Dangerous Times for General Counsel? Maybe Not.

The Harvard Law School Corporate Governance Blog publishes a post addressing new concerns about stepped-up Justice Department enforcement against General Counsel and other legal officers at public companies.

Data from SM Litigator's SEC Enforcement Actions database suggests the trend may not be that dire for GCs. Our data indicates that the SEC has brought actions against 11 GCs in 2007, compared to 7 in 2006, and 13 in 2005. So there is not much of a discernible trend.

The only difference we can spot is that the nature of the violations has changed. In 2005 and 2006, there were a number of violations for Sale of Securities and Late Trading/Market Timing. In 2007, the violations have tended more toward Accounting/Auditing, along with options backdating.

So what is the source of the fuss? Probably that options backdating scandals have pulled more prominent public companies into the spotlight and put their GCs more at risk.