But we had obtained professional/legal advice!

Aiman Nariman Mohd‐Sulaiman

Journal of Financial Crime, 2013, vol. 20, issue 3, 312-323

Abstract: Purpose - In recent enforcement actions by several capital market regulators in some common law jurisdictions, the issue of directors' reliance on legal advice in relation to compliance with their statutory duties has been raised. This paper aims to discuss the dilemma faced by directors and regulators in assessing the extent to which reliance on legal advice can provide sufficient protection against allegation of breach of directors' duties and the disclosure obligation. Design/methodology/approach - This paper discusses recent case studies that highlight the often conflicting regulatory stance. Findings - These cases indicate that the disclosure conundrum is a real challenge to regulators and directors alike. These enforcement activities have resulted in mixed views as to whether these decisions have rightly upheld the standard of care expected to be exercised by directors or are unduly burdensome and not pragmatic for honest and well‐meaning directors. Research limitations/implications - The legal position is still evolving in view of the numerous regulatory actions in various jurisdictions regarding financial reporting and disclosure obligation of directors and corporations. Originality/value - Given the numerous disclosure and reporting obligations that a listed company must comply with and the regulatory enforcement actions that may be taken against the directors, it is important for directors to understand the implication of this case and similar enforcement activities on directors' oversight duty.

Keywords: Duty of care; Skill and diligence; Reliance on legal advice; Business judgment rule; Disclosure obligation; Legal advice; Disclosure (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jfcpps:jfc-03-2013-0015

DOI: 10.1108/JFC-03-2013-0015

Access Statistics for this article

Journal of Financial Crime is currently edited by Dr Li Hong Xing and Prof Barry Rider

More articles in Journal of Financial Crime from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().