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Corporations and securities brief ~ SEC votes to keep controversial mutual fund rule

[JURIST] Leading Wednesday's corporations and securities law news, on the day before SEC Chairman William Donaldson [Wikipedia profile] steps down, the Commission has voted 3-2 to keep a rule forcing mutual funds to be overseen by an independent chairman. The vote was a result of a federal appeals court ruling last week [JURIST report] that the SEC had not adequately considered the financial burden the rule placed on mutual funds. The ruling did not require the SEC to scrap the rule, only to reconsider it. As a part of the vote, the SEC added language to the rule concerning compliance costs. The US Chamber of Commerce [official website] vowed today in a press release to file suit again to prevent the SEC from enforcing the rule. Reuters has more.

In other corporations and securities news...

  • The SEC also decided Wednesday to drop the unpopular "quiet period" rule today. The rule prevented companies from publicly discussing their stock in the time leading up to an IPO. Last year, Google's IPO was nearly delayed [JURIST report] after the company's founders gave an interview in the quiet period. Audio of today's SEC meeting is available in RealPlayer and WindowsMedia formats. Reuters has more.

  • Nortel today apologized to its shareholders for its recent legal and financial troubles. Nortel has been rocked by accounting scandals and has recently filed suit against former executives who manipulated financial reports in order to trigger personal bonuses. The CBC has background on Nortel's recent struggles. Nortel will have a webcast of the shareholder conference available until July 12. Reuters has more.

  • The National Association of Attorneys General [official website] has sent a letter to CardSystems Solutions demanding the company notify all consumers who may have been affected by the company's recent security breach. The letter, which was signed by 48 AGs, also demands that the company notify the states how the breach occurred and how breaches will be prevented in the future. The Washington state AG-who authored the letter-has issued a press release explaining the letter and containing a link to the text of the letter. CardSystems' press release about the breach is available. The Seattle-Post Intelligencer has more.

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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