Throughout the week over at Securities Docket I highlight the most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation. Here is a digest of my picks for the week ending February 22.

Now Up: The “Third Wave” of Executive Compensation LitigationKevin LaCroix, The D & O Diary

The first wave of “say on pay” litigation involved lawsuits brought by shareholders following a negative advisory say on pay vote under the Dodd-Frank Act. The second wave of say on pay litigation, which picked up in 2012, involved plaintiffs' efforts to enjoin upcoming shareholder votes on compensation or employee share plans on the grounds of inadequate or insufficient proxy disclosure.

Now there is a “third wave” of executive compensation litigation, according to a February 21, 2013 memo from the Pillsbury Winthrop Shaw Pittman law firm entitled “Proxy Season Brings a Third Wave of ‘Gotcha' Shareholder Litigation”. In these third wave lawsuits, the plaintiffs allege that companies issued stock options or restricted stock units to executives in amounts that exceed the limits of the companies' stock plans. According to the law firm memo, this latest litigation wave “has not crested yet.”

Mary Jo White's Latest Conflict of Interest

Jonathan Weil, Bloomberg

White is the white-collar defense lawyer and former U.S. attorney nominated by President Barack Obama to lead the SEC. Her financial disclosures say that upon leaving New York-based Debevoise & Plimpton LLP, the law firm will give her $42,500 a month in retirement pay for life, or more than $500,000 a year.

This means she has a direct interest in Debevoise's future profits, and therefore an incentive to help make sure only good things come the firm's way. Debevoise's partner-retirement plan is unfunded, meaning the firm pays benefits from its continuing business operations.

Sellouts run the SEC, like everything else

Al Lewis, MarketWatch

We are a nation of sellouts. So it is probably not alarming that the SEC — the agency that's supposed to keep businesses from cheating each other and the investing public — is filled with sellouts, too.

Sellouts in Washington are so common they're not even called sellouts anymore. They're just professionals passing through a revolving door. They go from regulator to the regulated. And it's not like switching teams as a Cold War spy. It's perfectly legal and socially acceptable most of the time.

Empowering employees & why an anti-bribery policy makes life easier for everyone

Barry Vitou & Richard Kovalevsky QC, thebriberyact.com

It is often assumed that rolling out an anti bribery compliance policy in a high risk jurisdiction will be met with derision by the locals: “there's no point – it's just the way you have to do business if you want to get anything done here”.

But you'd be wrong…. Why? Because the local employees don't like being placed in a situation which leaves them open to having their arms twisted by colleagues, clients and officials to doing something which violates a corporate anti-bribery policy (and local law) because of wishy washy implementation.

Mary Jo White at the S.E.C.

OpEd, The New York Times

Most important, at the confirmation hearing Ms. White will have to explain her own goals, values and motives in taking the top S.E.C. job, including her regulatory priorities and her specific views on pending rules, including the Volcker rule to constrain bank speculation and rules on executive pay.

Her qualities of toughness, tenacity and aggressiveness are just what the S.E.C. needs in a leader. The overarching question she must be asked — and that she must answer — is how she will use those qualities to advance the S.E.C.'s mission, which is to protect individual investors by ensuring that markets are transparent, well regulated and vigorously policed.

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