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ABA Business Law Section
Newsletter of the ABA Business Law Section
  Corporate Counsel Committee
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Message from the Leadership

Featured Articles
  Cyber Alert: International Data Breach Investigations in a Post-Snowden World - Evolving Legal Obligations and Investigatory Challenges
  Message from New York Court: Rely on CGL Policy Coverage for Data Breaches at Your Own Peril
  Parent FCPA Violations Based on Subsidiary Misconduct
  Employment Law Tips for Businesses in California
  Just in Time for Proxy Season, SEC Provides New Guidance on Shareholder Proposal "Unbundling"
 
Judith Kim
    eNewsletter Co-Editor
    713-360-4073

Faisal Zubairi
    eNewsletter Co-Editor
    714-800-1461

Michelle Wong
    eNewsletter Co-Editor
    416-981-4236

  Message from the Leadership
 
Judy Kim, Co-Chair Judy Kim,
Co-Chair
Cara Bradley, Co-Chair Cara Bradley, Co-Chair

Welcome to sunny Los Angeles for the 2014 Business Law Section Spring Meeting! We look forward to meeting new attendees as well as our regular attendees. Be sure to support our Committee and attend our two ethics CLE programs: 1) The Ethics of Internal Anticorruption Investigations for Corporate Counsel, Thursday, April 10 at 2:30 pm and 2) The Ethics Behind an Ethical Business Culture: What to Do When Your Clients Reject Your Advice? Saturday, April 12 at 2:30 pm. Our Committee Meeting will be held on Friday, April 12 at 9:30 to 10:30 am PST. Dial-in information is as follows:

Toll-free dial-in number (US & Canada): (866) 646-6488;
International dial-in number: (707) 287-9583; Conference code: 5170670679

Our Corporate Counsel Toolkit Meeting, 2nd edition, Meeting will be held on Friday, April 12 at 4:30 pm. Dial-in information is as follows: (866) 646-6488; International dial-in number: (707) 287-9583; Conference code: 2527406387

Other Committee co-sponsored CLE programs include the following:

The Essential Components of a Successful Corporate Dispute Resolution Program, and How to Ensure an Efficient Arbitration Process Using the AAA's New Commercial Rules, sponsored by the Dispute Resolution Committee, Thursday, April 10 from 8:00AM - 10:00AM

The Court of Public Opinion: Best Practices for Attorneys in High Profile and Crisis Situations, sponsored by the Middle Market and Small Business Committee. Thursday, April 10, 2014 from 8:00 - 10:00 AM

Cybersecurity and Data Breaches in Health Law Facilities: Crisis Management for GC's and Outside Counsel, sponsored by the Health Law and Life Sciences Committee. Thursday, April 10, 2014 from 10:30 AM - 12:30 PM

Risks and Opportunities with New Uses of Health Care Data and Personal Information, sponsored by the Health Law and Life Sciences Committee. Friday April 11, 2014 from 10:30 AM - 12:30 PM

Calling All Deal Lawyers: Use Your Skills to Help Prevent and Resolve Disputes!, sponsored by the Dispute Resolution Committee, Friday, April 11 from 10:30AM - 12:30PM

If you are in L.A. Thursday, April 10, please consider joining us for the Committee Dinner graciously underwritten by the law firm of Dorsey & Whitney-thank you! The Dinner is being co-sponsored by the Corporate Counsel Committee, the Cyberspace Committee, the Health Law and Life Sciences Committee, IP Committee and the White Collar Committee. We are venturing to nearby Koreatown, just west of downtown L.A. and less than 3 miles away, at one of the most highly regarded Korean barbecue restaurants in town, Park's BBQ, beginning at 7:30 pm and only $40. As you may be aware, metropolitan L.A. is home to the largest ethnic Korean population outside of Korea and its Koreatown is the largest outside of East Asia.

If you have any suggestions for upcoming CLE programs at the first Business Law Section Annual Meeting, September 11-13 in downtown Chicago, please let me know. We are always happy to hear from our Committee members, even if you aren't able to attend the ABA meetings in person.

Even if you are unable to travel to L.A., please consider volunteering for our second edition of the Corporate Counsel Toolkit, a handy digital guide for those who are taking on broader corporate in-house roles. We are excited about the upcoming edition, to be published later this year. If you are interested in volunteering, please contact the Corporate Counsel Committee co-chairs: Cara Bradley, cara.bradley@xyleminc.com or myself, judy.kim@dynegy.com.

Thank you as always for your support of our Committee.

Judy Kim, Dynegy Inc.
Co-Chair, Corporate Counsel Committee
Business Law Section of the American Bar Association


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  Featured Articles
 
Cyber Alert: International Data Breach Investigations in a Post-Snowden World - Evolving Legal Obligations and Investigatory Challenges
By: Kimberly Peretti, Kelley Barnaby and E.J. Hilbert

Cybersecurity incidents for global companies increasingly affect servers, employees, customers and business operations outside of the United States. As criminals continue to deepen and expand access to systems in their victims' environments, aided by ever-increasingly sophisticated malware allowing remote access, they are not restricted by geographical borders. The seamless connection of company networks and systems from locations across the globe, coupled with hackers' pernicious penetrations, often results in security incidents that affect servers in multiple jurisdictions-and, most notably, the information on those servers, which can include sensitive or regulated data. This global nature of the compromise impacts not only the process by which the forensic investigation of the incident is conducted and the information is collected, transferred and analyzed, but also may trigger an ever-growing list of foreign laws, guidance and recommendations that require notifications to regulators and individuals outside the United States.

More...

Message from New York Court: Rely on CGL Policy Coverage for Data Breaches at Your Own Peril
By: Robert Cattanach, Katie Pfeifer and Kate Santon

A New York trial court announced a decision on February 21, 2014, that may be a harbinger of wide-reaching limitations on insurance coverage for data breaches under commercial general liability (CGL) policies. The court's ruling, while subject to appeal, demonstrates the hazards of relying on traditional CGL policies for coverage for data breaches.

The lawsuit, Zurich American Insurance Co. v. Sony Corporation of America, arose out of the April 2011 data breach of Sony's PlayStation Network, in which hackers stole personally-identifiably information belonging to 77 million users. Sony's losses are estimated to be as high as $2 billion. Sony sought both defense and indemnification from Zurich, one of its CGL insurers, for the more than 50 class action lawsuits brought against it by its customers. Zurich denied coverage and brought a declaratory judgment action, arguing the data breach claims are not covered claims.

More...

Parent FCPA Violations Based on Subsidiary Misconduct
By: Greg Williams and Richard W. Smith

The $384 million in penalties, forfeitures and disgorgement in Alcoa, Inc.'s ("Alcoa") recent Foreign Corrupt Practices Act ("FCPA") settlement ranks as the fifth largest FCPA case to date. The most significant feature of the settlement, however, is not its size, but the theory of parent liability it reflects. In the Alcoa action, the government openly embraces a prosecution theory of (virtually) strict parent liability that has run as an undercurrent in certain other recent enforcement actions. Alcoa's liability stemmed from the improper payments of the company's far-flung foreign subsidiaries. The government did not allege that Alcoa knew of, or participated in, these payments. Rather, the Security and Exchange Commission's ("SEC") cease-and-desist order states explicitly: "This Order contains no findings that an officer, director or employee of Alcoa knowingly engaged in the bribe scheme." In the absence of such findings, the SEC based Alcoa's liability on expansive "agency" principles that, if adopted more broadly, could render virtually any subsidiary the "agent" of its parent.

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Employment Law Tips for Businesses in California
By: Arthur F. Silbergeld

Personnel administration is one of the most highly-regulated day-to-day functions of any business. California employment laws are complex and often vary significantly from federal law or concern issues not addressed by federal statutes. Key examples below provide a checklist for personnel policies and practices compliance that should be followed in that California law.

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Just in Time for Proxy Season, SEC Provides New Guidance on Shareholder Proposal "Unbundling"
By: Jeffery Bell, Enrico Granata and Isaac Raskin Young

The U.S. Securities and Exchange Commission (SEC) staff recently issued several Compliance and Disclosure Interpretations (C&DIs) providing guidance as to when it is permissible under Rule 14a-4(a)(3) (and its companion rule, Rule 14a-4(b)(1)) under the Securities Exchange Act of 1934 (the "Exchange Act") to group multiple matters in a single proposal to be voted on by shareholders. These C&DIs provide an opportunity to review the Exchange Act rules regarding "bundling" of matters, and to discuss the practical implications of Rule 14a-4(a)(3) for companies and shareholders crafting proposals for shareholder votes to be included in proxy materials for the upcoming proxy season.

More...

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