Mike Lynch, Attorney Chris Morvillo Among Missing After Yacht Sinks Off Coast of Sicily

Mike Lynch, Tech Entrepreneur, One of Seven Missing After Bayesian Yacht Sinks Off Sicily

Mike Lynch, one of the U.K.’s most celebrated tech entrepreneurs, lived for years under the cloud of a criminal investigation by U.S. prosecutors alleging that the value of the company he sold to Hewlett Packard for $11 billion was fraudulently inflated. In June, following a trial in San Francisco, he was acquitted.

On Monday, Lynch, 59 years old, was among those declared missing after his luxury yacht sank off the coast of Sicily. It was hit by a sudden thunderstorm just before sunrise, according to Italian officials.

A total of 22 people were aboard the vessel. Six passengers, including Lynch, one of his daughters, two other British nationals and two Americans, were missing, along with one crew member, according to the Italian coast guard and a person familiar with the matter.

The south Italy cruise was planned as a celebration of the recent courtroom victory, according to the father of one of the survivors and other people familiar with the matter.

SEC Charges Carl Icahn and Icahn Enterprises L.P. for Failing to Disclose Pledges of Company’s Securities as Collateral for Billions in Personal Loans

The Securities and Exchange Commission today announced charges against Carl C. Icahn and his publicly traded company, Icahn Enterprises L.P. (IEP), for failing to disclose information relating to Icahn’s pledges of IEP securities as collateral to secure personal margin loans worth billions of dollars under agreements with various lenders. IEP and Icahn agreed to pay $1.5 million and $500,000 in civil penalties, respectively, to settle the SEC’s charges.

According to the SEC’s orders, from at least December 31, 2018, through the present, Icahn, who is IEP’s controlling shareholder and Chairman of the board of directors of IEP’s general partner, pledged approximately 51 to 82 percent of IEP’s outstanding securities as collateral to secure personal margin loans worth billions of dollars under agreements with various lenders. Notwithstanding Icahn’s various margin loan agreements and amendments, IEP failed to disclose Icahn’s pledges of IEP securities as required in its Form 10K until February 25, 2022. Icahn also failed to file amendments to Schedule 13D describing his personal margin loan agreements and amendments, which dated back to at least 2005, and failed to attach required guaranty agreements. Icahn’s failure to file the required amendments to Schedule 13D persisted until at least July 9, 2023.

Boards of Directors and AI-Related Concerns

The substantive responses are more encompassing and perhaps better addressed as a series of question: what are the opportunities and risks that AI present for our company? How is our company now using AI and what are the ways we could better use AI? In particular, what are the ways that our company might use AI to help provide service to customers and clients? What are the risks associated with AI for our company and how are those risks being monitored? How are our competitors using AI and what risks does that present for our company?

Although it was not a key focus of the Journal article, questions concerning possible AI-related board liability exposures pervade all of these issues. The article does correctly recognize that oversight and monitoring issues could be very important in this context. Companies that experience AI-related problems or disruption could well face the unwanted attention of plaintiffs’ lawyers, who, armed, with the benefit of hindsight, might well scrutinize prior company actions, particularly board activity.

Adidas Defeats Stock Suit Over Rapper Ye’s ‘Racist’ Remarks

“The allegations here show that Ye engaged in erratic, inappropriate, and antisemitic behavior between 2013 to 2018 and beyond,” Immergut said.

“But the question before this Court is not whether to admonish Ye or hold Adidas morally accountable for Ye’s conduct,” she said. None of the targeted company statements are actionable for securities fraud, she said.

Privilege Risk, Whistleblower Pilot Undermine Internal Probes

In-house investigations counsel have been dissecting the Department of Justice’s new corporate whistleblower awards pilot program. The three-year initiative, effective Aug. 1, demonstrates the DOJ’s continued commitment to combating corporate crime. But it complicates one of the most critical tools in the fight against corporate malfeasance—the internal investigation.

The program’s focus on domestic corruption and health-care fraud involving private insurers puts in-house counsel on notice at multinational life sciences companies, especially those charged with monitoring and investigating complaints submitted via a company hotline.

Good corporate citizens, as well as the broader public, should benefit from the DOJ’s commendable effort to incentivize individual whistleblowers to come forward. Yet the accompanying temporary amendment to the Criminal Division’s corporate enforcement and voluntary self-disclosure policy threatens to undermine how investigations are conducted.

Macquarie ‘Half-Truth’ Claims OK’d After Supreme Court Ruling

A suit by Macquarie Infrastructure Holdings LLP investors has mostly survived a recent US Supreme Court decision in their case holding that a “pure omission” can’t support a securities fraud claim, the Second Circuit ruled Monday.

Allegations that the conglomerate omitted information about a regulatory trend and its effect on Macquarie’s fuel oil storage business must be excised from the proposed class action under the high court’s ruling, the appeals panel said. But securities fraud claims under Section 10(b)(5) of the Securities Exchange Act that are based on alleged “half-truths” can still proceed, the panel said ….