In an apparent first among state AGs, New York's Eliot Spitzer is pressing companies to stop paying the legal fees of employees facing criminal charges. Most of Spitzer's targets are financial institutions swept up in his probe of mutual funds. Corporate Counsel's review of 17 agreements that Spitzer's office struck with companies accused of market timing shows that nine included "no indemnification" clauses, which ban payment of indicted employees' legal fees unless required under company bylaws.
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New York AG Presses Companies to Stop Paying Indicted Employees' Legal Bills
Corporate Counsel
November 2, 2006
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