Sunday, November 11, 2012

Objection Appendix A

Appendix A to amicus curiae objection in Citigroup and Bank of America class action settlements

This Appendix A is a compilation of the solicitations I have made for the submission of views to the Court and the responses received.  The appendix is divided by categories of (i) business ethics organizations, (ii) lawyers, (iii) securities regulators, government prosecutors, and state attorneys general, (iv) corporate management, and (v) academics in the fields of business ethics and class action and securities law.

I. Business ethics organizations

A. Ethics & Compliance Officer Association

From: RDShatt@aol.com
To: KDarcy@theecoa.org
Sent: 11/4/2012 6:24:30 A.M. Central Standard Time
Subj: Bank of America settlement re Merrill Lynch acquisition
Dear Mr. Darcy,
I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
A main question raised in the objection is the effectiveness of entity liability, on the one hand, and individual officer and employee liability, on the other hand, for deterring corporate wrongdoing.
As you know, I have been soliciting the views of the Ethics & Compliance Officer Association on this matter for years, and my draft objection says I am further doing so at this time to try to provide the Court the benefit of informed views to aid the Court in the decision it needs to make.
Kindly advise me whether the Ethics & Compliance Officer Association is willing to make any submission to the Court about the subject in question.
Thank you.
Sincerely,
Rob Shattuck

[The chief ethics officer at Citigroup is also on the Board of Directors of the Ethics & Compliance Officer Assoication, and I sent her the below letter.]

From: RDShatt@aol.com
To: ethicsconcern@citi.com
CC: KDarcy@theecoa.org
Sent: 1/5/2013 8:34:40 A.M. Central Standard Time
Subj: Ethics based objection in pending Citigroup class action securities litigation
Via US mail and via email ethicsconcern@citi.com
Ms. Maria C. Hermida
Chief Ethics Officer
Citigroup
Citi Ethics Office
1 Court Square, 24th floor
Long Island City, N.Y. 11101
Dear Ms. Hermida,
In In re Citigroup Inc. Securities Litigation, No. 07 Civ. 9901 (SHS), I have filed an ethics based objection to the settlement and attorneys fees, which objection you may find at this URL http://www.blogger.com/blogger.g?blogID=1538178679463301757#editor/target=post;postID=5659695302069533751
I am writing this letter to you in your capacity as both Citigroup Chief Ethics Officer and as a member of the Board of Directors of the Ethics & Compliance Officer Association
I think my objection in the Citigroup case should be of interest to you in both capacities. I wish especially to make sure you are aware that I have solicited the views of the ECOA and the ECOA has been unwilling to say anything to me on the matter. I think this is of sufficient relevance and importance for the ECOA that the Board of Directors should be aware of the same and agrees that the ECOA should be silent.
If the Board has not been made aware of this matter, I hope you will request Mr. Darcy to inform the Board.
Thank you.
Sincerely,
Rob Shattuck
3812 Spring Valley Circle
Birmingham, AL 35203
(205) 967-5586
rdshatt@aol.com

B. Ethics Resource Center

From: RDShatt@aol.com
To: pat@ethics.org
Sent: 11/4/2012 6:27:40 A.M. Central Standard Time
Subj: Bank of America settlement re Merrill Lynch acquisition
Dear Dr. Harned,
I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
A main question raised in the objection is the effectiveness of entity liability, on the one hand, and individual officer and employee liability, on the other hand, for deterring corporate wrongdoing.
As you know, I have been soliciting the views of the Ethics Resource Center on this matter for years, and my draft objection says I am further doing so at this time to try to provide the Court the benefit of informed views to aid the Court in the decision it needs to make. 
Kindly advise me whether the Ethics Resource Center is willing to make any submission to the Court about the subject in question.
Thank you.
Sincerely,
Rob Shattuck

From: adam@ethics.org
To: RDShatt@aol.com
Sent: 11/7/2012 8:17:02 A.M. Central Standard Time
Subj: Your request to ERC
To Mr. Rob Shattuck,
I’m the Director of Public Relations at the ERC. Dr. Harned asked me to take a look at your request. Historically, this is not a role that ERC has played in the dialogue regarding ethics in the workplace. To my knowledge, the ERC has not attached its name to a legal document for this kind of action. It is not something we will do at this time.
Sincerely,
Adam Benson

From: RDShatt@aol.com
To: adam@ethics.org
Sent: 11/7/2012 8:52:37 A.M. Central Standard Time
Subj: Re: Your request to ERC
Thank you for replying, Adam.
Dr. Harned's letter on the "about" page of the ERC website says:
ERC has been in the organizational ethics business for a long time – 88 years and counting – and there are resources available at ethics.org that you would be hard-pressed to find elsewhere. This site is visited thousands of times a month by policymakers, chief ethics and compliance officers from business and government, students, scholars, nonprofit professionals and every-day readers from around the world. We think that proves that ethics is a dynamic field, and that ERC is often an important source of guidance for our visitors.
First and foremost, ERC is a nonprofit, nonpartisan research organization, dedicated to independent research that advances high ethical standards and practices in public and private institutions. With the global recession of the past year, we also are focusing more closely now on ethics and compliance aspects of the federal government’s response. The American economy’s dislocation has been so severe, and the government’s strategy so massive and sweeping, that we are witnessing ethics issues never seen before here in the nation’s capital. We will be keeping a close watch on developments.
If the ERC has no research or anything else to offer the Court related to the decision the Court needs to make in the Bank of America case about the efficacy of entity liability for deterring corporate wrongdoing, I will indicate that to the Court.
Sincerely,
Rob Shattuck

From: RDShatt@aol.com
To: adam@ethics.org
Sent: 12/15/2012 6:49:43 A.M. Central Standard Time
Subj: Fwd: Your request to ERC
Hello Adam,
In follow up to my previous emails, I have been focusing on the ERC's draft report on the Federal Sentencing Guidelines for Organizations (which report has been occasioned by the 20th anniversary of those Guidelines).
In the call for comments here, the ERC made particular mention that: "Our draft report discusses how settlements in which compliance/ethics programs are not considered may be undermining FSGO incentives for companies to promote ethical performance by its employees. The draft recommends greater judicial oversight of proposed settlements to ensure they give proper consideration to FSGO criteria."
In March, I emailed these comments to the ERC.
The ERC's draft report and the above recommendation of the ERC seem eminently appropriate for consideration by the Court, and I am endeavoring to call the Court's attention to the same.
If the ERC would care to elaborate, expand or modify regarding this matter for the benefit of the Court, I hope the ERC will do so.
Thank you.
Sincerely,'
Rob Shattuck

From: adam@ethics.org
To: RDShatt@aol.com
Sent: 12/17/2012 12:27:16 P.M. Central Standard Time
Subj: RE: Your request to ERC

Mr. Shattuck,
Thank you for your continued interest in the ERC and our research. You mentioned the draft report in your email. You might want to take a look at the final version of the report, which you can download at: http://fsgo.ethics.org/The+final+report+of+the+Advisory+Group
We release our reports to the public in the hopes that they will be useful in furthering discussion; however, at this time ERC does not have any comment on the specific case you are mentioning.
Have a good day.
Adam Benson


 II. Lawyers

A. DRI

From: RDShatt@aol.com
To: johnrkouris@DRI.org
CC: Kelly.Freeman@Meadowbrook.com, cehiltgen@hiltgenbrewer.com, cairns@gcglaw.com, hsneath@psmn.com, mmassaron@plunkettcooney.com, thowes@DRI.org, nparz@DRI.org, lconneen@DRI.org, amass@hanover.com
Sent: 11/4/2012 10:03:44 A.M. Central Standard Time
Subj: Re: Project to investigate diverse perspectives on entity vs. individual liab...
Dear Mr. Kouris,
Thank you for your below earlier email reply.
Related to this subject I have been exploring, please be advised that I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
One main question raised in the objection is the effectiveness of entity liability, on the one hand, and individual officer and employee liability, on the other hand, for deterring corporate wrongdoing.
Also, the objection raises the question of treating the case as a matter of unjust enrichment involving innocent (i.e., ignorant) persons who, by happenstance, benefited from, or did not benefit from, or were harmed by the corporate wrongdoing that was perpetrated by culpable officers and employees in the name of the corporation.
I renew my earlier solicitation of views of the DRI on the subject of entity liability versus individual officer and employee liability, in order, as the draft objection indicates, to try to provide the Court the benefit of informed views to aid the Court in the decision it needs to make about that question.
If the DRI would care to express a view about treating the case as one of unjust enrichment involving innocent persons as referred to above, that could be helpful as well.
I should say that I noticed with great interest that the DRI has launched a Center for Law and Public Policy and that, in the first poll, done in August of this year, class action lawsuits were a topic. About the public's participation in class actions, the poll highlights reported on the DRI website say:
Most are not doing it for the money. Seventy percent of those joining a class action suit received a financial award with 73% of them calling it “insignificant”. Motivation may lie in the fact that 65% of all Americans think class action suits make corporations more responsible since they also feel that the suits unfairly enrich plaintiff attorneys (59%). About half say they joined merely to send a message.
Did the poll include any questions along the lines of the following:
Do you think corporate management will make corporations more responsible if culpable officers, directors and employees are held individually liable for a corporate wrongdoing? What kind of message do you think is sent if a corporation settles a class action lawsuit for a very large amount but with no admission of wrongdoing, and no officer, director or employee participating in the alleged corporate wrongdoing makes a contribution to the settlement or ever has any liability or receives punishment for their participation in the alleged wrongdoing?
I hope the DRI will make a submission to the Court. Please let me know if the DRI is willing to do so.
Thank you.
Sincerely,
Rob Shattuck

From: jludlam@DRI.org
To: RDShatt@aol.com
CC: jludlam@DRI.org
Sent: 11/6/2012 9:17:58 A.M. Central Standard Time
Subj: Shattuck Emails to DRI
Dear Rob,
I have been asked to contact you on behalf of DRI to let you know that, irrespective of DRI’s positions, your unsolicited emails to the employees, volunteer leaders, and members of DRI are not welcome. We respectfully request that you please stop sending unsolicited emails to the employees, volunteer leaders, and members of DRI. In anticipation of your understanding and honoring of this request, thank you.
Sincerely,
Jay Ludlam

From: RDShatt@aol.com
To: jludlam@DRI.org
Sent: 11/7/2012 8:32:52 A.M. Central Standard Time
Subj: Re: Shattuck Emails to DRI
Dear Jay,
Thank you for your reply.
May I ask whether your email is a request that I not communicate or try to communicate to DRI in any way, such as to a designated DRI contact person?
If that is the request, I would like to ask what the rationale is, taking into account for example the below webpage for the Center for Law and Public Policy and particularly the Education activity of "conversation with . . . the general public on judicial issues" and the Advocacy activity of "work to communicate those opinions with the intention of affecting public opinion and public policy."
Sincerely,
Rob Shattuck
DRI webpage Overview
The DRI Center for Law and Public Policy "The Center", through scholarship, legal expertise and advocacy, provides a meaningful voice for the defense bar in the national discussion of substantive law and constitutional issues, and the integrity of the judicial system. It is a voice that is heard through published research materials, amicus briefs, practical tools and resources, and creative public education initiatives.
About Us
For more than fifty years, our parent organization, DRI, has been the voice of the defense bar, advocating for 22,000 defense attorneys and corporate counsel members and defending the integrity of the civil judiciary. A thought leader, DRI provides world-class legal education, deep expertise for policy-makers, legal resources, and networking opportunities to facilitate career and law firm growth.
Observing a rise in adverse influences that threaten judicial independence; detecting a lack of balance in the plaintiff/defense debate on substantive legal issues, judicial process, and judicial reforms; and noting an alarming lack of public understanding of the critical role of the judiciary in a democratic society; DRI acted.
In September 2012, the leadership of DRI headed by President Henry Sneath created the Center for Law and Public Policy to act as a think tank and the public voice of DRI on judicial issues of import to the defense bar.
The Center works through three committees: Public Policy, Amicus, and Public Education.
The Center offers:
Scholarship: The Center’s activities and products are based upon a sound scholarship of the law, the Constitution, and the judiciary.
Expertise: The Center draws upon the collective expertise of its leadership and committee members but also upon the expertise of DRI’s 22,000 attorney members and its considerable legal resource materials.
Education: A primary function of the Center is to provide balanced and impartial educational materials, and conversation with policy-makers and the general public on judicial issues.
Advocacy: Where appropriate, the Center will take formal positions on substantive law, judicial process, and judicial reform from the defense bar perspective and work to communicate those opinions with the intention of affecting public opinion and public policy.
III. Securities regulators; government prosecutors; state attorneys general

A. Securities regulators

1. SEC, North American Securities Administrators Association; Alabama

From: RDShatt@aol.com
To: publicinfo@sec.gov, ri@nasaa.org, asc@asc.alabama.gov
Sent: 11/5/2012 7:37:41 A.M. Central Standard Time
Subj: Fwd: Class action lawsuits that only shift losses around and that don't deter
Via email publicinfo@sec.gov
Mr. Mark D. Cahn, General Counsel
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Via email ri@nasaa.org
Mr. Russ Iuculano
Executive Director
North American Securities Administrators Association, Inc. (NASAA)
750 First Street, N.E., Suite 1140
Washington, D.C. 20002
Via email asc@asc.alabama.gov
Mr. Joseph P. Borg, Director
Alabama Securities Commission
P.O. Box 304700
Montgomery, AL 36130-4700
Dear Mr. Cahn, Mr. Iuculano, and Mr. Borg,
In follow up to my below October 13th email [this email], please be advised that I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the referenced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
To reiterate from my October 13th email: The Securities and Exchange Commission and state securities regulators are charged with responsibility for protecting investors and preventing wrongdoing. The SEC and state regulators should have a sense about the justification for class action lawsuits where selling shareholders get benefit from the wrongdoing and the class action lawsuit merely shifts losses around arbitrarily among other shareholders and increases those losses by huge attorneys fees. The SEC and state regulators are also interested parties who should have views about the efficacy of entity level liability versus officer and employee liability for purposes of deterring corporate wrongdoing. In doing their job, the SEC and state regulators ought to provide lawmakers and judges the benefit of their knowledge and experience.
Please acknowledge receipt of this email, and please advise me whether or not the SEC, NASAA, and the Alabama Securities Commission, respectively, are willing to make a submission to the Court of their respective informed views about either or both of the two main questions presented to the Court in my objection.
Thank you.
Sincerely,
Rob Shattuck

2. Ohio Division of Securities

From: RDShatt@aol.com
To: securitiesgeneral.questions@com.state.oh.us
Sent: 11/11/2012 9:19:58 A.M. Central Standard Time
Subj: Bank of America settlement regarding Merrill Lynch acquisition
Dear Commissioner Seidt,
At the risk of being viewed as an unappreciated meddler, I wish to transmit to you the below email I have sent to the Board of STRS Ohio, which email criticizes the Bank of America class action litigation in which STRS Ohio is a lead plaintiff.
My criticism is that the litigation is basically a matter of loss shifting (in the Bank of America case, the settlement may decrease the STRS Ohio losses; in other cases, losses of STRS Ohio may get increased), and the litigation does not have deterrent value.
I believe federal and state securities regulators should have a good sense about this, and I have sent this email to the SEC, to NASAA, and to the Alabama Securities Commission (my state regulator).
I think my criticism has substantial validity. If the Division of Securities disagrees, I invite the Division to provide the Court with the benefit of the Division's views.
Thank you.
Sincerely,
Rob Shattuck
Birmingham, AL
[referenced email to Board of STRS Ohio]
From: RDShatt@aol.com
To: ContactUs@strsoh.org
Sent: 11/10/2012 7:48:38 A.M. Central Standard Time
Subj: Bank of America settlement
To the Board of STRS Ohio:
I wish to comment to the Board regarding the recently announced Bank of America settlement of the class action litigation concerning the Merrill Lynch acquisition, in which STRS Ohio is a lead plaintiff.
I am not a member of the plaintiff class and my interest in the litigation is only as a member of the general public.
I strongly disapprove of this class action litigation and I propose to file with the Court this "amicus" objection regarding the Bank of America settlement.
While STRS Ohio may financially benefit from the settlement (i.e.,the amount it receives from the settlement will exceed its indirect share, as a Bank of America shareholder, of the Bank of America settlement payment and other Bank of America costs of litigation), the case is largely a shifting around of shareholder losses (which shareholder losses are increased by the plaintiffs' attorneys fees plus Bank of America's attorneys fees).
While STRS Ohio may financially benefit from this settlement, in other class action lawsuits against other corporations in which STRS Ohio is an owner of securities and in which STRS has losses, the settlements may shift losses to, and increase the losses of, STRS Ohio (again, all such losses being increased by attorneys fees and other litigation costs).
Further, as discussed in my objection, this litigation is of no deterrent value and is counterproductive to the societal goal of deterring corporate wrongdoing. STRS Ohio rightly wants its investments to be protected against losses from securities law violations, but that objective is poorly served by this litigation, and STRS Ohio should be an advocate of the corporate and societal resources that are expended in this type of litigation be employed instead for more enforcement actions against individual corporate officers and employees who are responsible for corporate wrongdoing.
Thank you.
Sincerely,
Rob Shattuck
Birmingham, AL

3. Texas State Securities Board

Subj: TRS of Texas- BofA settlement
TRS of Texas- BofA settlement
To Texas State Securities Board,
At the risk of being viewed as an unappreciated meddler, I wish to transmit to you the below email I have sent to the Board of Trustees of TRS of Texas, which email criticizes the Bank of America class action litigation in which TRS of Texas is a lead plaintiff.
My criticism is that the litigation is basically a matter of loss shifting (in the Bank of America case, the settlement may decrease the TRS of Texas losses; in other cases, losses of TRS of Texas may get increased), and the litigation does not have deterrent value.
I believe federal and state securities regulators should have a good sense about this, and I have sent this email to the SEC, to NASAA, and to the Alabama Securities Commission (my state regulator).
I think my criticism has substantial validity. If the State Securities Board disagrees, I invite the Board to provide the Court with the benefit of the Board's views.
Thank you.
Sincerely,
Rob Shattuck
Birmingham, AL
[referenced email to Board of Trustees of TRS of Texas]
From: RDShatt@aol.com
To: ccharlotte@snyderisd.net, tkcharleston@pvamu.edu, info@theadvancedfinancialgroup.com, palmer@nts-online.net, nsissney@whitesboroisd.org
Sent: 11/11/2012 8:34:53 A.M. Central Standard Time
Subj: To TRS Board of Trustees re: Bank of America settlement
To the Board of Trustees of TRS of Texas:
[above are email addresses I was able to find for trustees; some trustees I could not find addresses for]
I wish to comment to the Board regarding the recently announced Bank of America settlement of the class action litigation concerning the Merrill Lynch acquisition, in which TRS of Texas is a lead plaintiff.
I am not a member of the plaintiff class and my interest in the litigation is only as a member of the general public.
I strongly disapprove of this class action litigation and I propose to file with the Court this "amicus" objection regarding the Bank of America settlement.
While TRS of Texas may financially benefit from the settlement (i.e.,the amount it receives from the settlement will exceed its indirect share, as a Bank of America shareholder, of the Bank of America settlement payment and other Bank of America costs of litigation), the case is largely a shifting around of shareholder losses, some being increased and some being decreased (which total shareholder losses are increased by the plaintiffs' attorneys fees plus Bank of America's attorneys fees).
While TRS of Texas may financially benefit from this settlement, in other class action lawsuits against other corporations in which TRS of Texas is an owner of securities and in which TRS of Texas has losses, the settlements may shift losses to, and increase the losses of, TRS of Texas (again, the total of all such losses being increased by attorneys fees and other litigation costs).
Further, as discussed in my objection, this litigation is of no deterrent value and is counterproductive to the societal goal of deterring corporate wrongdoing. TRS of Texas rightly wants its investments to be protected against losses from securities law violations, but that objective is poorly served by this litigation, and TRS of Texas should be an advocate of the corporate and societal resources that are expended in this type of litigation be employed instead for more enforcement actions against individual corporate officers and employees who are responsible for corporate wrongdoing.
Thank you.
Sincerely,
Rob Shattuck
Birmingham, AL

4. SEC

From: RDShatt@aol.com
To: _________@sec.gov
Sent: 12/23/2012 8:36:20 A.M. Central Standard Time
Subj: Citizen's appeal re Citigroup and Bank of America
Mr. John Nester, Director
Office of Public Affairs
United States Securities and Exchange Commission
Washington, DC
Dear Mr. Nester:
In November I endeavored to contact the SEC General Counsel, Mr. Mark D. Cahn, about this matter, by means of the email address publicinfo@sec.gov. I did not receive a response, and I am writing this email to you because of the stated role of the Office of Public Affairs to coordinate communications between the general public and the SEC.
I am filing this amicus curiae objection in the pending Citigroup and Bank of America private securities class action lawsuits pending in the United States district court for the Southern District of New York.
My general statement in the objection says the following:
This (and other large class action litigation) has a significant adverse effect on the protection of the public from corporate wrongdoing, because of an undue focus of such litigation on entity liability to try to deter corporate wrongdoing. This focus undermines business ethics and diverts corporate and societal resources away from a more effective deterrent of holding individually liable the officers and employees who design and carry out the corporate wrongdoing.
This adverse effect flowing from the undue focus on entity liability is augmented by insufficient attention being paid to the fact that the litigation mainly seeks transfers of amounts by and among persons in interest who are not culpable of any wrongdoing and is, at bottom, a case of unjust enrichment. Instead of being treated as the unjust enrichment case it is, the litigation is allowed to play up the wrongdoing carried out by the culpable officers and employees, and it improperly makes the same relevant to the how the unjust enrichment involving innocent persons gets resolved. If more attention was paid to the case being about unjust enrichment as between innocent persons, there would be less willingness of the Court to allow entity liability to undermine the protection of the public from corporate wrongdoing.
Further, the innocent persons in this case who have benefited from the alleged wrongdoing are largely not parties to the litigation, they will not be required to pay over their unjust enrichment to other innocent persons who have suffered harm from the wrongdoing, and the transfers among innocent parties in interest who have losses are an arbitrary shifting around of losses of those parties, decreasing the losses of some and increasing the losses of others.
As part of the objection, I have been soliciting, to provide to the Court, the informed opinions of a variety of organizations and persons who have special interest or expertise regarding the effectiveness of entity level liability versus individual officer and employee liability for deterring corporate wrongdoing. These include regulators, state attorneys general, criminal prosecutors, corporate management, ethics and compliance officers, academics, and defense lawyers.
I am further soliciting opinions of securities regulators, securities law professors and others for their views about whether the litigation should be more viewed as a case of unjust enrichment among innocent parties and whether the law should shift around losses where there is no disgorgement from the innocent parties in interest who benefited by happenstance from the wrongdoing.
I am compiling my inquiries in this Appendix A to my objection.
Here is what I would like to ask the SEC:
1. Does the SEC have a coherent policy about pursuing entity liability versus individual officer and employee liability for deterring corporate securities wrongdoing, or is that matter decided ad hoc and case by case, depending on the facts and circumstances of the particular SEC enforcement action and the judgement of the SEC personnel involved? If there is a coherent SEC policy on this subject, is it written down where I can look at it?
2. What does the SEC think the law should do in cases such as the instant Citigroup and Bank of America cases, the Tyco case a few years ago, and numerous similar cases, in which there is fraud or other corporate misrepresentation that creates an "artificially inflated price" for a period of time before there is public disclosure, and during which period "lucky" sellers of stock and securities walk away with "windfall" gains (or avoidance of losses) and the buyers are stuck with the corresponding losses in question? Should the law effectuate a reallocation of losses among the buyers (and others) who have the losses, as exemplified by the Citigroup, Bank of America and Tyco cases? Alternatively, should the law attempt a means for recovering the "windfall" gains (or avoidance of losses) from the "lucky" shareholders who sold during the "artificially inflated period"? Or, as a third choice, should the law leave selling and buying shareholders with the consequences that have occurred by happenstance to them, and instead dedicate more legal and regulatory machinery to punishing the officers and employees who were culpable of the wrongdoing?
3. Given the SEC's budget and the enforcement activities that it is able to undertake on behalf of the investor public with that budget, does the SEC think the investor public gets value for the money paid to the lawyers in cases like Citigroup, Bank of America and Tyco?
Any response that the SEC can provide to this citizen's appeal for information will be greatly appreciated.
Thank you.
Sincerely,
Rob Shattuck
Birmingham, AL

B. State attorneys general

1. National Association of Attorneys General

From: RDShatt@aol.com
To: jmcpherson@naag.org
Sent: 11/10/2012 5:23:03 A.M. Central Standard Time
Subj: Fwd: Class action lawsuits that only shift losses around and that don't deter
Dear Jim,
Per the below [this email], this is progressing, and I have drafted this amicus curiae objection to file in the Bank of America settlement concerning the Merrill Lynch acquisition.
I didn't hear from you in reaction to the first email on which you were copied, so I think I will proceed to contact the state attorneys general directly.
Thanks for your bearing with me.
Sincerely,
Rob Shattuck

C. Government prosecutors

1. National Association of Former United States Attorneys

From: RDShatt@aol.com
To: Jay_B_Stephens@Raytheon.com
Sent: 11/9/2012 7:55:35 A.M. Central Standard Time
Subj: NAFUSA- Bank of America settlement re Merrill Lynch acquisition
Dear Mr. Stephens,
I am a retired lawyer.
In my retirement, I have a blog How To Combat Plaintiffs' Lawyers that I keep up.
I am currently very focused on the comparative effectiveness of entity liability versus individual officer and employee liability for deterring corporate wrongdoing.
Bank of America recently announced a $2.4 billion settlement in the class action against it related to its 2008 acquisition of Merrill Lynch. I propose to file this "amicus" objection, in which a main question presented is whether the entity liability has a deterrent value.
I am contacting you because of your status as President of NAFUSA, and because I am trying to tap into the perspective and informed views, derived from their job experience, that prosecutors have on this subject.
Also, I note you are currently General Counsel for Raytheon, you were the moderator of “Corporate Compliance- Investigations, Diligence and Analytics” at the NAFUSA Atlanta conference, and you are presumably also seeing this subject from a corporate management perspective.
Do you think NAFUSA is an organization that would be willing to formulate and express a view on this subject for the benefit of the Court in connection with the "amicus" objection that I propose to file in the Bank of America settlement?
Alternatively, can you refer me to any prosecutor or former prosecutor who is vocal on this topic and who might individually state his or her views on the subject for the benefit of the Court?
Would you care to share with me your personal views that combine your former prosecutorial perspective with your current management perspective?
Thanks very much if you can help me out here.
Sincerely,
Rob Shattuck

From: rossmanr@gmail.com
To: alicehmartin@gmail.com
CC: RDShatt@aol.com
Sent: 11/12/2012 10:07:31 A.M. Central Standard Time
Subj: Re: NAFUSA- Bank of America settlement re Merrill Lynch acquisition
Mr. Shattuck:
NAFUSA was founded as a non-partisan organization to promote, defend, and further the integrity and the preservation of the litigating authority and independence of the Office of the United States Attorney. We do not take positions as an organization on general issues of the administration on justice. Our members, however, are free, of course, to take individual positions as they choose.
I am unaware of any specific members who have an interest in the issue of entity liability versus individual liability. You are free to review our member directory at www.nafusa.org and reach out to any individual members for their personal views.
Rich Rossman
NAFUSA
Executive Director
IV.  Corporate management 

 A.  US Chamber of Commerce

From: RDShatt@aol.com
To: tdonohue@uschamber.com
CC: lrickard@uschamber.com, rjosten@uschamber.com, lclaffee@uschamber.com, rlundberg@uschamber.com, TCollamore@uschamber.com
Sent: 11/5/2012 7:32:33 A.M. Central Standard Time
Subj: Fwd: Project to investigate diverse perspectives on entity vs. individual lia...
Dear Mr. Donohue,
In September of 2011, I emailed to you and to other US Chamber officers the below email giving this link to a project I have to investigate the views, analyses, and information that multiple interested parties have concerning the effectiveness of entity level liability versus officer and employee individual liability as a means to deter corporate wrongdoing. Such interested parties include lawmakers, judges, regulators, state attorneys general, criminal prosecutors, corporate management, ethics and compliance officers, corporation lawyers, various academics, plaintiffs' lawyers, tort reform organizations, and consumer protection organizations.
Following on to the foregoing, I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
A main question raised in the objection is the effectiveness of entity liability, on the one hand, and individual officer and employee liability, on the other hand, for deterring corporate wrongdoing.
I renew my earlier solicitation of views of the US Chamber on this subject of entity liability versus individual officer and employee liability, in order, as the draft objection indicates, to try to provide the Court the benefit of informed views to aid the Court in the decision it needs to make.
Would the US Chamber (or its Institute for Legal Reform) be willing to make a submission to the Court setting out an informed view from its management/business perspective about the effectiveness of class action settlements, such as the Bank of America settlement, in deterring corporate wrongdoing?
Please let me know if the US Chamber is willing to do this.
Thank you.
Sincerely,
Rob Shattuck

From: RConrad@USChamber.com
To: RDShatt@aol.com
Sent: 11/5/2012 7:10:08 P.M. Central Standard Time
Subj: FW: Project to investigate diverse perspectives on entity vs. individual lia...
Dear Mr. Shattuck,
The National Chamber Litigation Center is the public policy law firm of the U.S. Chamber of Commerce. Your request for Chamber participation in your liability project was referred to me.
We represent the Chamber in court on matters of national concern to the business community. We will not be participating in this project.
Robin S. Conrad

From: RDShatt@aol.com
To: RConrad@USChamber.com
CC: lrickard@uschamber.com
Sent: 11/6/2012 7:30:22 A.M. Central Standard Time
Subj: Re: FW: Project to investigate diverse perspectives on entity vs. individual ...
Thank you for replying, Ms. Conrad.
I interpret your response to mean that the Chamber declines to express to the Court any view of the Chamber as to whether the Bank of America settlement (or similar class action settlements) deter or do not deter corporate wrongdoing, and I will so advise the Court.
I assume you speak for the Chamber's Institute for Legal Reform as well. I am copying Ms. Rickard on this email. If I am incorrect in this assumption, Ms. Rickard can advise me.
Sincerely,
Rob Shattuck

From: RConrad@USChamber.com
To: RDShatt@aol.com
CC: LRickard@USChamber.com
Sent: 11/6/2012 7:59:19 A.M. Central Standard Time
Subj: Re: Project to investigate diverse perspectives on entity vs. individual ...
We are not authorizing you to make any representations to the court about us or on our behalf.

From: RDShatt@aol.com
To: RConrad@USChamber.com
CC: LRickard@USChamber.com
Sent: 11/6/2012 8:03:08 A.M. Central Standard Time
Subj: Re: Project to investigate diverse perspectives on entity vs. individual ...
Thank you again, Ms. Conrad. I will include our email correspondence in an appendix that I will prepare for my Bank of America objection, and the Court can make its own interpretation.
Sincerely,
Rob Shattuck

B. Business Roundtable Institute for Corporate Ethics

From: RDShatt@aol.com
To: BRICE@darden.virginia.edu
Sent: 11/12/2012 7:23:52 A.M. Central Standard Time
Subj: Bank of America settlement re Merrill Lynch acquisition
Dear Mr. Moriarty,
I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
A main question raised in the objection is the effectiveness of entity liability, on the one hand, and individual officer and employee liability, on the other hand, for deterring corporate wrongdoing.
As you know, I have been soliciting the views of the Business Roundtable Institute for Corporate Ethics on this matter for years, and my draft objection says I am further doing so at this time to try to provide the Court the benefit of informed views to aid the Court in the decision it needs to make.
Kindly advise me whether BRICE is willing to make any submission to the Court about the subject in question.
Thank you.
Sincerely,
Rob Shattuck

V.  Academics

A. Business ethics field

From: RDShatt@aol.com
To: Sean.hannah@usma.edu, bavolio@u.washington.edu, Fred.Walumbwa@asu.edu, msh@rouenbs.fr, tom_lawrence@sfu.ca, hasnasj@georgetown.edu, rprentice@mail.utexas.edu, strudler@wharton.upenn.edu, DenisArnold@uncc.edu, audi.1@nd.edu, mzwolinski@sandiego.edu, brenkg@msb.edu
Sent: 11/4/2012 6:10:05 A.M. Central Standard Time
Subj: Fwd: To BEQ authors: re Citigroup mortgage fraud settlement
Dear Professors,
Following on from the below email to you in October 2011, I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
A main question raised in the objection is the effectiveness of entity liability, on the one hand, and individual officer and employee liability, on the other hand, for deterring corporate wrongdoing. The draft objection currently say, "It is further noted that there seems to be a lack of academic interest and a paucity of academic research."
I would very much appreciate any aid you can give me in making to the Court citations of academic articles on the subject that you think the Court should consider.
Please help me out if you can.
Thank you.
Sincerely,
Rob Shattuck


From: RDShatt@aol.com
To: Sean.hannah@usma.edu, bavolio@u.washington.edu, Fred.Walumbwa@asu.edu, msh@rouenbs.fr, tom_lawrence@sfu.ca, hasnasj@georgetown.edu, rprentice@mail.utexas.edu, strudler@wharton.upenn.edu, DenisArnold@uncc.edu, audi.1@nd.edu, mzwolinski@sandiego.edu, brenkg@msb.edu
CC: francesco.guerrera@wsj.com, michael.siconolfi@wsj.com, ethicsconcern@citi.com
Sent: 10/28/2011 8:19:20 A.M. Central Standard Time
Subj: To BEQ authors: re Citigroup mortgage fraud settlement

Dear Professors,


This October 20 Wall Street Journal article on the Citigroup mortgage fraud settlement for $285 million against Citigroup also reports that the SEC has negligence civil charges against a Citigroup employee that it is pursuing. The lawyer for the Citigroup employee is quoted as saying, "He was not responsible for any alleged wrongdoing, he did not control or trade the position, did not prepare the disclosures and did not select the assets," and, "We will vigorously defend this lawsuit."


Here are some arguably compelling questions for business ethicists:


1. If there is wrongdoing for which Citigroup is called on to pay $285 million, shouldn't officers and employees who are responsible for the wrongdoing be held liable to some extent?


2. If responsible officers and employees are not held liable to some extent, is that not a signal to all officers and employees, "Go ahead, put your thinking caps on, and come up with your next idea for making the company money, don't worry too much about whether it is ethical or not, ideally the company will make some good money from it and be able to pay you additional compensation for the year, and no one will be the wiser, of, if your idea does come a cropper and a liability has to be paid, it will come out of the hides of the stockholders and not you, so again don't worry"?


3. If there is wrongdoing by Citigroup, are there legitimate reasons why responsible officers and employees should not be held personally liable?


4. Is it possible that the legal system works so badly that there is fact no wrongdoing but a $285 million payment still gets extracted from Citigroup? If so, and there is no wrongdoing, can that have any adverse effect on attitudes and efforts related to Citigroup and its officers and employees being more ethical?

5. Will a meaningful determination be in fact made of wrongdoing, or not, in this matter, which will provide guidance to other officers and employees of Citigroup and of other banks and corporations, relative to future decisions and actions of such officers and employees?
Rob Shattuck
B.  Law professors

From: RDShatt@aol.com
To: jfisch@law.upenn.edu
Sent: 11/3/2012 8:03:06 A.M. Central Daylight Time
Subj: Re: Confronting the Circularity Problem in Private Securities Litigation-linl...
Dear Professor Fisch,
I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
I solicit any involvement you would care to undertake related to my objection. Please let me know if you are interested.
Thank you.
Sincerely,
Rob Shattuck
In a message dated 2/3/2011 8:51:29 P.M. Central Daylight Time, jfisch@law.upenn.edu writes:

Collusion yet, but individual liability also presents litigation obstacles that are difficult for plaintiffs’ lawyers to address.
From: RDShatt@aol.com [mailto:RDShatt@aol.com]
Sent: Thursday, February 03, 2011 8:00 AM
To: Jill E. Fisch
Cc: langevoort@law.georgetown.edu
Subject: Re: Confronting the Circularity Problem in Private Securities Litigation-linl...
Dear Professor Fisch,
Thank you for pointing me to access to the full text of your article, which I have studied.
Lawmakers and judges are ultimately who make the decisions about what the law is or shall be. I think they remain in a muddle about individual versus enterprise liability for achieving deterrence. Whether an article such as yours can be an aid to them in getting out of that muddle, I don't know.
Your article led me to Professor Langevoort's 2007 article about individual versus enterprise liability. In my view, lawmakers and judges ought to pay particular heed to his concluding paragraph in the article, which is:
The latter should be reformed in any event, but it would be a
shame if the relatively small amount of deterrence and
compensation offered by the current litigation regime were to be
eliminated without careful attention to the problem of individual
executive responsibility. We should admit, of course—as
Vikramaditya Khanna has argued in the criminal context—that as
a matter of politics, the current emphasis on enterprise liability
might exist precisely because it provides cover for the protection of
executive wealth. If so, it is naïve to expect that the system will
change easily. At least, however, we should remove the cover and
see what happens.
Where Professor Langevoort finds a possibility of "cover," I have started to find "collusion" between plaintiffs' lawyers and management. See this class action objection I recently submitted.
Best regards.
Sincerely,
Rob Shattuck
In a message dated 1/17/2011 4:53:59 P.M. Central Standard Time, jfisch@law.upenn.edu writes:
Here you go.
http://ssrn.com/abstract=1390278
From: RDShatt@aol.com [mailto:RDShatt@aol.com]
Sent: Sunday, January 16, 2011 8:47 AM
To: Jill E. Fisch
Subject: Confronting the Circularity Problem in Private Securities Litigation-linl

From: RDShatt@aol.com
To: jfisch@law.upenn.edu
Sent: 1/16/2011 7:42:38 A.M. Central Standard Time
Subj: Confronting the Circularity Problem in Private Securities Litigation
Dear Professor Fisch,
I am not an academic and do not see on the internet access to the full text of your above article and am able to see only this abstract: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1390278#1101723.
I think the circularity problem is something I have, as an investor and citizen, tried to scream "bloody murder" about. See, e.g., this entry in a blog that I write.
The abstract suggests that your article does not scream bloody murder about the circularity problem, and I would be interested in reading the full text, if you are in a position to send it to me or give me a link I can access.
Thank you.
Rob Shattuck
From: RDShatt@aol.com
To: langevdc@law.georgetown.edu
Sent: 11/3/2012 8:31:06 A.M. Central Daylight Time
Subj: Fwd: Confronting the Circularity Problem in Private Securities Litigation-lin...
Dear Professor Langevoort,
I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
I solicit any involvement you would care to undertake related to my objection. Please let me know if you are interested.
Thank you.
Sincerely,
Rob Shattuck

From: RDShatt@aol.com
To: langevdc@law.georgetown.edu
Sent: 2/5/2011 6:03:34 A.M. Central Daylight Time
Subj: Fwd: Confronting the Circularity Problem in Private Securities Litigation-lin...

Dear Professor Langevoort,


I sent an email to Professor Jill Fisch (appended below) in which I quoted the concluding paragraph from your individual versus entity liability article. I wanted to cc you on the email, and made a guess about your email address. That guess turned out wrong. Thank you for providing me your email address, so I am now able to complete my emailing.


Sincerely,

Rob Shattuck
From: langevdc@law.georgetown.edu
To: RDShatt@aol.com
Sent: 11/3/2012 9:06:15 A.M. Central Standard Time
Subj: RE: Confronting the Circularity Problem in Private Securities Litigation-lin...
I'm sure that you won't be the only one, but I limit my involvement in things like this.
Don Langevoort

From: RDShatt@aol.com
To: grundfest@stanford.edu, Cox@law.duke.edu, klacroix@oakbridgeins.com
Sent: 11/3/2012 8:40:36 A.M. Central Daylight Time
Subj: Fwd: Private Securities Litigation: Important Deterrent or Wasteful Churn?
Dear Professors Grundfest and Cox, Mr. LaCroix, and Mr. Coffey, (address for Mr. Coffey not yet found),
I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
I solicit any involvement you would care to undertake related to my objection. Please let me know if you are interested.
Thank you.
Sincerely,
Rob Shattuck
To: grundfest@stanford.edu, Cox@law.duke.edu, klacroix@oakbridgeins.com
Sent: 12/24/2010 5:30:08 A.M. Central Daylight Time
Subj: Private Securities Litigation: Important Deterrent or Wasteful Churn?


Dear Professors Grundfest and Cox, Mr. LaCroix, and Mr. Coffey (address for Mr. Coffey not yet found),


I have read with interest Mr. LaCroix's above referenced post in his blog. You may glean the extent of my interest from my own blog How To Combat Plaintiffs' Lawyers .


I would like to offer some comments.


First, some rhetorical and/or loaded questions: Who and what are the drivers and determinants of the state of the law? Is it plaintiffs' lawyers and their lobbying and other influence with lawmakers, judges and others? Is it judges who have done an adequate policy evaluation of their judicial actions and decisions, insofar as they have discretion regarding the same? Is it academics who have debated the way the law should be and who make recommendations about the same that are accepted by lawmakers and judges? Is it critics, such as The Wall Street Journal?


Also, insofar as plaintiffs' lawyers are the drivers and determinants. to what extent do they exert their influence to achieve a state of the law that benefits themselves to the detriment of the societal interest in how the law operates? How demanding should academics and citizens be of their lawmakers and judges that those persons exert great skepticism about any input the plaintiffs' lawyers have regarding how the law should be and give the plaintiffs' lawyers no benefit of the doubt, including, for example, not finding it an adequate justification that there is "some deterrent effect" from private securities litigation, or that a "private/public partnership" has performed better than "public" alone when there is a choice to beef up with more funding for the "public" effort?


I took particular note of Mr. LaCroix's statement that "there are a large number of sophisticated, well-informed and profit motivated institutional investors that continue to actively participate in securities litigation, some serving frequently as lead plaintiffs." The reason for my interest is that I was once notified of a class action that caused me to send scores of emails to governmental retirement plans and members of the National Institute of Pension Plan Administrators, asking why they weren't "screaming bloody murder." You may read the text of those emails here http://robertshattuck.blogspot.com/2008/11/why-arent-government-retirement-systems.html and here http://robertshattuck.blogspot.com/2008/11/why-arent-retirement-plan-trustees.html . I did not get a single response.
I did not think, at the time, about "pay to play" type stuff going on in securities class action litigation that could keep parties from screaming bloody murder. Trust The Wall Street Journal to enlighten me in February with this item Trial Lawyers Contribute, Shareholder Suits Follow .
On the question of whether individual contibution is needed in order to achieve a better deterrent effect, I have taken the tack of trying to introduce the subject to academics and other professionals in the business ethics field. I have done this mainly through an article I have written that you can find at this link: Does the Civil Liability System Undermine Business Ethics? I have made scant headway in interesting ethics professionals in the subject matter.
Thank you for reading this email.
Sincerely,
Rob Shattuck
From: RDShatt@aol.com
To: jcoffee@law.columbia.edu
Sent: 11/3/2012 7:53:11 A.M. Central Standard Time
Subj: FWD: May 22, 2008 Xerox Corporate Governance Committee meeting
Dear Professor Coffee,
I propose to file this amicus curiae objection in the settlement hearing that will be held in due course for the recently announced $2.4 billion settlement that Bank of America has agreed to regarding the Merrill Lynch acquisition that Bank of America made in 2008.
I solicit any involvement you would care to undertake related to my objection. Please let me know if you are interested.
Thank you.
Sincerely,
Rob Shattuck
From: RDShatt
To: jcoffee@law.columbia.edu
CC: Douglas.Marshall@xerox.com, JEskelsen@USChamber.com
Sent: 5/9/2008 10:50:14 A.M. Central Daylight Time
Subj: May 22, 2008 Xerox Corporate Governance Committee meeting

Dear Professor Coffee,


I have importuned that the Xerox Corporate Governance Committee put on the agenda for its May 22, 2008 meeting consideration (or reconsideration) of a proposed settlement in a class action securities lawsuit against Xerox. Besides other things revealed in the below is email correspondence about this matter, I have contacted the Institute for Legal Reform and was referred to an online paper (quoted below) in which your views are discussed about the "circularity" involved in cases such as the Xerox lawsuit.
I would like to solicit your views on some jurisprudential questions. Do you think there is any basis (e.g., due process, arbitrary loss shifting with no rational justification, other legal basis?) on which a judge could dismiss the lawsuit against Xerox? If there might such a basis, do you feel it has been adequately presented to a judge in a comparable lawsuit of which you are aware? Do you have any views about the propriety of Xerox directors approving Xerox entering into the proposed settlement agreement that gives net favorable treatment to some Xerox shareholders and bondholders and net unfavorable treatment to other Xerox shareholders and bondholders in an arguably arbitrary fashion? Is there a conflict for the plaintiffs' lawyers to represent both shareholders (and bondholders) who will have a net gain and also shareholders (and bondholders) who will have a net loss from the settlement? Do you believe there is a basis for Xerox requesting the court to include other Xerox shareholders and bondholders who are not in the plaintiff class who are also real parties in interest and who should be entitled to joined as parties in the lawsuit and be afforded legal representation?
As the below email correspondence indicates, I am trying to solicit a legal expert such as yourself to provide input to the Xerox Corporate Governance Committee (if Sandra Goldstein of Cravath is limited in the representation she is providing), and I would be excited if you were inclined to do that, either on a pro bono or paying basis (if Xerox or the independent directors were willing to retain you).
I very much look forward to hearing something from you in response to this email.
Thank you.
Sincerely,
Robert Shattuck

VI.  Judge and judiciary oriented organizations

 Communications with judge and judiciary oriented organizations relative to the Citigroup and Bank of America litigations can be found here.

Posted by at No comments:
Labels:
Subscribe to: Posts (Atom)