– Reuters (paywall) reported that Boeing’s board has begun the search for a new leader at the company following the tenure of CEO Dave Calhoun, with many industry executives and analysts predicting it will seek an outside candidate.
Boeing on Monday announced a broader than expected shake-up, with Calhoun stepping down by year-end on the heels of the company’s commercial plane-making head and its chair. The new CEO will face challenges such as improving the company’s safety culture, addressing quality issues and regaining the trust of regulators, customers and the public.
– According to CNBC, Andy Bechtolsheim, co-founder of Sun Microsystems and Arista Networks, has reached a settlement with the SEC on insider trading charges that will cost him almost $1 mn and bars him from serving as a public company officer or director for five years. The charges against Bechtolsheim, who has an estimated net worth of more than $16 bn, relate to Cisco Systems’ acquisition of Acacia Communications in 2019. The SEC alleges that Bechtolsheim confidentially learned of an ‘impending acquisition’ and traded options of Acacia, netting him ‘combined illegal profits’ of more than $415,000 after the deal was made public the next day.
The SEC said Bechtolsheim settled its charges without admitting or denying the allegations against him and agreed to pay a fine of $923,740. He resigned as Arista’s chair and development chief in December but continues to serve as its chief architect.
‘While the SEC announcement did not involve any trading in Arista securities, Arista takes compliance with the company’s code of conduct and insider trading policy seriously,’ an Arista spokesperson said. ‘Arista will respond appropriately to the situation.’
Bechtolsheim’s attorneys didn’t respond to CNBC’s request for comment.
– The Walt Disney Company and a board appointed by Florida Governor Ron DeSantis reached a settlement regarding the governance of a special tax district, resetting a relationship between the state and one of its biggest employers, according to The Wall Street Journal (paywall). The company has been in a fight with the governor over laws targeting the district, which covers the land that houses Walt Disney World.
Disney had effective control over the district for decades. But after the company spoke out against Florida’s Parental Rights in Education law, known by opponents as the ‘Don’t Say Gay’ law, Florida’s Republican-led legislature ended Disney’s control of the district and gave the governor the ability to pick its supervisory board. In February last year, Disney rushed a 30-year land development plan to approval before the new board could be seated. Wednesday’s settlement effectively nullifies that agreement and forces Disney to revert to an earlier, less expansive development plan.
Jeff Vahle, president of Walt Disney World, said he’s pleased to end the litigation with the Central Florida Tourism Oversight District. ‘This agreement opens a new chapter of constructive engagement with the new leadership of the district and serves the interests of all parties,’ he said.
A spokesperson for DeSantis’ office said no corporation should be its own government.
– Reuters reported that according to a new study, US commercial litigation funders committed roughly 14 percent less capital to new deals in 2023. Companies that finance US commercial lawsuits in exchange for a portion of any recoveries committed $2.7 bn to new financing transactions last year, down from $3.2 bn in 2022, Westfleet Advisors said. The report noted that the 2023 results showed ‘an industry in a state of flux’.
The growth and success of the US litigation funding industry in recent years has led to calls from the US Chamber of Commerce and others for tighter regulation. Critics say the practice promotes unnecessary litigation and undermines transparency in the legal system. Supporters say it can level the playing field and promote access to justice.
– The WSJ reported that Laura Murphy, a US Department of Homeland Security policy adviser, said the Biden administration will expand a list of companies under an import ban due to their alleged ties to forced labor in China. It is a move that would intensify pressure on some corporate supply chains. Many more companies will be added to what is known as the Uyghur Forced Labor Prevention Act Entity List, Murphy said. ‘We’re really focused on enhancing and expanding the entity list. We expect many more entities to be coming in the next few months,’ she added.
– The SEC said it is looking for five candidates for appointment to its investor advisory committee. The committee was established under the Dodd-Frank Act to advise the commission, protect investor interests and promote the integrity of the securities marketplace. Committee members represent the interests of investors. The committee advises and consults with the commission on issues such as its regulatory priorities.
– Reuters said that according to a National Association for Law Placement (NALP) report, lateral hiring by law firms fell 35 percent in 2023, the second straight year that firms brought on fewer associates and partners from competitors. Law firms hired a median of four lateral attorneys per office in 2023, down from six in both 2022 and 2021, NALP found. The average number of lawyer laterals was 9.3 – a 42 percent decline from 15.9 in 2022. Both the median and average number of laterals for 2023 were the lowest since 2010, when the Great Recession significantly curtailed hiring, NALP said.
‘We can clearly see that the talent wars of 2021 led many firms to deviate in their growth strategies from what longer-term trends might have suggested,’ said NALP executive director Nikia Gray in a statement.
– CNBC reported that Norfolk Southern CEO Alan Shaw criticized Ancora Holdings, the activist investor engaged in a proxy fight with the railroad company’s board. ‘We’ve gone to the activist and offered a settlement – its responses have been unreasonable at the determination of our board,’ Shaw said. Norfolk Southern has faced scrutiny over the past year after one of its freight trains derailed in East Palestine, Ohio, in February 2023 and released toxic chemicals into the soil, water and air.
Ancora challenged Norfolk Southern in February, aiming to add eight directors to the board and remove Shaw as CEO. Shaw said the existing board is strong, and that it includes CEOs with ‘direct rail and transportation experience’, as well as a former admiral and rail-safety advocates. He added that the board offered Ancora ‘a couple’ of seats but suggested the activist investor was not amenable to the offering. According to Shaw, he’s kept promises he’s made in the wake of the derailment, saying Norfolk Southern’s safety has improved over the last year.
Ancora did not respond immediately to CNBC’s request for comment.
– FTX founder Sam Bankman-Fried was sentenced to 25 years in prison for fraud tied to the collapse of his digital exchange, the WSJ reported. A jury last year found Bankman-Fried guilty of stealing billions of dollars from FTX customers and defrauding investors and lenders to his crypto investment firm Alameda Research. US District Judge Lewis Kaplan, who also imposed more than $11 bn in financial penalties, said he weighed ‘the enormous harm [Bankman-Fried] did, the brazenness of his actions, his exceptional flexibility with the truth and his apparent lack of any real remorse.’
Before he was sentenced, Bankman-Fried told the judge he was haunted every day by what he had thrown away. ‘I was responsible for FTX, and its collapse is on me,’ he said. A lot of people were let down, he said, adding: ‘I’m sorry about that.’
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
