Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.
“The existence of an ongoing formal SEC investigation is a significant factor in settlement discussions with plaintiffs,” said Stone.
Defense lawyers also say the no-action letters are extremely welcome because in the past the government agency would often end investigations without letting the company in question know.
“I’m aware that the SEC made a policy decision to issue ‘no-action’ letters — I think it’s appropriate and welcome,” said Kenneth Philpot, a Reed Smith litigator in San Francisco. “In the past, basically when they reached the end of an investigation they hadn’t felt any obligation to put any closure on that for the company.”
