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Rahul Mukhi’s practice focuses on criminal, securities, and other enforcement and regulatory matters as well as on complex commercial litigation.

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2023”.

In a recent survey of almost 2,800 global organizations, one in five respondents reported experiencing a ransomware attack in 2021—with almost half of those respondents suffering significant operational impacts as a result.

On July 13, 2021, the Securities and Exchange Commission (“SEC”) announced a major enforcement action related to a proposed merger between a special purpose acquisition company (“SPAC”) and a privately held target company (“Target”).  This followed numerous warnings by the SEC staff over several months of enhanced scrutiny of such transactions under the federal securities laws.[1]  The respondents, except for the Target’s CEO, settled the action by collectively agreeing to civil penalties of approximately $8 million and to certain equitable relief described below. [2]
Continue Reading SEC Brings SPAC Enforcement Action and Signals More to Come

Last week, John Coates, the Acting Director of the SEC’s Division of Corporation Finance (“Corp Fin”), released a statement discussing liability risks in de-SPAC transactions.

The statement focused in particular on the concern that companies may be providing overly optimistic projections in their de-SPAC disclosures, in part based on the assumption that such disclosures are protected by a statutory safe harbor for forward-looking statements (which is not available for traditional IPOs).  Director Coates’s statement questions whether that assumption is correct, arguing that de-SPAC transactions may be considered IPOs for the purposes of the statute (and thus fall outside the protection offered by the statutory safe harbor).  He therefore encourages SPACs to exercise caution in disclosing projections, including by not withholding unfavorable projections while disclosing more favorable projections.
Continue Reading Acting Director of SEC’s Corp Fin Issues Statement on Disclosure Risks Arising from De-SPAC Transactions

Corporate investigations under the Biden Administration’s Department of Justice (“DOJ”) are expected to increase in the coming months.  Navigating such investigations can be complex, distracting, and costly, and comes with the risk of prosecution and significant collateral consequences for the company.  Recently, Cleary Gottlieb partners and former DOJ prosecutors, Lev Dassin, Jonathan Kolodner, and Rahul

A recent decision of the Delaware Court of Chancery in the ongoing WeWork/SoftBank litigation addressed a previously unresolved question:  can management withhold its communications with company counsel from members of the board of directors on the basis that such communications are privileged?  Building on past Delaware decisions concerning directors’ rights to communications with company counsel, including in the CBS case we previously discussed here, the court clarified that directors are always entitled to communications between management and company counsel unless there is a formal board process to wall off such directors (such as the formation of a special committee) or other actions at the board level demonstrating “manifest adversity” between the company and those directors.  See In re WeWork Litigation, C.A. No. 0258-AGB (Del. Ch. August 21, 2020).  In other words, management cannot unilaterally decide to withhold its communications with company counsel from the board (or specified directors management deems to have a conflict).

Continue Reading Recent Decision Confirms Directors’ Right to Access Privileged Communications Between Management and Company Counsel

On March 20, 2020, news outlets reported that four U.S. Senators sold millions of dollars in stock following classified briefings to the Senate on the threat of a COVID-19 outbreak.  Three days later, the Co-Directors of the Securities and Exchange Commission’s (“SEC”) Division of Enforcement, Stephanie Avakian and Steven Peikin, issued a statement reminding market participants of their obligations with respect to material non-public information (“MNPI”) and of the SEC’s commitment to protecting investors from fraud and ensuring market integrity.[1]
Continue Reading Insider Trading Risk During the COVID-19 Outbreak

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.

According to a 2019 survey, Chief Legal Officers ranked data breaches as the most important issue keeping them “up at night.” Cybersecurity also remained top of mind for boards and other corporate

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2020”.

Enforcement of anti-bribery, sanctions and money laundering laws remains a top priority for US authorities. In 2019, the US Department of Justice and civil regulators issued new or updated policies aimed at

In late July 2019, U.S. federal and state regulators announced three headline‑grabbing data privacy and cybersecurity enforcement actions against Equifax and Facebook.  Although coverage of these cases has focused largely on their striking financial penalties, as important are the terms the settlements imposed on the companies’ operations as well as their officers, directors, and compliance professionals—and what they signal about potential future enforcement activity to come.
Continue Reading July 2019 Privacy and Cybersecurity Enforcement: Lessons for Management and Directors

On May 14, 2018, certain members of the CBS board filed suit in Delaware seeking authorization to issue a special dividend intended to dilute the voting control of NAI, CBS’s controlling stockholder. Shortly after NAI filed a countersuit on May 29, 2018, NAI moved to compel the production of certain communications involving CBS’s outside and in-house counsel, including privileged documents concerning the decision to declare the dilutive dividend. NAI’s motion raised important issues regarding the rights of board members to access privileged communications with company counsel, which we discuss in our latest post.
Continue Reading Lessons Learned from the CBS-NAI Dispute: Rights of Board Members to Access Privileged Communications with Company Counsel