| Interlocking Directorates |
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| Section 8 of the Clayton Act, 15 U.S.C.S. § 19, prohibits corporations from having the same directors or officers in some instances. Thus, under Section 8, a person may not serve as an officer or director of two non-bank corporations if one of the companies has more than $10 million (adjusted for annual GDP changes) in capital, surplus, and undivided profits and the companies compete so that an agreement between them would eliminate that competition and result in a violation of an antitrust law. An example of a violation of an antitrust law which Section 8 of the Clayton Act is designed to prevent is an agreement between two or more competitors on the prices they charge, which would be a per se illegal agreement under Section 1 of the Sherman Act, 15 U.S.C.S. § 1.More... |
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| Sarbanes-Oxley Act |
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The Sarbanes-Oxley Act of 2002 (Act) covers corporations and other business organizations that are required to register securities and file reports pursuant to federal securities laws. Under Section 307 of the Act, Congress directed the Securities and Exchange Commission (SEC) to issue rules that would establish minimum standards of professional conduct for attorneys who appear and practice before the SEC. Specifically, the SEC was instructed to develop and implement rules that required attorneys "to report evidence of a material violation of securities law or breach of a fiduciary duty or similar violation by the company or any agent thereof, to the chief legal counsel or the chief executive officer of the company (or the equivalent thereof)." Additionally, the SEC was instructed to devise reporting procedures. The SEC issued a proposed rule to govern attorney professional conduct and ultimately adopted this final rule (with certain changes), which went into effect in 2003. The rule is now part of the Code of Federal Regulations and has the force of federal law.
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| Premerger Second Requests for Information |
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| Parties to mergers or acquisitions involving sales or assets of $100 million or meeting other threshold levels must report their planned merger or acquisition to the Department of Justice or the Federal Trade Commission and wait for 30 days (15 days in the case of a cash tender offer or a bankruptcy sale) following the report before completing the transaction. That waiting period allows the Department or the Commission time to review the transaction for its potential effect on competition before deciding what enforcement action, if any, will be taken.More... |
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| Mediation of Securities Disputes |
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| Broker-dealer members of the National Association of Securities Dealers are required to arbitrate their disputes with investors. Also, the agreement signed by investors to trade through broker-dealers normally contains a provision requiring the investors to arbitrate their disputes with the broker-dealers rather than litigate such disputes. However, mediation is an additional method for resolving disputes that may be used prior to or in addition to mediation. More... |
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| Duty of Loyalty |
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| The duty of loyalty requires a director to have undivided allegiance to corporate interests and to place the best interests of the corporation and its collective shareholders above any personal or self-interest that the director may possess. A conflict of interest arises when the director attempts to individually participate in a transaction in which the corporation could have participated. Courts have adopted different tests for determining when a corporate opportunity exists.
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