Ethics of stock option backdating
So, to try to ensure that this does not happen, the government swings too far in the other direction; it makes its investigations too broad and sweeps into its grasp many companies and individuals who should not be investigated at all.
This (too) broad a sweep causes individuals and companies to endure a tremendous amount of needless stress, hardship and expense.
Unfortunately, it does not appear that this tactic by the government will disappear anytime soon (in fact, this tactic has probably become engrained into the government’s playbook as a result of the recent financial meltdown and the cry for prosecutions of Wall Street bankers).
The best defense to these overbroad investigations is an aggressive offense.
Ruehle asserted that the attorney-client privilege protected his conversations with Irell from disclosures to third parties without his consent.
At its peak, the government put approximately 123 companies under investigation for alleged accounting violations in the backdating and pricing of stock options given as compensation to company executives.
The investigations cost companies hundreds of thousands of dollars to defend, and resulted in the firing of several high-level executives.
Another, that the company and the law firm should have been more cognizant of possible conflicts.
It was only after Irell interviewed Ruehle that they obtained separate counsel for him.