GC Charges a Case of SEC Sour Grapes?
A former official with the Securities and Exchange Commission thinks his former employer is taking out its frustration over a failed reporting rule on general counsel.
A record 10 general counsel have been charged with wrongdoing this year, most in connection with stock options backdating, the National Law Journal reports.
David Bayless, who formerly oversaw the SEC’s San Francisco office, told the NLJ he believes the SEC is frustrated because a lawyer outcry forced it to withdraw the proposed rule. The measure would have required corporate counsel to report wrongdoing to the government.
“I think in response to that, what is happening now is the SEC is trying to deputize general counsels,” he said. “If a GC is aware of wrongdoing, they are going to have to report it or else be a potential target of SEC actions. It is quite scary.”