The Business Law Briefsm (March 1, 2003)

1. SEC Shortens Disclosure Time for Insider Trading from 40 days to 2 days.
   As part of its new regulations under the Sarbanes-Oxley Act, the time by which insider trading must be disclosed to the Securities and Exchange Commission (SEC) has been shortened from 40 days to 2 days. All you need, according to this article are simple Web tools and email, but the only way to be sure of timely disclosure is to automate the process completely. From law.com.
2. Attorney-Client Privilege I: SEC's Attack on the Attorney-Client Privilege: If at First You Don't Succeed....
   In response to the outcry from the practicing Bar that the "noisy withdrawal" provisions of its proposed rule 307 under the Sarbanes-Oxley Act would result in forcing attorneys to breach the attorney-client privilege, the SEC has now proposed an alternative (see Part III C) which would require the company, rather than the attorney, to report any dispute resulting in the attorney's withdrawal.
3. Attorney-Client Privilege II: DOJ to Business: Forget your Lawyer, and We'll Go Easy on You.
   Even as corporate attorneys and their clients were breathing a sigh of relief at the apparent withdrawal of the SEC's "noisy withdrawal" requirements (see above), the Department of Justice (DOJ) issued new guidelines for business prosecutions against businesses. "In determining whether to charge a corporation," the guidelines read, "the prosecutor may consider the corporation's willingness to identify the culprits within the corporation, including senior executives; to make witnesses available; to disclose the complete results of its internal investigation; and to waive attorney-client and work-product protection." As reported by law.com.
4. Uniform Law Group Withdraws Resolution Asking ABA to Approve UCITA.
   In the face of almost certain defeat, the National Conference of Commissioners on Uniform State Laws (NCCUSL) withdrew its resolution before the American Bar Association (ABA), asking the ABA's approval and endorsement of the controversial legislation. The draft uniform law governing the sale of software has been attacked as heavily biased in favor of computer software makers. Among other provisions, the draft legislation prohibited a consumer from complaining that software does not work, and would have enabled software manufacturers to remotely turn off a consumer's software. Despite attempts to modify the law in August, 2002, to make it more palatable, six separate sections of the ABA had failed to approve the draft legislation before the ABA's mid-year meeting. As reported at itworld.com
5. Small Businesses Worry About Burden of Online Sales Tax.
   Reacting to the recent news of the agreement by 38 states and the District of Columbia on a sales tax plan for online sales, small businesses worry that such a tax would be extremely complicated and overly burdensome, especially for small businesses. Presently, the law is that businesses must collect sales tax only on internet sales where the business has a physical presence in the same state as the buyer. But the agreement and proposed new legislation under the Streamlined Sales Tax System could change that, requiring, for example, a small business doing business in 45 states through its website to fill out 45 separate forms, and mail separate checks to each of 45 states. As reported at washingtonpost.com
6. Ten Comments Over a Period of Months Not Sufficient for Sexual Harassment Claim.
   Although her boss made 10 comments over a period of months about her appearance, some of which were sexual, plaintiff-employee's claim of sexual harassment was defeated, and it was proper for the Court to award Summary Judgment in favor of the defendant employer. Moreover, 10 comments over a period of months was insufficient to establish a "hostile working environment." Rogers vs. City of Chicago, No. 02-1211 (2/26/03). Appeal, N.D. Ill., E.Div. Aff’d.
7. Intuit I: Intuit Plants Trojan Horse in TurboTax Software Program.
   In an effort to prevent its users from copying its popular tax preparation software, TurboTax, Intuit, in its 2002 edition, implanted a Trojan Horse and possible spyware program. Once installed, the Trojan Horse runs continuously, even when TurboTax is not being used, and often interferes with other computer operations, including other copying functions. Intuit did not tell its customers about the program, or its continuous operation. But the tech community found out... As reported by xenky.com
8. Intuit II: Intuit Apologizes for TurboTax Performance Problems, and Hires an Independent Lab.
   Responding to its customers' concerns, Intuit apologized for any TurboTax performance problems (but not for the Trojan Horse), and hired an independent lab to test the software and investigate consumer complaints. The results of the investigation are in, and according to the report, "the software does not negatively impact computer performance or compromise customer privacy."
9. Coming Soon: Corporate Instant Messaging.
   In just a few weeks, Sun, Microsoft and Yahoo are all expected to release instant messaging (IM) software for use in a corporate setting. As reported by internetwk.com
10. Print from Your Cell Phone?
    Nokia will soon make it happen. As reported by msnbc.com

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