembled a multi-disciplinary team of lawyers to advise corporate and individual clients operating in this threatening new environment. Our Corporate Responsibility and Defense lawyers proactively advise private and public companies on corporate governance, disclosure and compliance issues. We also advise clients who find themselves defending allegations of wrongdoing or malfeasance. Our goal is to help our clients protect the value of their business by preserving its integrity so that business leaders can conduct business in an atmosphere of foresight instead of fear.

Our practice provides:

• Wide-ranging experience in matters of corporate governance, including compliance guidelines and programs, CEO/CFO certification and underlying procedures, disclosure compliance, trading policies, director independence, committee charters and related issues
• investigative resources, along with the ability to audit current procedures and benchmark them against new legislative and regulatory standards and industry best practices
• Connections with regulatory agencies — delivering insight into the next wave of regulatory action along with the ability to clarify areas of ambiguity
• Experience in white collar criminal defense, and in dealings with the U.S. Department of Justice and the SEC and the ability to provide vigorous and effective representation should malfeasance on the part of the company or its executives be alleged.

Proactive Advice and Planning Points

Even those public companies with best practices in corporate governance already in place will need to intensify their focus on three areas. First, they will need to stay abreast of a steady stream of new rules and take prompt action to comply with the new requirements and evolving market expectations. Second, they should expect to see an increased volume of investigations and enforcement by the SEC and the Department of Justice. Finally, they must be prepared to contend with a rash of shareholder lawsuits and other private litigation with newly minted causes of action. Our services include:

• Protecting Attorney Client and Work Product Privilege in light of new "whistle blower" rules
• Corporate Compliance Plans
• Codes of Business Conduct and Ethics Policies
• Adequacy of Disclosures in Public Filings, including enhanced disclosures in the presentation of financial data
• Accelerated Reporting of Insider Trading and Trading Polices, including blackouts, lockups, etc.
• Implementing insider trading policies and procedures, including Section 10b5-1 trading plans and Section 16(b) reporting requirements and defending allegations of illegal insider trading
• Accelerated Reporting of Transactions and other significant events on Form 8-K, and Regulation FD compliance
• Organizational, Staffing and Functions of Board Committees, including Audit Committees, Compensation Committees and "Independent Directors"
• D&O Liability Insurance Coverage Planning and Reviews
• Executive Compensation and Employee Stock Options – Planning and Implementation.
• USA PATRIOT Act Compliance
Reactive Advice and Defense Points
• Breach of Fiduciary Duties of Care, Loyalty, etc.
• Internal Investigation of sensitive issues and preservation of attorney-client privilege
• SEC Investigations – Informal Inquiries and Formal Actions
• Insider Trading
• Regulation FD
• Document Destruction and Other Spoliation
• D&O Liability Insurance Claims
• Section 10b-5 Fraud Claims
• Other Shareholder Derivative Actions
• Whistleblower Allegations by In-House Lawyers and Others
• Public and Media Relations Crisis Management

True Business Resources

We assist companies in identifying, prioritizing and reducing the legal and operational risks to that business by designing and implementing a thorough Corporate Compliance Plan. Corporate Compliance Plans are an important first step in minimizing risk to the company and its owners and officers, especially in the areas that are subject to intensive government oversight, i.e., healthcare (Medicare and Medicaid billing, HIPAA, Stark, etc.), ERISA/employee benefits, financial transactions reporting and protection of customer information, international trade and tax matters.

Frost Brown Todd is a full-service law firm with more than 350 lawyers. We offer multidisciplinary services from more than 50 integrated practice areas to ensure that no consideration is neglected in even the most complex transactions.
Our experienced leadership and our collaborative approach help us to approach each client and project with exceptional understanding and insight. We guide, we listen, we develop corporate governance strategies, and then we bring our full resources to bear to help solve client challenges, across the country and around the world.