In the blockbuster movie Jaws, the shark seemed to bite just when everyone thought it was safe to go back in the water. Directors and officers today may well question whether the waters are safe for them. The Enron shareholder lawsuits live on, and we anticipate another significant Supreme Court opinion resulting from them next term. Meanwhile, the Securities and Exchange Commission continues to announce new options backdating investigations even as it files complaints arising from current investigations against directors and officers.

These days, companies and their directors and officers are also increasingly exposed to triple jeopardy–private securities class actions, SEC and Department of Justice investigations, and state regulatory proceedings. As the SEC and DOJ continue to pursue parallel investigations, directors and officers need to consider how corporate cooperation with the government, including waiver of attorney-client privilege, may impact them. For example, will having a deferred prosecution agreement with the DOJ make it more likely that a company’s directors and officers will be pursued?

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