Posts Tagged ‘ExecutiveRisk’

New risks involved in Title III changes to JOBS Act

November 12, 2015 Leave a comment

wall_street_fineThe 2012 Jumpstart Our Business Startups (JOBS) Act was passed in order to provide startups access to cost-effective investor capital by easing various securities regulations. This was the first step in enabling ordinary investors to participate in equity-based crowdfunding. The second step, Title III, was approved on October 30th by the SEC, but will not take effect until 180 days after they are published in the Federal Registrar.

Current SEC rules permit only accredited investors to participate in crowdfunding. An accredited investor is someone who earns greater than $200,000 per year, or whose net worth is over $1 million without taking into account their place of residence. Read more…

Cooperation from companies is crucial in reducing burden of criminal investigation

flag_scale_gavelAccording to a spokeswoman from the criminal division of the U.S. Department of Justice, a company’s willingness to investigate its own possible wrongdoing and to identify those responsible, counts tremendously in the agency’s prosecutorial decisions. Assistant Attorney General Leslie Caldwell told the Program on Corporate Compliance and Enforcement at New York University’s Law School that cooperation can, “significantly affect the length of the investigation and the costs incurred by the company. To receive cooperation credit, we expect companies to conduct appropriately tailored investigations designed to root out misconduct, identify wrongdoers and provide all available facts.” Read more…

Kidnap and ransom policies become necessary as demand figures cracks $1 billion mark

kidnap_ransomCrimes that involve kidnap and ransom have become a lucrative and prosperous practice with the rise of the Islamic State in the Middle East, and piracy in the Gulf of Guinea off the west coast of Africa. The scale of for these crimes can be massive, with media reports estimating global ransom demand figures above $1 billion per year. Crisis response firm Olive Group estimates that there are about 100,000 kidnappings every year, 40 percent of which involve a ransom demand.

Experts claim that most kidnappings go unreported because victims and their families fear retribution, or have been warned not to do so by the authorities or company responsible for securing the release. Chuck Regini, director of global response at crisis response company Unity Resources Group, states that approximately one in 10 kidnappings actually gets reported. He also warned that there has been a noticeable increase in the number of incidents over the past 10 years. In particular, he has seen a rise in kidnappings of foreigners working overseas this year across all business sectors and socioeconomic groups. As a result of this spike, premiums written in this area have risen, and at least 75 percent of Fortune 500 companies now hold Kidnap & Ransom (K&R) policies according to industry estimates. Read more…

Newman case continues to blur line of what is and is not insider trading

April 23, 2015 Leave a comment

The landmark December 2014 ruling in United States v. Newman by the United States Court of Appeals for the Second Circuit overturned the convictions of two hedge fund traders, Todd Newman and Anthony Chiasson. In early April, the Second Circuit denied reconsidering their ruling as requested by United States Attorney Preet Bharara. The government must now decide whether to appeal to the Supreme Court, and if they should depend on Congress adopting legislation for the first time that clearly provides a statutory definition of illegal insider trading.

These latest developments in the Newman case make it much more difficult for the government to prosecute individuals accused of insider trading. Prosecutors must now demonstrate that the defendant(s) alleged to have traded on confidential information leaked by a corporate insider: Read more…

DOL looking to redefine term “fiduciary” – what that means for employer responsibilities

Vicarious-Liability-employment-contract-426x272Am I a fiduciary? I never like to answer a question with a question but do you make decisions for the 401(k) plan on behalf of the company? If you answered yes then you are in fact a plan fiduciary. There is no hotter topic in the 401(k) industry than the Department of Labor’s effort to redefine the term “fiduciary.” Yet with all the buzz surrounding the DOL’s proposal, many employers who offer a retirement plan are not aware of their fiduciary responsibilities and the liability that comes along with making 401(k) plan level decisions.

What is a fiduciary and who established the rules? Fiduciary responsibilities were instituted by the Employee Retirement Income Security Act of 1974 (ERISA) and are monitored by DOL. To ensure that fiduciaries are doing what is best for their employees and satisfying the DOL requirements ERISA has implemented standards of conduct, including:

5 reasons your private company should consider D&O insurance

5_D&OPrivate company leaders should not make the mistake in thinking they are protected from personal lawsuits simply because their company is not publicly traded. According to Chubb’s Private Company Risk Survey, 27% of private companies experienced a D&O lawsuit over the previous decade, compared to 33% of public companies. And in 2013, the cost of a lawsuit against a director or officer of a private company was an average of nearly $700,000. Despite such risks as costly lawsuits, government fines, and more, a large percentage of company leaders are not taking steps to protect themselves. So, before you write it off entirely, keep these 5 factors in mind.

  1. The threat of lawsuits
    Private companies are statistically less likely to be sued in comparison to public companies, but a few instances stand out:

    • Creditor suits. If your private company were to go bankrupt, there is a chance creditors could sue. D&O insurance would protect the personal assets of company leadership from these creditor lawsuits.

    Read more…

Prioritize cybersecurity – liabilities could fall to D&Os

March 20, 2015 Leave a comment


On Tuesday, Premera Blue Cross announced the health insurer fell victim to a security breach that exposed medical and financial information of 11 million customers – the most devastating cyber-attack in the health care industry to date. If this latest breach tells us anything, it’s that the necessity for cyber coverage has never been more essential. A recent study from the Ponemon Institute found that 43 percent of companies have suffered a data breach in the past year. Yet despite these numbers, a whopping 70 percent of security professionals consider their organizations safe from cyber-attacks, according to a separate survey published this week. These findings suggest not only a false sense of security among IT departments, but that many directors and officers may not realize their obligations related to cybersecurity.
Read more…