The point of this post is to suggest that mass tort lawyers for publicly traded entities need to keep at least a watchful eye on the gist of the papers being filed before Judge Rakoff in New York regarding the settlement between Bank of America and the SEC with respect to disclosure of future bonuses. Why? For one, the filings illustrate the increasing focus on lawyers and law firms in connection with alleged or actual corporate misdeeds. For another, the papers suggest issues regarding whether it is appropriate to put disclosures in non-public schedules to m & a agreements. No doubt the plaintiff’s bar for securities cases is loving the proceedings. This post from Susan Beck at AmLaw provides a nice tight summary of the new filings. The following paragraph from her story illustrates the basic issues:
“In this most recent filing, the SEC continued to dodge the question of who was responsible for the disclosure decision and refused to identify anyone at fault at BofA. But it had no problem heaping blame on Wachtell. The agency brandished excerpts from two publications by Wachtell partners informing clients about a 2005 SEC report in which the agency stated that companies should not hide certain material information in nonpublic “disclosure schedules.” BofA had previously argued in court filings that this practice is common in the M&A world.”