Wednesday, October 31, 2012

An Homage to Judicial Anger

Public perception aside, one of the most important traits of a judge is what we delightfully refer to as "judicial temperament."  The ABA Standing Committee on the Federal Judiciacy defines judicial temperament as
compassion, decisiveness, open-mindedness, courtesy, patience, freedom from bias, and commitment to equal justice under the law.

Nowhere in there does it say well-motivated righteous indignation as reflected by judicial anger.  But then, Vanderbilt lawprof Terry Maroney argues that it is time for a change.  The law review article begins with very short sentence: Judges get angry.

There is no way to avoid the reality that judges are people, and as such suffer from the same frailties as the rest of us. Bias. Anger. Boredom. The aspiration of including judicial temperament as a criterion for the selection of judges is that they will suffer fewer frailties than most.  We may not be able to pick judges who are devoid of the ignoble traits of humanity, but we can try, right?

Legal culture, however, is of two minds about judicial anger. On the one hand, anger could be called the quintessentially judicial emotion. Humans (including judges) feel anger when we perceive that a rational agent has committed an unwarranted wrongdoing; that experience of anger generates a desire to affix blame and assign punishment, and facilitates actions necessary to carry out that desire. This coupling of judgment and action rather precisely describes one core function of the judge. Indeed, we may expect judges to act as society’s anger surrogates, so as to avoid vigilante action. We often rely on them to assign blame, frequently task them with assigning consequences, and always hope they will be motivated to perform these functions.

On the other hand, anger seems to pose a danger to the neutral, careful decisionmaking we also expect of judges. Anger is powerful, and its effects sometimes regrettable; consider the actions of a Florida judge who, "red faced and yelling," left the bench to "physically intimidate" an assistant state attorney. Anger is the prototype for the traditional view of emotion—a view strongly reflected in legal theory—as a savage force that unseats rationality, distorts judgment, manifests in impulsive aggression, and imperils social bonds. Indeed, fear of such irrationality led Judge Richard A. Posner to declare that we ought to "beware . . . the angry judge!"

It's unclear to me whose legal culture Maroney is referring to, but it's surely not mine.  There is no aspect of "legal culture," if that's defined as what those of us engaged in the law desire, that seeks judges to be society's avenging angels, the embodiment of blind rage.  While we ask judges to "affix blame and assign punishment," we do so based on applying the law and achieving its legitimate goals.  What we do not do is ask judges to vent our collective spleen against those we despise.

Sure, the public always enjoys judicial rage, provided it meets with their approval.  If the public hates someone, they applaud the judge who hates them too and lets their hatred come across loud and clear. This judge becomes a public darling for expressing what people feel; it's feel-good law for the benefit of those who enjoy watching those they despise "get what's coming to them."  

But this flies in the face of what judicial temperament is all about.  And Maroney says that's not only okay, and can't be helped, but should be tapped for righteous causes.

Righteous judicial anger rests on accurate premises; is relevant; and reflects worthy beliefs and values.

Where we have traditionally sought to rise above personal anger, Maroney exalts it, provided it comports with "worthy beliefs and values," which by definition are those that we agree with.

Judicial anger at criminal sentencing often can be justified as well, and for a similar set of reasons. By the time of sentencing, blameworthy conduct already has been shown. Assuming, as the judge must, the accuracy of that finding, the judge is entitled to respond emotionally to any harm the defendant has caused. Expressing anger vividly demonstrates to victims and their survivors that they are within the judge’s zone of care. It communicates, in a way that other demonstrations could not, that they are members of the valued community.

It also demonstrates judicial respect for the defendant. As one feels anger only where a human agent has chosen to inflict an unwarranted harm, showing anger reveals the judge’s assessment that the defendant is a fellow human possessed of moral agency. By using his authoritative position to send moral messages to the wrongdoer, the judge ideally frees others in society from feeling a need to do so themselves, including through vigilante action.

Rarely has anyone suggested that the expression of a judge's personal outrage "demonstrates judicial respect for the defendant." Having stood beside more than one defendant being sentenced and subjected to judicial outrage, no one ever told me afterward how much he appreciated the judge's moralistic rant because it reflected respect for his humanity.  In fact, it's never been well-received in my experience.

There is no disputing Maroney's premise that judges are people, and as people, suffer from an emotional bias in the performance of their role.  When they take off their robes, they no doubt have feelings just like the rest of us.

But when they put on their robe, they assume the responsibility of their position. They are no longer entitled to let their personal feelings intrude on the authority they have over others.  It's not that it doesn't happen, but that the goal is to prevent it from happening.  Maroney argues the opposite, that since it happens, we should embrace anger and encourage it to be used for socially desirable ends, which means the ends that we agree with.

The tyranny of the majority is always a popular thing, as it makes the villagers storming the courthouse with their torches and pitchforks feel validated.  The last thing we need is to relieve judges from their obligation to maintain judicial temperament and play to the angry mob.  Will the mob agree with the judge's moral outrage and applaud her righteous indignation?  Probably.  This is precisely what we fight against.

Doug Berman

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Trigiani named “Leader of the Year”

Lucia Anna “Pia” Trigiani, a prominent Northern Virginia real estate lawyer and past president of the Virginia Bar Association, was named “Leader of the Year” by the 2012 class of “Leaders in the Law.”

Last night, Virginia Lawyers Weekly held its seventh annual “Leaders in the Law” awards reception at the Science Museum of Virginia. The program honors attorneys and others in the legal field who have made significant contributions to the practice of law.

The 28 members of the class of 2012 were recognized for their accomplishments during yesterday’s ceremony.

The honorees were asked to vote for one member of their class as the “2012 Leader of the Year.” This year’s Leaders selected Trigiani for the honor.

Trigiani is a partner in the Alexandria firm of MercerTrigiani, where she focuses her practice on community association law. She has also been a leader in the legal field through her bar service and advocacy before the General Assembly to promote legislative reform.



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Court proposes to drop full-time rule for waived-in lawyers

Following angry reactions prompted by examination of the rules for “waived in” lawyers, the Supreme Court of Virginia is proposing to drop its full-time practice requirement.

The change would affect lawyers who were licensed in other states and then admitted to the bar in Virginia by reciprocity, without taking the Virginia bar exam. Many of those lawyers, said to be “admitted by motion,” chafed at a rule under which their bar admission could be revoked if they failed to “practice full time as a member of the Virginia State Bar.” Regulations specified at least 35 hours a week.

Under proposed rules published for comment this week, the permanent full-time practice requirement would be replaced by a requirement for five years of practice “predominantly” in Virginia. The amended rules apparently would dispense with any minimum number of hours for a law practice.

“Predominantly” would mean that a lawyer’s Virginia practice each year would equal or exceed any practice in other jurisdictions.

Current regulations prohibit a waived-in lawyer from dividing time between a Virginia office and one in another jurisdiction.

Until the five-year requirement is met, a waived-in lawyer would have to certify annually that he or she is practicing predominantly in the commonwealth. If the lawyer elected not to continue with a predominant Virginia practice, the lawyer could opt for associate status.

Lawyers admitted on motion complained last year that the full-time practice requirement unfairly hindered attorneys taking time off for child birth or child care, older lawyers seeking to limit their work hours and retired lawyers who wanted to offer pro bono services.


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Video: Reversed and Remanded

Celeste Yeager, a partner in the Dallas office of Gardere Wynne Sewell, speaks with senior reporter John Council about voir dire in a contract dispute in which the jury returned a verdict after 20 minutes of deliberation.


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Smartphone Security

Is your smartphone really secure? On Digital Detectives, co-hosts Sharon D. Nelson, Esq., President of Sensei Enterprises, Inc. and John W. Simek, Vice President of Sensei Enterprises, welcome guest, computer scientist, and certified forensic analyst Andrew Hoog, co-founder of viaForensics, to talk about the ins and outs of smartphone security. Andrew shares his insight on the most secure smartphone, whether mobile devices are really a target for sophisticated cyber-criminals and the policies corporations and law firms need to address mobile devices.


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Legal Issues Created by Story World Communities and Transmedia

The rise of interactive story world communities and transmedia marketing campaigns has brought about scores of intellectual property, copyright law and creation rights issues. Lawyer2Lawyer co-hosts and attorneys, Bob Ambrogi and Craig Williams, bring together Esther Lim, the Founder of The Estuary and Scott Walker, the President of Brain Candy, for an in-depth analysis of the questions and concerns generated by collaborative entertainment and multi-platform interactive engagement.


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What Should Solos Be Charging?

Are you confused about what to charge your clients? New Solo host and solo practitioner, Attorney Kyle R. Guelcher talks to Attorney Jeremy Byellin, from Byellin Law, PLLC, about how a solo can determine how much to charge, the Laffey Matrix, the pros and cons of charging flat rates to clients and offers advice on how to communicate fees during the initial client meeting.


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Lawyers' fiduciary responsibility to partners

Yesterday, I watched the Richard Gere film, Aribtrage. The film portrays a successful billionaire's moral decline as he attempts to save his failing company from his poor decisions. He "cooks" the company books by borrowing money that is not shown on the books as such in order to keep up appearances in order to complete a sale of the company, falsifies investors reports and otherwise plays "loose" with the truth. This is a man in trouble, but Gere continues to exude confidence in order to reach his goal.

Coincidentally, in today's Wall Street Journal, reporters once again discuss the Dewey & LeBoeuf LLP demise. Prosecutors are still questioning whether there was deception about the financial condition of the firm in the last few months. Were partners told the truth, were they given accurate financial reports, and were the firm obligations to pay down outstanding debt on behalf of terminated partners honored? And, were the transgressions that did occur a matter of a struggling business doing what it could to survive or a matter of criminal and/or civil fraud?

As a matter of "black letter law," it's clear that management (managing partner and management committee members) owe a fiduciary duty to others -- investors, lenders and partners. Did they breach this duty? How close to Arbitrage did the leaders of Dewey come?


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Tuesday, October 30, 2012

THE PRACTICE: With fact witnesses, do you get what you pay for?

Ethical issues aside, the credibility of the testimony is tarnished in direct proportion to the degree of varnish.


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Predictive Coding: A Rose by Any Other Name

One of e-discovery’s hottest topics today is predictive coding. So what exactly "is" predictive coding? On Digital Detectives, co-hosts Sharon D. Nelson, Esq., President of Sensei Enterprises, Inc. and John W. Simek, Vice President of Sensei Enterprises, welcome guest Dan Gallivan, one of the founders and Chief Technology Officer for Gallivan Gallivan & O’Melia , to discuss technology-assisted review, also known as predictive coding. Dan shares his thoughts on this new technology replacing keyword search, common areas of misunderstanding and Judge Peck’s role as a flag bearer for predictive coding.


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Blogging, Branding & Marketing for Solos

New Solo host, Attorney Kyle Guelcher, a solo practitioner and the most recent Chair of the Young Lawyers Division of the Massachusetts Bar Association, joins Frank A. Cseke, a Fort Collins, Colorado-based attorney and founder of the blog, The Solo Lawyer, to discuss some hot topics in the solo attorney community. Kyle & Frank take a look at the power of blogging, and a host of other topics including: marketing, rainmaking, "good" clientele and taking a Zen approach to the law.


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SJC Ruling on Foreclosures

Kathleen C. Engel, law professor and Associate Dean for Intellectual Life at Suffolk Law School, discusses the Massachusetts foreclosure crisis and actions being taken against four major banks. Learn more about Dean Engel at


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Legal Translation Services for Law Firms

When should a law firm consider either translation or interpretation services? Jared Correia, the host of The Legal ToolKit and Law Practice Management Advisor with Mass. LOMAP gets the answer from George Rimalower, founder and president of ISI Translations, Inc. Jared and George also explain the benefits of using a translation service and how these services can boost your legal firm’s bottom line.


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Ethical Obligations within E-Discovery

On The ESI Report, host Michele Lange, Attorney and Director of Thought Leadership at Kroll Ontrack welcomes special guest, Judge Lisa Margaret Smith, from the Southern District of New York, to take a look at ethical obligations within the field e-discovery. In addition, on the Bits & Bytes Legal Analysis segment, Kroll Ontrack Legal Correspondent, Elliot Westman, takes a glimpse at e-discovery frameworks adopted in 2011 in the state of Utah and the Federal District of Delaware.


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Language is Everything

For growth and expansion, there are two philosophies:

               Trail your growth (conservative), or

               Hire for the future (confident and assertive)

For troubled times, there are two philosophies:

               Slow to hire

               Quick to fire

 Lawyers should do only two things:

               Market for new business:

                              Only they know if they want to represent the prospect

                              Only they know if they’re competent to handle the matter


                              Only the lawyer is licensed by the state to practice

All else can and should be handled by others


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Gone Clio with Attorney Michael J. P. Schewe

On this edition of Gone Clio, Clio co-founder Jack Newton talks with special guest, Attorney Michael J. P. Schewe of Schewe Law LLC. Michael talks about his passion for employment-related issues, the pros and cons of starting your own law firm, and how Clio makes him confident when a malpractice issue comes up.


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Monday, October 29, 2012

NSSTA’s Take the Hill

This past April, members of National Structured Settlement Trade Association (NSSTA) decided to "Take the Hill". They headed to Capitol Hill for meetings with members of Congress and senior Congressional staff to discuss important public policy and the economic security benefits of structured settlements. Ringler Radio host, Larry Cohen talks to Ringler colleagues, Peter Early and Erin Muller about their experience at "Take the Hill" and their mission to educate our elected officials on the benefits of structured settlements.


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NLRB election rule is enjoined for lack of quorum

The US District Court for the District of Columbia has ruled that the National Labor Relations Board's December 22, 2011 rule amending its election procedures is invalid because the Board did not satisfy the statutory quorum requirement in adopting the rule.

Chamber of Commerce v. NLRB (Dist DC 05/14/2012)

Two of the Board's three members voted in favor of adopting the final rule. The third member of the Board, Brian Hayes, did not cast a vote.

As the court put it,

"The NLRB's claim that Hayes was part of the quorum that adopted the final rule, then, is based only on the fact that he was a member of the Board at the time the rule was circulated and thus was sent a notification that it had been called for a vote."

"Two members of the Board participated in the decision to adopt the final rule, and two is simply not enough. Member Hayes cannot be counted toward the quorum merely because he held office, and his participation in earlier decisions relating to the drafting of the rule does not suffice. He need not necessarily have voted, but he had to at least show up. At the end of the day, while the Court's decision may seem unduly technical, the quorum requirement, as the Supreme Court has made clear, is no trifle."

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The Legal Limits of Sports Violence

The infamous elbow jab of Metta World Peace, NFL "Bounty Hunters," soccer riots, high school hockey brawls ...where is the legal line drawn when it comes to violence in sports? Or is it just the nature of the game? Lawyer2Lawyer co-hosts and attorneys, Bob Ambrogi and Craig Williams turn to Attorney Eldon L. Ham, an adjunct professor at Chicago-Kent College of Law and Professor Matthew Mitten, Director of the National Sports Law Institute at Marquette University Law School, for their take on whether there should be legal implications when an athlete goes too far.


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Gender Equality in Citizenship Laws

There is great debate over a law that makes it easier for mothers to transmit citizenship to their out-of-wedlock children than it is for fathers. In this edition of the BU Law podcast, host David Yas, a BU Law alum, former publisher of Massachusetts Lawyers Weekly and a V.P. at Bernstein Global Wealth welcomes Kristin A. Collins, Associate Professor of Law at BU School of Law, to spotlight the Supreme Court case Flores-Villar v. United States, the importance of gender equality in citizenship laws and reaction to the Supreme Court’s decision.


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Liability in the Costa Concordia Cruise Ship Tragedy

The capsizing of the luxury cruise ship, Costa Concordia, off the coast of Italy has created a torrent of possible criminal charges against the captain and civil litigation against the cruise line company in courtrooms around the world. Lawyer2Lawyer co-hosts and attorneys, Bob Ambrogi and J. Craig Williams, along with Attorney Joseph McFaul, special counsel for Sedgwick LLP in Irvine, California, sort through the plethora of legal issues associated with this cruise ship tragedy.


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Virtual Paralegals: Forming a Magical Team

Are you thinking about working virtually but don’t know how to get started? Paralegal Voice co-host Vicki Voisin welcomes virtual professionals Tina Marie Hilton, owner of Clerical Advantage and Cathy L. Ribble, ACP, owner of Digital Paralegal Services, LLC, to spotlight virtual paralegals and how to form a magical team. Tina and Cathy share their personal experiences, the important skills needed to be a successful virtual professional, as well as the websites and blogs that they visit often for their businesses. They also predict a very bright future for virtual professionals and provide their reasoning for that.


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Future OS: Windows 8, Apple Mountain Lion and Beyond

Has it really been three years since the introduction of Windows 7? Surveys indicate that Windows XP users still outnumber Windows 7 users. Recent announcements indicate that we'll be seeing both Windows 8 and a new Mac OSX update called Mountain Lion in 2012. In this episode, Dennis Kennedy and Tom Mighell take a look at what we have now learned about operating system updates, the current state of operating systems, and what our future operating systems might look like. After you listen, be sure to check out Tom & Dennis’ co-blog and book by the same name, The Lawyers Guide to Collaboration Tools and Technologies.


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Six Hats: Parallel Thinking for Paralegals

Edward De Bono’s, Six Thinking Hats, also known as parallel thinking, is a fun method used in NALA’s year-long leadership webinars for those involved in state and local affiliated associations. On The Paralegal Voice, co-host Vicki Voisin welcomes Karen G. McGee, ACP, President of NALA, as they spotlight De Bono’s method of thinking and share some important tools paralegals can use to facilitate open discussions in a meeting or work situation.


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Sunday, October 28, 2012

International Law Opportunities at Suffolk University Law School

Professor Christopher Gibson, Associate Dean, & Ian Menchini, Director of Electronic Marketing and Enrollment Management discuss the many opportunities available through Suffolk Law's International Law program. Learn more at


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Duo Games Duo Pinball (Albuquerque Journal)

Share With Friends: Share on FacebookTweet ThisPost to Google-BuzzSend on GmailPost to Linked-InSubscribe to This Feed | Rss To Twitter | Law - Video Stories, RSS and RSS Feed via Feedzilla.


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Pharma sales reps are FLSA exempt as outside salesmen (5-4)

This morning the US Supreme Court decided - on a 5-4 vote - that pharmaceutical sales representatives are "outside salesmen" and therefore exempt from overtime under the Fair Labor Standards Act. The Court also unanimously held that the Department of Labor's recently-announced contrary interpretation was entitled to exactly zero deference.

Christopher v. SmithKline Beacham (US Supreme Ct 06/18/2012)

Christopher, a pharmaceutical sales representative, sued the employer for violation of the Fair Labor Standards Act (FLSA) alleging failure to pay overtime. The trial court granted the employer's motion for summary judgment and denied Christopher's motion to amend the judgment based on the trial court's failure to consider an amicus brief filed by the Secretary of the Department of Labor (DOL). The 9th Circuit affirmed. The US Supreme Court affirmed (5-4).

The job of a pharmaceutical sales representative is to try to persuade physicians to write prescriptions for products in appropriate cases. For over 70 years DOL acquiesced in an interpretation that they were "outside salesmen" who are exempt from FLSA overtime requirements. In amicus briefs filed in Circuit courts DOL took the position that a "sale" requires a "consummated transaction." In Supreme Court briefing DOL's position was that there is no "sale" unless the employee "actually transfers title."

The Court said that the DOL's new interpretation is entitled to no deference at all because it would impose massive liability for conduct that occurred before the interpretation was announced, there had been no enforcement actions suggesting the industry was acting unlawfully, DOL gave no opportunity for public comment, and the interpretation is "flatly inconsistent" with the FLSA.

The FLSA definition of "sale" includes consignments, which do not involve a transfer of title. Although DOL regulations say that sales include the transfer of title, that does not mean a sale must include a transfer of title. The regulations also use the phrase "other disposition" which - in this unique regulatory environment - includes the work of pharmaceutical sales representatives. The representatives also bear all the exterior indicia of salesmen (average salaries exceeding $70,000, work that is difficult to standardize to a particular time frame, etc.)

The DISSENT reasoned that sales of drugs are made by pharmacists, not pharmaceutical sales representatives. The pharmaceutical sales representative neither make sales nor promote "their own sales." (The dissent agreed that the DOL's current views expressed in briefs are not entitled to any weight.)

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Learning to Do More With Less, Law Firms Take Upper Hand in Lease Negotiations

According to a recently released real estate report, incentives abound in most U.S. markets for law firms looking to change locations, or reorganize or shrink their office space. Exceptions remain, however, in markets where technology and energy work are booming. The Am Law Daily checks out the status of a dozen law firm real estate markets.


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Legal leaders urge judge to replace Morrogh in capital case

A letter signed by 59 former judges, former prosecutors, lawyers and law professors asks the judge in the revived Justin Wolfe capital murder case to remove Fairfax County Commonwealth’s Attorney Ray Morrogh as special prosecutor.

Defense lawyers for Wolfe claim Morrogh is too cozy with Prince William County Commonwealth’s Attorney Paul Ebert. They argue Ebert, the original prosecutor in the case, was discredited by the findings of a federal judge who threw out Wolfe’s conviction as tainted by prosecutorial misconduct.

Among those supporting the motion to disqualify Morrogh are former Virginia Attorneys General William G. Broaddus and Stephan D. Rosenthal. A number of Virginia attorneys also signed the letter, including nine former prosecutors.

According to the letter, the signers are troubled by Morrogh’s quick decision to retry Wolfe on capital murder charges. “This suggests a hurried decision in which the special prosecutor did not carefully examine the evidence to reach an independent conclusion about the case, but instead relied on the earlier deliberation of the Prince William County prosecutors,” the letter reads.

A hearing is scheduled for Oct. 31 on the motion to disqualify Morrogh as special prosecutor.

Morrogh said he could not comment because of ethical rules.


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Planning for Your Digital Estate

With so much of your key information and assets migrating online, it’s a challenge to remember all your passwords and accounts. So just imagine the headaches your spouse or family will have trying to figure it all out once you pass away. On this Kennedy-Mighell Report, Dennis Kennedy and Tom Mighell discuss how to prepare your “digital estate” before death or incapacity. After you listen, be sure to check out Tom & Dennis’ co-blog and book by the same name, The Lawyers Guide to Collaboration Tools and Technologies.


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Time Is Running Out To File Suits Over 2008 Crisis

The $1 billion lawsuit the Justice Department filed against Bank of America over mortgage fraud allegations may be the most accountability taxpayers ever see from the 2008 crisis. The statute of limitations is expiring, and no major Wall Street bank or banker has been charged with a crime.

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Second Circuit Holds That SEC Need Not Prove "Proximate Cause" for Aiders and Abettors Under Section 20(e) of the Securities Exchange Act of 1934

In SEC v. Apuzzo, 2012 WL 3194303 (2d Cir. Aug. 8, 2012), the United States Court of Appeals for the Second Circuit clarified the standard for finding liability for aiding and abetting under Section 20(e) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78t(e). Under Section 20(e), the Second Circuit held, the Securities and Exchange Commission (“SEC”) need not show that an aider and abettor “proximately caused” the harm on which the primary violation was predicated. Instead, the SEC need only show that the aider and abettor “in some sort associated himself with the venture, that he participated in it as in something he wished to bring about, and that he sought by his action to make it succeed.” In Appuzo, the Second Circuit has clarified that the SEC need only plead this level of participation — and not proximate causation — to adequately allege that an aider and abettor meets the “substantial assistance” prong of Section 20(e).

Apuzzo centered around a series of three-way transactions designed to allow the primary violators — United Rental, Inc. (“URI”), an equipment rental corporation, and its chief financial officer (“CFO”), Michael Nolan — to book sales improperly in violation of generally accepted accounting principles (“GAAP”). In order to facilitate this transaction, URI enlisted Terex Corporation (“Terex”), a construction equipment manufacturer, and, more specifically, Terex’s CFO, Apuzzo, to assist it in improperly booking revenue.

As structured, URI would sell equipment to General Electric Credit Corporation (“GECC”), a financing corporation, which would then lease back the same equipment to URI. GECC, however, would participate only if someone would guarantee that the equipment could be re-sold at a certain rate of return. Terex provided GECC with such a guaranty. Terex, in turn, was secretly indemnified by URI, which also promised to buy Terex’s products to improve Terex’s year-end sales. URI would disguise the indemnification payments by overpaying for Terex’s products. By arranging the transaction this way, URI would be able to immediately recognize revenue from the transaction, but in a way that violated GAAP.

The SEC brought a civil action against Apuzzo under Section 20(e) of the Exchange Act. Under Section 20(e), the SEC — but not private litigants — can bring a civil action against “aiders and abettors of securities fraud.” Any person who “knowingly provides substantial assistance to a primary violator” — the main actor(s) accused of perpetuating a securities fraud — can be liable under Section 20(e). To prove aiding and abetting liability the SEC must show: “(1) the existence of a securities law violation by the primary (as opposed to the aiding and abetting) party; (2) knowledge of this violation on the part of the aider and abettor; and (3) substantial assistance’ by the aider and abettor in the achievement of the primary violation.”

Apuzzo did not seriously challenge that he had had knowledge of the primary violation. Nevertheless, Apuzzo moved to dismiss the SEC’s civil complaint on this ground that he was not the proximate cause of the sale-leaseback scheme. In the absence of proximate cause, he argued, he could not be found to have “substantially assisted” the primary violation. The United States District Court for the District of Connecticut agreed, and granted the motion to dismiss. The SEC appealed.

The Second Circuit reversed. The Court held that the “substantial assistance” prong of Section 20(e) does not require the SEC to show proximate causation. Quoting Judge Learned Hand, the Second Circuit concluded that under Section 20(e), the SEC need only show that Apuzzo “in some sort associated himself with the venture, that the defendant participated in it as in something that he wished to bring about, and that he sought by his action to make it succeed.”

“Proximate cause,” the Court held, was “the language of private tort actions”; it did not apply to SEC actions where the purpose was “deterrence, not compensation.” Forcing the SEC to prove causation, the Second Circuit reasoned, would lead to “many if not most aiders and abettors” escaping liability because, “almost by definition, the activities of an aider and abettor are rarely the direct cause of the injury brought about by the fraud.”

Having rejected the “proximate cause” test, the Second Circuit concluded that Apuzzo had “provided substantial assistance to” URI in carrying out the fraud. Why? Apuzzo had agreed to participate in the fraudulent sale-leaseback transaction, had “negotiated the details of those transactions,” had profited from those transactions and had “approved and signed separate agreements with GECC and URI, which he knew were designed to hide URI’s continuing risks and financial obligations.”

In weighing whether this amounted to “substantial assistance” under Section 20(e), the Court concluded that Apuzzo’s high degree of knowledge of the transaction was highly relevant; “a high degree of knowledge may lessen the SEC’s burden in proving substantial assistance.” Having rejected the proximate cause analysis of the district court, the Second Circuit reversed and remanded the case for further proceedings before the district court.

Apuzzo greatly clarifies the standard for finding liability under Section 20(e) for aiders and abettors. Now, to prove the “substantial assistance” prong of 20(e), the SEC need not prove that the aider and abettor was the proximate cause of the fraudulent scheme. Instead, even if the aider and abettor’s role was incidental, the key inquiry in assessing “substantial assistance” is whether the aider and abettor “in some sort associated himself with the venture, that the defendant participated in it as in something that he wished to bring about, and that he sought by his action to make it succeed.” Courts in the Second Circuit will weigh the degree of the aider and abettor’s knowledge in making this inquiry.

For further information, please contact John Stigi at (310) 228-3717 or Martin White at (415) 774-3233.


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Saturday, October 27, 2012

EEOC briefs on line

This is pretty cool.

EEOC briefs are now on line. [Here]

They cover briefs filed in the US Circuit Courts of Appeals in which the EEOC was a party, plus amicus briefs filed in the US Circuit Courts of Appeals, District Courts, and state courts.

And there is a user-friendly search function.

Briefs filed in the US Supreme Court are not in this collection, and can be found through the US Solicitor General's collection [here].

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You're Really Denying Any Knowledge Of That?


There's this thing called "plausible deniability." "Hey, I did not know anything about that!" See if you think this gent can rely on this defense. As reported by The Guyana Chronicle:

Colin Manson, 25, of Lot 377 Turkeyen, Greater Georgetown, was remanded to prison yesterday on a drug trafficking charge.
The prosecutor said the defendant was at Ogle Airport, with an intention of going to Port Kaituma, North West District, when a bag on his back was searched by (CANU) officers and found to contain the narcotic.
Now, maybe he could argue that someone put the drugs in his backpack without his knowledge. But ...
On being taken to the CANU Head Office, another search was conducted on the defendant’s person and one more package containing the illegal substance was discovered in his crotch, the prosecutor related.
Now what do you have to say?
Manson denied having knowledge of the illegal substance.
Perhaps Mr. Manson might want to consider an alternative defense? You can read more (a little bit) here.


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Energy law firm adds eight attorneys to Denver office

Burleson has boosted its Denver office by adding eight associates, bringing the attorney count at the 14-month-old location to 31. Most of the new attorneys will focus on oil and gas matters in the Rocky Mountain region.


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Suffolk and the BITAHR Film Festival

Dean Seidman, a member of Suffolk Law's faculty and an Associate Dean, discusses the law school's support of the Boston Initiative to Advance Human Rights and its 2012 Film Festival. Learn more at and


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Absolute Novelty Worldwide - Not Always So Absolute

In this Intellectual Property webcast, Thomas McNulty and Sandra Szela Congdon of Lando & Anastasi, LLP discuss absolute novelty worldwide. Learn more about Lando & Anastasi, LLP at


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IP Intensive Industries: Part One

Professor David L. Lange, Melvin Shimm Professor of Law at Duke University Law School, joins us for our latest Intellectual Property podcast. Learn more about Professor Lange at


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You're Really Denying Any Knowledge Of That?


There's this thing called "plausible deniability." "Hey, I did not know anything about that!" See if you think this gent can rely on this defense. As reported by The Guyana Chronicle:

Colin Manson, 25, of Lot 377 Turkeyen, Greater Georgetown, was remanded to prison yesterday on a drug trafficking charge.
The prosecutor said the defendant was at Ogle Airport, with an intention of going to Port Kaituma, North West District, when a bag on his back was searched by (CANU) officers and found to contain the narcotic.
Now, maybe he could argue that someone put the drugs in his backpack without his knowledge. But ...
On being taken to the CANU Head Office, another search was conducted on the defendant’s person and one more package containing the illegal substance was discovered in his crotch, the prosecutor related.
Now what do you have to say?
Manson denied having knowledge of the illegal substance.
Perhaps Mr. Manson might want to consider an alternative defense? You can read more (a little bit) here.


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Solos, Structured Settlements, & Medicare Set Asides

Solo attorneys need to know what is happening in the structured settlement industry for a more successful practice. New Solo host, Attorney Kyle R. Guelcher, a solo practitioner looks to the experts, Ringler Associates Consultant Peter Early, and Vincent Polinsky, Director of Operations at Ringler Medicare Solutions, to explain the evolving role of the structured settlement consultant today. Hear the discussion about the advantages of a Medicare Set-Aside, and the benefits overall to your client’s settlement.


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Friday, October 26, 2012

Medicare Set Aside Arrangements and Mass Torts

On Ringler Radio, host Larry Cohen is talking about Medicare Set Asides with colleague and co-host, Lynn DeMauro Clark and guest, Attorney John "Jay" F. Kearns III from the firm Kearns & Kearns. They take a look at mass torts and the facts surrounding the US v. James J. Stricker case. In addition, Jay explores the Medicare Medicaid SCHIP Extension Act of 2007 (MMSEA) and how it has created an uproar among insurers and personal injury lawyers and talks about Stricker’s overall significance to plaintiff attorneys.


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Good Liar, Bad Liar

As noted in the New York Law Journal, the Court of Appeals, by Judge Robert Smith, granted leave in People v. Thomas, a case in which the defendant was interrogated at length and ultimately confessed to depraved indifference murder of his baby. To obtain that confession, the police lied.

The case involves a defendant who was interrogated for more than nine hours, repeatedly lied to by police and eventually made an incriminating statement that led to his conviction for the murder of his baby. Thomas told police he threw the infant on a bed several times and inadvertently banged the baby's head on a crib. He was convicted of depraved indifference murder and sentenced to 25 years to life in state prison.

On appeal, Thomas raises several issues, including an allegation that police induced him to make a false confession by telling him that his child was still alive and that doctors needed to know what had happened so they could save his life. The case is unusual in that police videotaped the entire interrogation, so the jurors and the panel that upheld the conviction were able to witness exactly what happened, a fact Smith seemed to find intriguing.

"It is not every day you get to review these sorts of things with a videotape," Smith said.

And indeed, the video matters, as it will allow the court to see for itself how lies can be used to accomplish the only goal of interrogation. 

The grant of leave comes on the heels of a Second Department decision in  People v. Aveni,a case in which the police told the defendant his girlfriend would die unless he told them what he had done to her, and that he would face homicide charges if he let that happen.  Of course, the girlfriend was already dead from the heroin he injected into her.

The concern raised by Judge Smith in Thomas was primarily the inducement of false confessions,

Much of the argument over the leave application centered on whether the trial judge, Rensselaer County Judge Andrew Ceresia, properly refused to admit the testimony of Richard Ofshe, a social psychologist and professor emeritus at the University of California at Berkeley. Ofshe, who has testified in hundreds of cases around the country and a handful in New York, was expected to testify how psychological coercion can lead someone to falsely confess to a crime.

Ceresia, after a Frye hearing (see Frye v. United States, 293 F. 1013 [1923]), held that Ofshe's theories have not gained "general acceptance in the scientific community," and refused to allow him to testify for the defense.

Egan told Smith that Ceresia's decision was discretionary, prompting Smith to ask, "How can science be discretionary?" and said it seems "crazy that the highest court in the state" should be precluded from reviewing the determination.

"There are false confessions," Smith said. "They are more frequent that you would think. But there is not much science in why they happen… Here, it does not seem ridiculous that maybe this guy was induced to produce a false confession."

Ofshe has led the scholarly fight against false confessions, and it hasn't been an easy one. Certainly, no one wants a defendant to falsely confess and be convicted, because no one can argue that this serves any legitimate end. 

The solution is to contend that no confession is false, completely vitiating the problem.  And for most jurors, this works fine, since no one who hasn't sat in a chair in a small, windowless room for 9 hours can conceive of falsely admitting to murder. 

But Judge Smith, thoughtfully, states that there is "little difference" between the two cases, one about the use of lies to overcome voluntariness and the other about the use of lies to extract a false confession, And this is crucial.  Judicial and public sympathy flows to the person who may be perceived as falsely confessing, while there is little concern about the person whose will is overcome, whose words come because of tricks designed to tease them, coerce them, compel them. 

Theoretically, a waiver of the 5th Amendment's right to remain silent must be knowing, intelligent and voluntary.  I trust that law students are still taught about the Christian Burial Speech of Brewer v. Williams, where the defendant's assertion of his right to counsel was overcome by an appeal to religious conscience.  Yet, use of techniques artfully designed to overcome a knowing, intelligent and voluntary decision by a defendant, whether the Reid Technique or manipulative lies, has not merely been deemed lawful and acceptable, but necessary in obtaining the evidence needed to convict.

But for the fear of false confessions, the revelation of DNA that innocents are convicted upon them, and the work of academics like Ofshe, the likelihood of our ever getting off the path of police using lies and manipulation to obtain confessions was slim.  And as the argument before Judge Smith demonstrated, the prosecution and police remain firm in their belief that this is all voodoo nonsense, that this tool to secure convictions is critical if we're to convict the bad guys.  Whether they admit to the existence of false confessions, they have no doubt that the benefits of obtaining confessions from the guilty by overcoming their will and constitutional rights is worth it.

Are these good lies or bad lies? Is it good that lying produces confessions from heinous criminals or bad that lying produces false confessions from people who can't withstand the psychological pressure?  As Judge Smith notes, the distinction cannot lie with the outcome, since there is no way to distinguish the innocent who falsely confessed from the guilty at the time of the interrogation.  As the court has a videotape of the Thomas confession, it won't have to rely on the cops' characterization of their interrogation, which some might think to be a somewhat unreliable description of their own possible wrongdoing.

Leave in the Thomas case sets up a potentially huge issue, an acknowledgement that while lying by police may be enormously effective, it does so by undermining constitutional rights in the process.  The same effectiveness that provides confessions by the guilty provides confessions by the innocent, and without constitutional rights to protect both, the latter will suffer along with the former. This cannot be tolerated by our system.

There is one additional quote from Judge Smith that bears noting.

At Friday's in-chambers argument, after considerable discussion on the issue, [defendant's lawyer Jerome] Frost asked Smith: "Your honor, can you tell me what a depraved indifference murder is?"

Smith replied: "No, but I can cite some cases."

Never have so few words damned the criminal justice system so well.  This is criminal law.

H/T Kathleen Casey

© 2012 Simple Justice NY LLC. This feed is for personal, non-commercial & Newstex use only. The use of this feed on any other website is a copyright violation. If this feed is not via RSS reader or Newstex, it infringes the copyright.


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LawBiz® Legal Pad On the Road!: Tips to Promote Your Services contributor Linda Popky has 10 Tips for Promoting your Services, which Ed shares with you today



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Legal Implications Surrounding the Meningitis Scare

The New England Compounding Center (NECC) shipped out tainted steroid shots to 23 states in what authorities believe resulted in a national fungal meningitis outbreak. Lawyer2Lawyer host Craig Williams chats with Attorney Michael F. Barrett, a personal injury attorney from the firm, Saltz Mongeluzzi Barrett & Bendesky, PC and Glenn Cohen, Assistant Professor of Law and Co-Director of the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School, about the litigation stemming from this meningitis scare, the role of the FDA and CDC and regulation.


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Paralegal Hiring Trends

Are you ready to search for a paralegal job? On The Paralegal Voice Kim Wierzel, Esq., a reformed litigator and Placement Director with Special Counsel, joins co-hosts Lynne DeVenny and Vicki Voisin to talk about everything you need to know regarding the paralegal job market. Their discussion includes current paralegal hiring trends, educational and certification requirements, tips for paralegals just entering the job market, and the top three areas paralegal job seekers most need to improve to be more marketable. Kim also addresses a current "hot button" issue for the paralegal profession, i.e. whether employers are seeking inexperienced new attorneys instead of experienced paralegals.


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The Legal Crusade to Save Endangered Species

The world’s tiger population has declined by 97%. The African elephant population has been cut in half. 33% of open-ocean sharks are now threatened with extinction. These and other alarming statistics have created worldwide legal action to save the Earth’s endangered species. Lawyer2Lawyer co-host and attorney J. Craig Williams explores laws and initiatives designed to save threatened species with attorney and WildAid board member, David Kracke of Nichols and Associates in Portland, Oregon.


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Update on Timeline for SEC Rulemaking to Implement the JOBS Act and Dodd-Frank Act

In recent weeks, the SEC has given notice of matters that SEC Commissioners will consider at an open meeting on August 22, 2012, including:

  • general solicitation rulemaking required by Title II of the JOBS Act
  • disclosure and reporting rules for conflict minerals and resource extraction issuers that are required under the Dodd-Frank Wall Street Reform and Consumer Protection Act

SEC Chairman Mary Schapiro also recently testified before a House Oversight and Government Reform Committee about the SEC’s progress in implementing rules and providing studies and reports to Congress required under the Jumpstart Our Business Startups (JOBS) Act.

The JOBS Act (, among other things, eases some of the regulatory burden for small businesses and startups to generate capital. Certain provisions of the JOBS Act became effectively immediately upon passage on April 5, 2012, while other provisions require additional SEC rulemaking in order to take effect.

In this blogpost, we provide a brief update on the status of implementation of the JOBS Act and the remaining corporate governance and compliance provisions of the Dodd-Frank Act.

Can I engage in general solicitation and advertising in connection with a private offering to accredited investors?

Not yet. Section 201(a) of the JOBS Act required the SEC, within 90 days of enactment of the JOBS Act, to revise the Rule 506 safe harbor from registration to allow general solicitation and general advertising for offers and sales of securities made under Rule 506, provided that all purchasers are accredited investors. The SEC was also required to revise Rule 144A, within 90 days of enactment of the JOBS Act, to provide that securities sold under Rule 144A may be offered to persons other than qualified institutional buyers (QIBs), including by means of general solicitation or advertising, provided that the securities are sold only to persons reasonably believed to be QIBs. The 90-day deadline expired on July 4, 2012, and the SEC has not yet adopted such revisions to Rule 506 or Rule 144A.

Chairman Shapiro noted in her testimony to Congress that the 90-day deadline did "not provide a realistic timeframe for the drafting of the new rule, the preparation of an accompanying economic analysis, the proper review by the Commission, and an opportunity for public input”. The SEC will consider rules to implement Section 201(a) on August 22, 2012. Typically, the SEC adopts proposed rules at the meeting at which they are considered.

What is the status of the crowdfunding provisions of the JOBS Act?

Title III of the JOBS Act provides a new exemption from the registration requirements of Section 5 of the Securities Act of 1933 for crowdfunding offerings. Crowdfunding involves the use of the internet and social media to raise capital, typically from a large number of people and in relatively small amounts per person. In May 2012, the SEC published responses to frequently asked questions related to the crowdfunding exemption which can be found here.

The JOBS Act requires the SEC to adopt crowdfunding rules within 270 days of enactment of the JOBS Act to implement the new crowdfunding exemption. Chairman Shapiro stated in her testimony to Congress that SEC staff in the Divisions of Corporations Finance and Trading and Markets are working closely together, along with the economists in the SEC's Division of Risk, Strategy, and Financial Innovation, to develop recommendations for the SEC. Chairman Shapiro did not indicate whether she expects the SEC to meet the 270-day deadline, which expires December 31, 2012.

What is the status of the JOBS Act IPO on-ramp provisions?

The IPO on-ramp provisions contained in Title I of the JOBS Act became effective immediately without SEC rulemaking. These provisions reduce regulatory burdens and disclosure requirements for qualifying “emerging growth companies” (EGCs). EGCs are companies with less than $1 billion in annual gross revenues and less than $700 million in publicly-traded shares that had their first registered sale of securities on or before December 8, 2011. For example, EGCs are allowed to “test the waters” by communicating with QIBS or institutional accredited investors prior to the sale of securities and they are allowed to submit their IPO registration statement on a confidential, non-public basis until closer to the time of the IPO "roadshow". In addition, EGCs may take advantage of scaled disclosure for both the IPO registration statement and subsequent filings required under the Securities Exchange Act of 1934 for up to 5 years following the IPO.

The SEC has taken the following steps to enhance the implementation of Title I thus far:

  • outlined procedures guiding EGCs through the draft registration submission process
  • developed a secure e-mail process for confidential nonpublic submissions of IPO registration statements
  • issued frequently asked questions regarding Title I

Is relief from the “500-shareholder” rule available yet?

Yes. Title V and Title VI of the JOBS Act amended Section 12(g) of the Securities Exchange Act of 1934 to raise the threshold for registration under the Exchange Act for companies and banks and bank holding companies from 500 securityholders of record to either 2,000 securityholders of record or 500 securityholders of record who are not accredited investors. Title V also excludes persons who received shares pursuant to employee compensatory plans in transactions exempt from registration under the Securities Act from counting against the number of holders of record. Shortly after enactment of the JOBS Act, the SEC posted guidance addressing expected questions related to Title V and Title VI. The JOBS Act requires the SEC to adopt safe harbor provisions that issuers can follow when determining whether holders of their securities received the securities pursuant to an employee compensation plan in transactions exempt from registration under the Securities Act. No deadline is given for these rules. The SEC’s posted guidance indicates that the required rulemaking does not affect the current availability of the JOBS Act amendments to Section 12(g). The SEC has not provided a target date for implementation of these regulations.

The JOBS Act also requires the SEC to report to Congress within 120 days after enactment on whether new enforcement tools are needed for the SEC to enforce the provisions of Rule 12g5-1 that disregard forms of holding securities that are used primarily to circumvent the registration provisions of Section 12(g). In her testimony to Congress, Chairman Shapiro stated that staff from the Division of Corporation Finance is working with staff from the Division of Risk, Strategy and Financial Information to review these provisions. Chairman Shapiro did not indicate whether she expects the SEC to meet the 120-day deadline, which expires August 3, 2012.

What disclosure rulemaking remains to be adopted under the Dodd-Frank Act? What is the timetable for adopting those rules? Is the required JOBS Act rulemaking taking priority of Dodd-Frank rule-making?

The SEC has yet to adopt the following disclosure rules required under the Dodd-Frank Act:  

Dodd-Frank Section


Statutory Deadline



Rules regarding disclosure of pay-for-performance and pay ratios


SEC actively working on it.  Acknowledges significant challenges given express requirements in statutory language. Prior projected timetable withdrawn.  Proposed bill in Congress to repeal Section 953.



Rules regarding recovery of executive compensation (clawbacks)



SEC actively working on it.  Prior projected timetable withdrawn.


Rules regarding disclosure of hedging by employees and directors





Rules regarding disclosure related to "conflict minerals"

April 17, 2011

SEC proposed rules on December 15, 2010.  Conducted roundtable on October 18, 2011.  Commission to consider final rules on August 22, 2012.



Rules regarding disclosure by resource extraction issuers

April 17, 2011

SEC proposed rules on December 15, 2010.  Commission to consider final rules on August 22, 2012.

At a talk given to the Society of Corporate Secretaries and Governance Professionals on July 14, 2012, Meredith Cross, Director of the SEC Division of Corporation Finance, stated that the SEC is working simultaneously on all of the required JOBS Act and Dodd-Frank Act required rules. She stated that the SEC did give priority to the Dodd-Frank provisions with statutory deadlines, but the SEC has not de-prioritized Dodd-Frank rulemaking without statutory deadlines in favor of the JOBS Act provisions with statutory deadlines. She did however indicate that capacity constraints must be expected to affect the speed at which any new rule-making can be completed.

What if you have questions?

For any questions or more information on these or any related matters, please contact any attorney in the firm’s corporate practice group. A list of such attorneys can be found by clicking Lawyers on this page.

John Tishler (858-720-8943,, Louis Lehot (650-815-2640,, Edwin Astudillo (858-720-7468,, Jason Schendel (650-815-2621,, and summer associate Irene Lu participated in drafting this posting.


This update has been prepared by Sheppard, Mullin, Richter & Hampton LLP for informational purposes only and does not constitute advertising, a solicitation, or legal advice, is not promised or guaranteed to be correct or complete and may or may not reflect the most current legal developments. Sheppard, Mullin, Richter & Hampton LLP expressly disclaims all liability in respect to actions taken or not taken based on the contents of this update.


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