The process of the criminal trial of the youngest woman self-made billionaire, has recently started up again after being stalled due to Covid restrictions in the past year. Former CEO and founder of Theranos, Elizabeth Holmes, and her former president and one-time boyfriend, Ramesh Balwani, have been accused of misleading investors and raising hundreds of millions of dollars by making false or exaggerated claims in defiance of the anti-fraud provisions of federal securities laws. While she is currently facing a federal indictment on twelve different charges, including two counts of conspiracy to commit wire fraud and ten counts of wire fraud, Holmes has already settled her civil charges, which were brought forth by the Securities Exchange Commission (SEC). The civil charges brought forth by the SEC have now put Silicon Valley on alert by ensuring that technology companies who claim that they have a new groundbreaking technology that can change the world must be based on factual evidence, not purely myths.
In the age of online consumerism, many companies utilize automatic renewal programs to deliver their products and services to customers on a recurring basis for a monthly or annual charge. Recently, autorenewal programs have seen an increase in consumer protection through legislation at both the state and federal level along with enforcement actions brought by private plaintiffs, state attorney generals, and the Federal Trade Commission (“FTC”). Organizations that utilize automatic renewal should be aware of the uptick in autorenewal program enforcement and look to strengthen and update their policies where appropriate.
Proxy access is not about giving shareholder’s rights, it is about checking C-suite power so that everyone wins instead of just the CEOs. Proxy access has the potential to address some of the pressing issues with corporate power. Corporate power and influence are concentrated in the board of directors, proxy access gives shareholders the opportunity to infiltrate this exclusive “inner circle” of power. Shareholder access to the board can push change towards greater diversity in the boardroom and demand greater transparency and compliance.
Most major American corporations develop and implement an ethics and compliance (E&C) program. However, too often, the ethics division of these programs falls to the wayside, with companies putting more focus on legal compliance rather than creating an ethical corporate culture. While it is true that compliance can technically function without an ethics component, a robust ethics program can be an extremely efficient way for a company to promote legal compliance, as well as consumer trust and loyalty.
Following the 2016 Wells Fargo scandal in which the bank opened millions of unauthorized bank and credit card accounts to collect fees, federal regulators have worked to address and respond to the corporation’s illegal conduct. On February 2nd, 2018, the U.S. Federal Reserve imposed unprecedented restrictions against Wells Fargo & Co. when it capped the bank’s growth for 2018 such that it could not exceed the total assets owned at the end of 2017. This restriction marks a substantial departure from previous penalties issued for improper compliance. Changes in policies and procedures and this novel punishment reflect a notable shift in the national bank’s expectations of corporate directors.