October 27, 2010 Nº 973 - Vol. 8
"Do just once what others say you can't do, and you will never pay attention to their limitations again."
James R. Cook
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Read Migalhas LatinoAmérica in Spanish every Tuesday and Thursday. Visit the website at www.migalhas.com/latinoamerica
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A litigation plan that would favor delaware
Prof. Joseph A. Grundfest, a Stanford Law School professor and former commissioner of the Securities and Exchange Commission, recently delivered the Pileggi lecture in Wilmington, Del., to the Delaware corporate law bar, where he put forth his idea: Public corporations can and should adopt charter provisions to select in advance the forum where shareholder litigation would occur. If adopted, public corporations would put in place a bylaw or charter provision to provide that all shareholder litigation must take place in the state of incorporation (e.g., Delaware). The provision would be phrased in one of two ways: as a requirement that all shareholder litigation would occur in the jurisdiction of incorporation or as an option for the corporation to elect that all shareholder litigation would occur in the state of incorporation. This provision would only be effective for state law claims involving breaches of fiduciary duty and the like, not federal claims, including federal securities fraud charges. Since a majority of public companies are incorporated in Delaware, the net effect of the provision would be to channel the bulk of this litigation to that forum. This would have important implications since there is at least some evidence that plaintiffs have been drifting away from bringing suit in Delaware because of fears of adverse judgments. These provisions would be a response to claims that these shareholder plaintiffs are forum-shopping, selecting the jurisdiction most favorable to their suit. Provisions of this type have been around since at least 1991, but until this year only 16 companies had adopted a form of them.
Elections season:
Brazil's presidential rivals spar in TV debate
In four days time, Brazilians will decide who their next president will be. Presidential candidate Jose Serra has hit out at his rival for the presidency, Dilma Rousseff, attacking her party on corruption. Serra, who has held several top political jobs, including health minister and mayor of the biggest city, Sao Paulo, said: "I have 40 years of office and no scandals; a clean history of work and honesty before our people." He was speaking in the penultimate TV debate ahead of Sunday's run-off vote. Speaking in Monday's debate, Rousseff highlighted her party's strong track record on the economy. And she said her policies, "aren't focused on the GDP number or interest rates, but on people." Rousseff just fell short of winning outright in the first round earlier this month. Opinion polls give Rousseff a lead of some 10 percentage points. If elected, she would be Brazil's first female president. The final TV debate is on Friday.
US mid-term election spending nears $2bn mark
The American economy staggers on into an uncertain future. Bond traders are so worried about inflation that they are prepared to pay the Treasury in order to lend it money. The mortgage mess grinds on and banks are still reluctant to do what the taxpayer bailed them out for - lending, not stuffing mattresses. And yet the recession has ignored the campaign for the mid-terms, where there is an unprecedented amount of cash being flung around.US House and Senate candidates have surpassed fundraising records for the mid-term elections and are now nearing the $2bn (£1.2bn) spending mark, with elections just one week away. The projection by Public Campaign Action Fund, a watchdog group, breaks down to $4m for each seat at stake. With exactly one week to go before the mid-term elections, uncertainty surrounds the scope of widely anticipated Democratic losses in the House, the Senate, governor's races and state legislatures. Many Democrats hoping for a win in the 2 November elections continue to face a rough ride over the country's economic woes, for which many Republicans have criticized the president. Job losses outweigh Obama's successes and the president's approval rating has dropped significantly since taking office.
Dollar at new 15-year low against yen on G20 comments
The US dollar has hit a 15-year low against the yen after the G20 nations agreed to avoid a currency war. The meeting sparked another fall in the US dollar, which fell 1% against the yen to 80.52 yen. The dollar is being undermined in part by the view that the US will start a new round of Quantitative Easing (QE). A lower currency can help to boost a country's exports by making the goods relatively cheaper to foreign buyers. China and the US are at the centre of the story, with the US most concerned about the level of China's yuan, which does not trade freely on the currency markets. The US wants China to allow the yuan to rise to make its own goods cheaper within the country, and China's goods more expensive for US citizens. At the weekend, US Treasury Secretary Timothy Geithner said he believed China was now "committed" to allow the yuan to rise in value.
Before you open the door to the boardroom, peek through the keyhole!
Michael Page specializes in the placement of candidates in permanent, contract, temporary and interim positions within client companies around the world. Have a look at the new section of the Migalhas website and discover the professional development opportunities with large corporations, in legal and business fields, presented by Michael Page International. Click here to peep through the hole!
1 - Couples like Courteney Cox, David Arquette who try 'trial separations' are likely to end in divorce(Click here)
2 - Wikipedia's general counsel says goodbye (Click here)
3 - Obama is no 'A' student (Click here)
3 - Amphastar Pharmaceuticals sues FDA over seizure of heparin (Click here)
4 - Guide for homosexual fathers launched (Click here)
5 - New law puts an end to the present atmosphere of permissiveness and non-compliance (Click here)
6 - Deutsche Bank warned client over Citigroup investment, lawyer tells court (Click here)
7 - Law firms feel pressure from new breed of competitors (Click here)
8 - Plaintiff sues A&E for misidentifying her as murder witness (Click here)
9 - Staff cutbacks hit law firms' professional development departments (Click here)
10 - Baby Peter 'was failed by all agencies' (Click here)
11 - US prosecutor admits Chandra Levy murder mistakes (Click here)
12 - Youngest Guantanamo detainee pleads guilty (Click here)
13 - Mexico currency laws make it tougher to pay in dollars (Click here)
14 - NJ proposes strict anti-bullying bill of rights (Click here)
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MiMIC Journal
In China, looking for Mr. right (enough)
Just underneath China's modern, shiny surface, many aspects of life are still very traditional. Marriage is one of those areas. And women, in particular, and their parents fret about not finding a suitable partner before they grow too old and become a "leftover woman."
Chinese top legislator highlights law enforcement to build resource-saving country
China's top legislator Wu Bangguo has highlighted a nationwide inspection of enforcement of the country's Law on Energy-saving to build a resource-efficient and environment-friendly society.
Uncontrolled' dollar printing poses China inflation threat
The U.S. Federal Reserve's "uncontrolled" issuance of dollars is adding to inflation risks in China and creating difficulties for the nation's businesses, Chinese Commerce Minister Chen Deming said. U.S. policies "and continued increases in commodity prices are bringing China the shock of imported inflation." He referred to "uncertainties" and "difficulties" for Chinese firms.
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Inversiones
El gobierno uruguayo impulsa una reforma legal para habilitar inversiones privadas en áreas públicas, lo que incluye la adecuación de la infraestructura de transporte, grandes obras del Estado, cárceles de seguridad e incluso hospitales y locales de salud pública y centros educativos.
Expropiación
Con la expropiación de las 2 plantas de la estadounidense Owens Illinois en Venezuela, el Estado manejará más de 60% del mercado de procesamiento y suministro de botellas y envases de vidrio a empresas como Pepsi Cola, Coca Cola, Heinz, Nestlé, Gerber, Kraft, Ron Santa Teresa, Pfizer y Brahma. En tanto autoridades de EE.UU. dijeron que esperan que la empresa tenga una justa compensación.
Legalizaciones
Cumbre de Jefes de Estado y de Gobierno del Mecanismo de Diálogo y Concertación de Tuxtla en esa ciudad acordó su oposición a la legalización de las drogas y de la marihuana. Cuando en el país del norte, expresamente en el Estado de California se prepara una consulta publica para normar el consumo de hierba.
UN urges US and Iraq to probe Wikileaks torture claims
The US and Iraq should investigate claims of abuse contained in files published on the Wikileaks website, the UN's rights chief says. Navi Pillay said the files suggested US forces had continued to hand detainees to Iraqi authorities despite evidence that they had been tortured. Meanwhile, the UN's adviser on torture, Manfred Novak, called for a wider inquiry to include alleged US abuses. The US military has denied turning a blind eye to torture in Iraq.
SpaceOpal named as Galileo European sat-nav operator
The contract to operate the satellites that will form Europe's version of GPS has been awarded to SpaceOpal. SpaceOpal signed the contract with the European Space Agency, which is acting as technical and procurement agent on the sat-nav project for the European Commission. The multi-billion euro programme is over budget and much delayed, but the first spacecraft to prove the system should finally launch next year. Galileo should have been operational by now but the project has run into myriad technical, commercial and political obstacles, including early objections from the US, who thought a rival system to GPS might be used to attack its armed forces. The venture came very close to being abandoned in 2007 when the public-private partnership put in place to build and run the project collapsed. To keep Galileo alive, EU member-states had to agree to fund the entire project from the public purse. What should have cost European taxpayers no more than 1.8bn euros will now probably cost them in excess of 5bn euros ($7 bn).
German report reveals war-time diplomats' 'Nazi role'
Germany's diplomats were more deeply involved in the Holocaust than previously known, according to an official German government report. The government is considering making the 900-page text mandatory reading for all its diplomats. The report was commissioned in 2005 after it emerged that flattering obituaries of war-time diplomats were being published internally. The report challenges the idea diplomats were far from the Holocaust. A myth seemed to have grown up within the post-war foreign ministry that German war-time diplomats were not involved in the mass murder and even opposed it. The report, commissioned by the foreign ministry, says diplomats were willing participants who spied on Jewish fugitives from the Nazis.
So what is insider trading?
Have you heard about the railroad workers charged with insider trading? Late last month, the Securities and Exchange Commission brought an unusual and colorful insider-trading case: It accused two employees who worked in the rail yard of Florida East Coast Industries and their relatives of making more than $1 million by trading on inside information about the takeover of the company. How did these employees — a mechanical engineer and a trainman — know their company was on the block? Well, they were very observant. They noticed "there were an unusual number of daytime tours" of the rail yard, with "people dressed in business attire." The case is raising eyebrows — and some important questions — about what constitutes insider trading at a time when the government is taking a tougher line against Wall Street and white-collar crime. And it comes amid a spate of prominent insider trading cases, like a controversial one against Mark Cuban, the billionaire owner of the Dallas Mavericks, which was dismissed and then recently reinstated. That case may just be a preview of what is to come: "Illegal insider trading is rampant and may even be on the rise," Preet Bharara, the United States attorney in Manhattan, said in a speech last week. And it is no longer just about prosecuting Gordon Gekkos. "The people cheating the system include bad actors not only at Wall Street firms, but also at Main Street companies." Many of the recent cases have one thing in common: an increasingly broad definition of what insider trading actually means.
So, given the ever expanding definition of insider trading, what exactly does inside information mean? It may come as a surprise to know that there is no actual language that defines the term in the legal books. The S.E.C. relies on Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, purposely vague provisions that make the purchase or sale of any security through "manipulative and deceptive devices" illegal. It is also a crime to engage "in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person." If all of this sounds confusing, that's because it is. And that's why some argue that the S.E.C. should draw some bright lines around what insider trading is — and what it is not. In an age when information zips across the planet and sophisticated investors piece it all together, the public and investors deserve clear rules. A safe maxim might be: "If you have to ask if it's right or wrong, it's probably wrong." So back to the case of the railroad workers. Gary Griffiths and Cliff Steffes, who worked in the Bowden Rail Yard in Jacksonville, Fla., clearly had a hunch something was up even though they were never brought into the loop through official channels. The men, and members of their family, bet that a deal was in the works by buying tens of thousands of dollars of call options on the rail company's shares. When Fortress Investment Group acquired the company in May 2007, the men and their families made more than $1 million.
The S.E.C. claims that Griffiths and Steffes acted on more than a hunch. The commission says that "shortly after the tours began, a number of F.E.C.R.'s rail yard employees began expressing concerns that F.E.C.R. was being sold, and that their jobs could be affected by any such sale." The S.E.C. also claims that Mr. Griffiths was asked by the company's chief financial officer for a "list of all of the locomotives, freight cars, trailers and containers owned by F.E.C.R., along with their corresponding valuations, which she had never requested before." Florida East Coast Railway, or F.E.C.R., was a wholly owned subsidiary of Florida East Coast Industries. Is all of that material information? Clearly, it is all nonpublic. But without being told directly that a deal was in the works, did the men actually have inside information? What would have happened if there had been no deal? Or if the company was later sold for a price below its prevailing stock market value? In most instances, "if you overhear something and divine from the conversation that Party A is about to buy Party B, and you buy Party B, that's fine. You can do that."
In the case of Griffiths and Steffes, things get a bit more complicated. A lawyer for Mr. Griffiths said his client had done nothing wrong. Steffes's lawyer could not be reached. But they both signed the company's code of conduct, which explicitly said they could not trade on or disseminate material nonpublic information. So it is possible they breached their fiduciary duty. And they clearly were sophisticated enough to buy options contracts to carry out their plan. (One of the family members settled with the S.E.C., so it is always possible more damning evidence will emerge.) Or, of course, maybe they were just observant?
Pope urges migrants to integrate
Pope Benedict calls on immigrants to respect the laws of host countries, in remarks likely to add to the European debate on integration.
In information age, leaks are here to stay
But indiscriminate leaks can violate privacy, jeopardize security and produce little of value.
BA chairman attacks US airport security checks
The chairman of British Airways has said some "completely redundant" airport security checks should be scrapped and the UK should stop "kowtowing" to US security demands. Practices such as forcing passengers to take off their shoes should be abandoned, Martin Broughton said. And he questioned why laptop computers needed to be screened separately. He also criticized the US for imposing increased checks on US-bound flights but not on its own domestic services. Speaking at the UK Airport Operators' Association annual conference, Broughton said that no-one wanted weaker security.
Tariq Aziz, Iraqi ex-minister, sentenced to death
Tariq Aziz, for many years the international face of Iraq under Saddam Hussein, has been sentenced to death by the Iraqi Supreme Court. He was convicted in connection with the persecution of religious parties. Aziz, 74, served as foreign minister and deputy prime minister and was a close adviser to Saddam Hussein. He has been previously convicted for his role in the execution of dozens of merchants for profiteering.
Hi-tech criminals target Vietnam
The net domain reserved for Vietnam has become a haven of cyber crime, suggests research. About 58% of the sites using Vietnam's .vn domain harbored malware found the McAfee report. Those visiting the dangerous sites risk having sensitive data stolen or their computer being hijacked.
New EU hedge fund rules agreed in final form
The European Union has agreed on the final form of a set of rules designed to provide tighter regulation of hedge funds and private equity firms. The rules aim to increase transparency among alternative investment funds, and help regulators identify and respond to potentially systemic risk.
Cuba sets out rules and taxes for self-employed workers
The Cuban authorities have set out in detail new rules and taxes for the self-employed and small businesses as they move to overhaul the economy. Taxes will range from 25% for incomes more than 5,000 pesos (about $225) a year to 50% for those earning more than 50,000 pesos (about $2,300). Many self-employed business people will be allowed to hire workers. The changes come as the government prepares to cut half a million state jobs by March next year.
Glaxo paying $750 million in drug quality case
The company pleaded guilty to federal criminal charges and agreed to a civil settlement over the sale of substandard medicines to government health programs. Quality problems at a factory in Puerto Rico lay at the root of the case.
FBI's GPS tracker raises privacy concerns
When Yasir Afifi took his car in for an oil change, his mechanic found an unusual wire hanging from below. It turns out it was part of a GPS tracking device. And after Afifi posted photos of it online, the FBI came to get it back. Civil rights groups say using GPS to track people is going too far.
Somalia again ranked most corrupt country in annual survey
Somalia was once again ranked the most corrupt country by Transparency International (TI) in its 2010 Corruption Perception Index (CPI) released Tuesday. The CPI measures the abuse of entrusted power for private gain in both the public and private spheres. Countries are ranked from 10 (very clean) to 0 (highly corrupt) based on survey information collected by independent agencies concerning bribery of public officials, kickbacks in public procurement, embezzlement of public funds and the effectiveness of any anti-corruption campaign at work in country. Somalia ranked at the bottom of the list of 178 countries surveyed for the third year in a row with a score of 1.1, based on the recommendations of country-specialists and business leaders who reviewed Somalia's data. Afghanistan, Myanmar and Iraq joined Somalia at the bottom of the list. TI chair expressed concerns that countries that have faced the most instability and conflict continue to dominate the bottom rung of the index. Despite the call for greater efforts, there have been improvements since the 2009 CPI report, including in the countries of Bhutan, Chile, Ecuador, FYR Macedonia, Gambia, Haiti, Jamaica, Kuwait and Qatar. Most notably, Haiti has made a statistically significant jump from 1.8 to 2.2, continuing a steady climb since 2008. However, Czech Republic, Greece, Hungary, Italy, Madagascar and Niger have made drops that, are potentially attributable to the financial crisis that has prevented countries from strictly enforcing their anti-corruption measures.
Federal court overturns part of Arizona voting ID law
A federal appeals court has ruled against an Arizona law that requires residents to prove their U.S. citizenship to register to vote, but upheld a part of the same law that mandates residents to show identification before voting. The decision made by the Ninth Circuit Court of Appeals in San Francisco on Tuesday was part of an ongoing court battle surrounding Arizona's Proposition 200. Arizona passed the law in 2004, prompting legal challenges. A judge has already blocked parts of that law such as a controversial provision that instructed police to ask people about their immigration status.
ICC urges Kenya to arrest al-Bashir
The International Criminal Court (ICC) requested Monday that Kenya arrest Sudanese President Omar al-Bashir when he visits the country later this week. Al-Bashir faces seven counts of war crimes and crimes against humanity as well as three charges of genocide in relation to the Darfur conflict. The chamber's decision comes after notification that al-Bashir might be in Kenya later this week for an Intergovernmental Authority for Development (IGAD) summit. The ICC's instruction to Kenya is for al-Bashir to be arrested and surrendered to the court in fulfillment of its obligations under the Rome Statute.
California Supreme Court upholds dismissal of criminal cases over judge shortage
The California Supreme Court on Monday upheld the dismissal of 18 criminal cases in Riverside County because there were not enough judges available to hear the cases. The Superior Court of Riverside County, a California state trial court, has been heavily burdened with criminal cases in recent years, with nearly 25 percent of jail inmates awaiting trial for over a year, and as many as 32 inmates awaiting trial for more than four years. During the criminal proceedings at issue, the lower court diverted many of its resources, including judges and courtrooms, to the criminal case docket at the expense of pending civil trials, but the reallocation of resources failed to reduce the criminal caseload. After the defendants were told that no courts or judges were available for each of their scheduled trial dates, the defendants moved to dismiss pursuant to Section 1382 of the California Penal Code, California's speedy trial statute. The statute requires that felony cases be brought to trial within 60 days of arraignment.
Panel formed on Lebanon poll law
Saudi Gazette, English-language daily, Riyadh, Saudi Arabia
UK trial for sobriety scheme urged
Daily Express, Conservative tabloid, London, England
ZTE signs purchase agreements with US vendors for USD 3 bln
DMeurope, Online news portal, Amsterdam, Netherlands
Wikileaks: MoD releases details of attacks on Afghan civilians
The Telegraph, Conservative daily, London, England
On CBI's plea, SC reopens Bhopal gas leak case
India Express, News portal, Mumbai, India
Sodomy II: Court to decide if initial medical report should be produced
Malaysian Star, Online news portal, Selangor Darul Ehsan, Malaysia
Arizona executes killer after stay lifted
New Zealand Herald, Conservative daily, Auckland, New Zealand
New Tajik embassy inaugurated
Pajhwok Afghan News, (Independent news agency), Kabul, Afghanistan
Indonesian VP urges for priority on tsunami refugees
People's Daily Online, English-language, Beijing, China
Natural disaster turns into class reunion
Taiwan Today, Government Information Office, Taipei, Taiwan
More than a third of young Brits don't feel part of their community
Thaindian News, Bangkok, Thailand
Centre not for filing charges against Arundhati Roy, Geelani
The Hindu, Left-leaning daily, Chennai, India
After downplay, Dominican official calls corruption "dramatized"
Dominican Today, Independent daily, Santo Domingo, Dominican Republic
Cubans Queue Up for Copies of New Self-Employment Rules
IPS Latin America, International cooperative of journalists, Rome, Italy
U.S. Republicans will be salivating at Khadr testimony
The Globe and Mail, Centrist daily, Toronto, Canada
Ford won't touch streetcars
Toronto Star, Toronto, Ontario
Guinea run-off poll date proposed
BBC News, Centrist newscaster, London, England
Ghana needs 500 years to equal South Korea's economy...
GhanaWeb, Online news portal, Amsterdam, Netherlands
Armed gang steal rhino horns
News24.com, Online news portal, Cape Town, South Africa
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