Fugitive ex-CEO Jacob (Kobi) Alexander, who is scheduled to return to the U.S. from Namibia on Wednesday to plead guilty to securities fraud after leaving America more than 10 years ago, will try to convince a Brooklyn judge to release him on $25 million bail, reports the New York Daily News.

The 64-year-old ex-CEO of Comverse Technology Inc. moved to Namibia before he was formally charged in 2006 in a scheme involving the backdating of stock options at Comverse. He faces up to 10 years in prison, writes John Marzulli.

The Wall Street Journal explains how the alleged scheme worked:

Prosecutors allege Mr. Alexander, along with Comverse’s general counsel and its finance chief, for years would look for low-price trading days in the past on which to pretend they and other employees had been awarded stock options at that day’s price. Since an option grants its holder the right to buy shares at a fixed price, the alleged manipulation scored them instant gains. The backdating added millions to Mr. Alexander’s compensation.

Read the article.

In response to continued M&A activity, the National Association of Corporate Directors has prepared a guide to board oversight of mergers and acquisitions. The handbook describes the current M&A climate and suggests questions to ask and resources to deploy at every step in the M&A transaction process, from strategy to post-merger integration, according to Steve Kalan, NACD director of business development.

The full publication is available exclusively to NACD members, but a complimentary executive summary is available to everyone for downloading.

“With merger and acquisition activity continuing to shift the business landscape, directors can benefit from learning the size and scope of this trend and how it relates to their board responsibilities,” NACD says on its website. “Director Essentials: Strengthening Oversight of M&A summarizes current M&A trends and guides directors in considering M&A as a strategic option. It will help directors fulfill their roles throughout the M&A process, from strategy to integration. Aimed primarily at public company directors, this report is also useful for fiduciaries of nonprofits and privately owned companies.”

Download the summary.

Lawyers in corporate legal departments and attorneys at law firms both say the amount of outsourced legal work has increased over the past year, but they disagree by how much, according to the International Association of Defense Counsel’s (IADC) second annual Inside/Outside Counsel Relationship Survey.

This discrepancy, along with the survey’s finding that in-house and outside counsel continue to rate themselves higher than they rate each other, points to noteworthy and enduring disconnects in communication and in their understanding of each other’s challenges.

“The purpose of the 2016 Inside/Outside Counsel Relationship Survey was to better understand current trends in outsourcing legal services and to gauge how in-house counsel and outside lawyers are getting along, especially compared to the findings from the IADC’s 2015 survey,” said John T. Lay, Jr., IADC President and a shareholder at Gallivan, White & Boyd, P.A. “The survey results demonstrate that both sides still require greater understanding and support in certain key areas.”

Administered by a third party, the IADC online survey includes responses from 346 corporate attorneys currently working in the legal department of a company/corporation and 333 attorneys employed at a law firm or private law practice. Most respondents hold leadership positions within their organizations. A 2,500 member, invitation-only organization, the IADC conducted the survey in its role as a leader in many areas of legal reform and professional development.

Notably, sixty-one percent of inside counsel survey respondents reported an uptick in the amount of work they were contracting out to law firms over the last 12 months, while only 39 percent of outside counsel say their work from corporate clients increased over the same period. Compared to the previous 12 months analyzed in the 2015 survey, this year 8 percent more inside counsel and 12 percent more outside counsel reported growth in the overall amount of outsourced legal work. Also, slightly more than half of in-house respondents said they expect outsourcing to continue to grow over the next 12 months.

“The significant variance in opinion between the two groups on how much work is going to law firms tells us that companies are consolidating more work with a smaller number of law firms and that’s a trend that is having a significant impact on our industry,” said Andrew Kopon, Jr., IADC President-Elect and a founding member of Kopon Airdo, LLC.

The survey also revealed disagreements between inside and outside counsel on how well each group is doing in managing their client-vendor relationships and understanding of each other’s business goals and operations. Billing and budgets, unsurprisingly, are front and center among the survey respondents’ areas of concern. In-house counsel gave outside counsel their lowest grades concerning offering timely and realistic budgets and discounted fees/fixed fees/alternative arrangements when requested.

One in-house survey respondent noted that outside counsel “put multiple partners on the same matter; exceed budgets; do not offer fee arrangements that are linked to value.” Conversely, an outside counsel respondent suggested that in-house counsel should “eliminate budget requirements when a case is new and remove absurd billing guidelines.”

Communication also was called out by both inside and outside counsel respondents as an area of concern. One outside counsel respondent suggested that lawyers in legal departments should communicate “regularly and clearly on what the objectives are and the methods to be used to achieve those objectives.”

In-house survey respondents cited outside counsel communication failures including not returning phone calls and emails in a timely manner, insufficient updates on case developments and strategy changes, and “taking steps without first securing clearance from legal department.”

Inside counsel rated attorneys at law firms highest for their expertise and how well they work with the in-house legal department. Attorneys at law firms were most complimentary when rating in-house attorneys on responsiveness to questions, feedback, or requests for authorization.

To access a PDF of the 2016 Inside/Outside Counsel Relationship Survey results, visit http://www.iadclaw.org/assets/1/7/2016_IADC_Inside_Outside_Counsel_Relationship_Survey.pdf.

Phase 5, an independent market research firm, is conducting a comprehensive study of how third-party risks are managed within organizations.

Participants in the study will receive complimentary copies of the final report. All responses are confidential and will be reported only in aggregate form.

Some of the questions to be considered include:

• What are the top objectives organizations have when it comes to their third party risk management programs?
• What challenges do organizations face when developing their third party risk management programs, and what could undermine the effectiveness of their efforts?
• What processes do organizations employ to conduct third party due diligence?
• How does your organization compare to your peers when it comes to its level of third party program maturity?

Take the survey.

U.S. Transportation Secretary Anthony Foxx

Bloomberg Law examines a lawsuit involving U.S. Transportation Secretary Anthony Foxx, who is the target of an attempt to recover salary Foxx collected during his three-and-a-half year tenure as deputy general counsel at a now-defunct company.

“From 2009 to 2013, Foxx worked as a deputy general counsel at the bankrupt Charlotte bus maker DesignLine. During that time, he also served as mayor of Charlotte on a part-time basis, writes Gabe Friedman. “Now, the liquidating trustee in bankruptcy court is seeking to recover his pay — as a fraudulent transfer — during a three-and-a-half year stretch.”

The salary in question works out to $309,760, or $88,502.86 per year.

“The parties in the case have agreed to participate in a voluntary, non-binding mediation in Charlotte that will occur on or before Sept. 30, according to an order filed in federal bankruptcy court this month,” according to The Charlotte Observer.

Read the article.

A federal appeals panel in Chicago has tossed out a settlement intended to end a shareholder class action brought over the Walgreens Boots Alliance merger, saying the lawsuit and related settlement did nothing more than contribute a quick $370,000 payment to the plaintiffs’ lawyers, reports the Cook County Record.

“The type of class action illustrated by this case — the class action that yields fees for class counsel and nothing for the class — is no better than a racket,” wrote Judge Richard Posner in the unanimous decision. “It must end. No class action settlement that yields zero benefits for the class should be approved, and a class action that seeks only worthless benefits for the class should be dismissed out of hand.”

The firms representing the plaintiffs were Pomerantz LLP, of Chicago and New York; DiTomasso Lubin P.C., of Oakbrook Terrace; Friedman Oster PLLC, of New York; Law Office of Alfred G. Yates Jr. P.C., of Pittsburgh; and Levi & Korsinsky LLP, of New York, reports Jonathan Bilyk.

Read the article.

NAVEX Global’s 2016 Ethics & Compliance Training Benchmark Report shows compliance professionals struggling with small budgets, growing numbers of learners and limited time to train.

The company offers the report for downloading at no charge.

NAVEX says this benchmarking data can be used to measure a company’s program against its peers, and come away with strategies to solve key training challenges.

The ethics and compliance training benchmark report:

• Helps you make data-based decisions about who, when and how much to train
• Pinpoints emerging training topics and strategies to watch
• Reveals common program gaps and offers real-world solutions for tackling them

Download the report.

Reuters is reporting that two business groups have sued the Obama administration over a crackdown on U.S. companies that try to reduce their U.S. taxes by rebasing abroad in a process known as inversion.

Plaintiffs in the suit filed in a federal court in Texas are the U.S. Chamber of Commerce and the Texas Association of Business. They claim that a U.S. Treasury Department regulation enacted in April exceeded the department’s authority.

“The lawsuit was the first to challenge a rule on inversion,” write David Ingram and David Morgan. “The deals are legal, but have drawn criticism from some politicians who say U.S. companies that do them are avoiding their tax obligations. A wave of inversions largely ended after Treasury moved against the deals.”

The rule helped scuttle what had been a planned $160 billion combination of Allergan and U.S. drugmaker Pfizer Inc in what would have been the largest inversion ever, the report says.

Read the article.

When Warren Buffett and Berkshire Hathaway Inc. bought Portland, Oregon-based Precision Castparts Corp. for $37 billion early this year, the investor acquired the services of Precision’s hard-charging CEO, Mark Donegan.

According to a Bloomberg profile by Noah Buhayar, Donegan is “a low-profile CEO with a great track record, relentless about staying ahead of the competition. During the 13 years he led Precision as a publicly traded company, its stock climbed 20-fold, annual revenue quadrupled to $10 billion and he bought dozens of businesses, consolidating a position as a key supplier to Boeing Co., Airbus Group SE and General Electric Co. It helped him attain a cult status among investors.”

“Behind the numbers, though, something more brutal is going on,” the profile continues. “For years, Donegan has traveled the globe, sometimes bullying staff during quarterly reviews at Precision plants.” And sometimes those reviews included profanity and threats.

Read the article.

A group of 12 prominent corporate executives and financial leaders recently a discussion of common-sense principles companies and boards of directors can use to follow the best practices of corporate governance.

The leaders included Warren Buffett, CEO of Berkshire Hathaway, and Jamie Dimon, CEO of JPMorgan Chase & Co. Others were chief executives of General Electric, General Motors, Verizon, BlackRock, Vanguard, and more.

Topics include the independence and diversity of corporate boards, breaking away from the obsession with quarterly financial forecasts, accounting standards, and engagement between a company and its shareholders.

“Their stated goal was to offer a set of recommendations on which they found common ground, in the hope of promoting further conversation on corporate governance and ultimately stimulating economic growth,” as described by The New York Times. “Indeed, the principles appear premised on the crucial, if understated, connection between effective corporate governance and economic prosperity. In that regard, they reflect the frustration that governance-based debate among investors, corporate leaders and other stakeholders has failed to produce the kind of change needed to support economic strength.”

Download the principles.

“While each crisis is unique, proper preparation can stabilize the situation and mitigate potential liability and damages,” the firm says. “A particular area of focus should be the preparation of an incident investigation report – when to prepare a report, who should prepare a report, how the report should be prepared and what may happen with the report in subsequent litigation.”

Watch the on-demand video.

Image by Mike Mozart

Sports Authority’s creditors and the Justice Department have challenged the fading retailer’s plans to pay top executives as much as $2.85 million in bankruptcy bonuses, according to a Dow Jones Newswires report in The Denver Post.

Sports Authority once operated 460 athletic-gear but filed for bankruptcy protection and began going-out-of-business sales in an effort to pay its debts. As the liquidation entered its final weeks, Sports Authority unveiled plans for bonuses for four unnamed top executives.

“The bonus money is needed to encourage the executives to do their best in the company’s final days, according to Sports Authority’s lawyers. Confidentiality is appropriate to protect morale, and prevent competitors from using the pay data to lure Sports Authority’s leaders away, the company contends,” the report says.

Read the article.

Bloomberg Law is reporting that Yahoo General Counsel Ronald Bell could receive as much as $9 million in severance payout as a result of Verizon Communications’s $4.8 cash acquisition, according to the company’s filings.

In the report, Gabe Friedman points out that Bell’s so-called golden parachute payday is subject to a number of caveats, including that Verizon closes its deal to purchase Yahoo and that he is terminated.

By analyzing SEC filings, Friedman estimated severance payouts for other Yahoo executives, including $54.8 million the company’s CEO Marisa Mayer, $19.8 million for its chief revenue officer Lisa Utzschneider, and $16.1 million for chief financial officer Ken Goldman.

“All of those payouts are dependent on a number of factors, including that the executives leave the company,” according to the report.

Read the article.

Cincinnati-based Fifth Third Bancorp has reportedly fired its general counsel, Heather Russell Koenig, over what the bank called “a personal matter,” reports the Cincinnati Business Courier. She was the bank’s chief legal officer and corporate secretary.

In a statement, the bank said: “A personal matter has been brought to our attention that Fifth Third believes represents a conflict of interest. To resolve this, we have determined that the best course of action was a separation. Heather is a very qualified lawyer, and this matter had nothing to do with any of the legal work done by Heather during her tenure at Fifth Third.”

She previously worked at Bank of New York Mellon, Bank of America and Skadden, Arps in its Washington and London offices, reports Erin Caproni.

Read the article.

The Ninth Annual Blickstein Group Law Department Operations Survey, in cooperation with Consilio, is being conducted online now, with a deadline of Tuesday, August 9.

The survey is the oldest research specifically covering law department operations. It is designed solely for the professionals who manage complex legal department operations for their companies, Blickstein Group says on its website.

The LDO survey was first created in 2008 to give law departments a consistent platform to benchmark themselves and shed light on the then-emerging profession of law department operations.

Sponsors of this year’s survey include QuisLex, Exterro and Onit.

Survey participants will receive copies of the proprietary.

Topics include:

• Compensation
• Metrics and Reporting
• Outside Counsel Management
• Technology and Cybersecurity
• Change Management

Participate in the survey.

Two former executives of Acclarent Inc, a medical device company bought by Johnson & Johnson in 2010, were convicted on Wednesday by a U.S. jury on charges of promoting a product for an unapproved use, Reuters is reporting.

Prosecutors said former Acclarent Chief Executive William Facteau and former Vice President of Sales Patrick Fabian were found guilty in federal court in Boston of 10 misdemeanor counts of violating the U.S. Food, Drug and Cosmetic Act. The counts each carry a maximum prison sentence of one year.

But the jury acquitted the two defendants of felony charges of wire fraud and conspiracy, finding they did not act with intent to defraud or mislead.

“In an indictment unsealed last April, federal prosecutors said that beginning in 2006 or earlier, Facteau, 47, and Fabian, 49, promoted Acclarent’s Relieva Stratus Microflow Spacer device to deliver steroid medications to patients’ sinuses, though it was only approved by the U.S. Food and Drug Administration for keeping sinuses open,” reports Brendan Pierson for Reuters.

Read the article.

The U.S. Department of Justice has filed lawsuits to block the proposed mergers of four of the nation’s five biggest health insurers, reports The New York Times.

The proposed mergers involve Aetna and Humana, and Anthem and Cigna.

U.S. Attorney General Loretta E. Lynch said the proposed mergers “would leave much of the multitrillion-dollar health insurance industry in the hands of three mammoth insurance companies.”

“If these mergers were to take place, the competition among insurers that has pushed them to provide lower premiums, higher-quality care and better benefits would be eliminated,” she said.

“The companies responded by vowing, in varying degrees, to fight the government’s challenge,” report Leslie Picker and Reed Abelson. “Aetna, which had hoped to gain an advantage by being the first to reach a deal, aggressively defended its proposed merger, which it contended was different from the larger Anthem-Cigna deal that followed.”

Read the article.

Bloomberg Law has drilled down through Securities and Exchange Commission documents to see how the compensation of 30 of the highest paid general counsel compares to the pay for other top-ranking executives in their corporations.

The analysis found that 10 of the GCs were the fourth highest paid at their company, meaning less well-compensated than at least three other executives. “Then, in order, eight of the GCs were the third highest paid exec at their company, seven were in the number five spot, two were the second highest paid and so on,” wrote Gabe Friedman.

Thomas Mason was the only GC from the list ranked as the highest paid executive at his company. Mason’s whose title changed in December 2015 from a vice president to executive vice president and general counsel of Energy Transfer Equity, a Dallas-based natural gas storage and transportation company, the report says.

Read the article.

A widening criminal probe casts new light on a bitter defeat hedge fund activist Bill Ackman suffered in his 2009 bid for board seats at U.S. retailer Target Corp, Reuters is reporting.

Target for years has paid proxy solicitor Georgeson LLC to track the votes of its top investors, writes Ross Kerber. Now five current and former Georgeson employees have been charged with fraud for using bribes to get advance voting information on proxy battles.

“The same tactics cited in the criminal complaint were used to help Target defeat Ackman in 2009, according to a former Georgeson employee turned whistleblower. Ackman, who runs hedge fund Pershing Square Capital Management, failed in the high-stakes battle to install his own slate of directors at Target and change its business direction,” according to the report.

The whistleblower told Reuters that he told regulators about alleged bribes that were being used to gain advance access on how investors were voting.

Read the article.

Bruce Sewell is Apple’s general counsel and senior VP of Legal and Global Security.

Bruce Sewell, senior vice president of legal and global security and general counsel at Apple Inc., leads Bloomberg Law’s list of the most highly compensated general counsel in American companies.

While his 2015 salary was $1 million, other benefits brought his total compensation to $25,017,626, according to the report.

The list names 30 of the best-paid GCs, with total compensation ranging from $4.8 million for Eli Lilly’s Michael Harrington, to Sewell’s $25 million.

The top five slots on the list include GCs from Apple, General Electric, Amgen, Hertz and PayPal.

Blake Edwards and Gabe Friedman, with special assistance from Brandon Kochkodin, compiled the list for Bloomberg.

Read the article.