Worldwide: Governance & Securities Law Focus: Asia Edition, April 2015

In this newsletter, we provide a snapshot of the principal US, European and selected international governance and securities law developments of interest to corporates and financial institutions.

US DEVELOPMENTS

SEC Developments

NYSE Amends Late Filer Rule

Effective 2 March 2015, the New York Stock Exchange (the "NYSE") amended its rules applicable to NYSE listed companies that do not timely file their periodic reports with the US Securities and Exchange Commission ("SEC").

Previously, a listed company was deemed noncompliant with the NYSE's late filer rule and subjected to a maximum 12-month cure period only if it failed to timely file its annual report on Form 10-K, Form 20-F or Form 40-F, as applicable. Under the late filer rule as recently amended, however, the NYSE will also subject a listed company to these procedures if (i) it fails to timely file its quarterly report on Form 10-Q (for US domestic issuers) or (ii) an annual report or Form 10-Q is defective in certain material respects.

The specific changes to the NYSE's late filer rule include:

  • The rule as amended has expanded to cover quarterly reports on Form 10-Q in addition to annual reports (Forms 10-K, 20-F, 40-F or N-CSR). Accordingly, any listed company that fails to file a quarterly or annual report by the date on which it is due to be filed with the SEC will be subject to the compliance procedures set forth in Section 802.01E of the NYSE Listed Company Manual.
  • The rule as amended has expanded to cover annual or quarterly reports that are deemed to be defective either at the time of their filing with the SEC or subsequently. Among the reasons that a periodic report may be deemed defective are: (i) an annual report that was filed without a financial statement audit report from its independent auditor for any or all periods included in the report, (ii) a company's independent auditor subsequently withdraws its audit report from a previously filed report or (iii) a company discloses that previously filed financial statements should no longer be relied upon. If a listed company's periodic report is deemed to be defective for one of the foregoing reasons, such company will be subject to the compliance procedures set forth in Section 802.01E of the NYSE Listed Company Manual.
  • Listed companies will have a maximum of 12 months to cure a delinquent or defective filing and regain compliance. In order to be deemed back in compliance, listed companies must have cured the initial delinquent or defective filing and be current with all subsequent filings within the maximum 12-month cure period.

The NYSE's notification to NYSE listed company executives can be found here:

https://www.nyse.com/publicdocs/nyse/regulation/nyse/NYSE_Late_Filer_Rule_20150305.pdf.

Flexibility for Debt Refinancings – New SEC No-Action Letter

On 23 January 2015, the SEC staff issued a no-action letter that will allow some companies to refinance their debt using tender and exchange offers shorter than the 20 business days required in the SEC tender offer rules. The letter extends to high-yield debt tender offers and to exchange offers pre-existing guidance that allowed shorter tender offers for investment grade debt. The letter also imposes a number of new limitations on and requirements for shorter tender offers.

The no-action letter gives limited relief from the 20-business day requirement for "any and all" self-tenders for non-convertible debt, but partial tenders do not benefit. Tenders as part of restructurings and tenders with exit consents will also not benefit.

Previous no-action letters allowed 7-10 calendar day issuer self-tenders for any and all non-convertible investment grade debt securities. The new no-action letter uses five business days instead, but adds a number of new requirements and limitations.

The no-action letter allows five business day self-tenders for any and all non-convertible debt securities subject to the same restrictions as investment grade debt. However, high-yield debt issuers that want to use the shorter tender period will not be able to strip covenants with a concurrent consent solicitation.

Five-business day exchange offers are now possible for a pure refinancing where the type and features of the debt do not change.

The no-action letter is available at:

http://www.sec.gov/divisions/corpfin/cf-noaction/2015/abbreviated-offers-debt-securities012315-sec14.pdf.

Our related client publication is available at:

http://www.shearman.com/en/newsinsights/publications/2015/02/flexibility-for-debt-refinancings-new-sec.

SEC Charges Corporate Insiders for Failing to Update Disclosures Involving "Going Private" Transactions

US securities laws require beneficial owners of more than 5% of the stock of a public reporting company to promptly file an amendment when there is a material change in the facts previously reported by them on Schedule 13D, commonly referred to as a "beneficial ownership report". The disclosure requirements include plans or proposals that would result in certain transactions, such as a going private transaction.

On 13 March 2015, the SEC charged eight officers, directors or major shareholders for failing to update their stock ownership disclosures to reflect material changes, including steps to take the companies private. Each of the respondents, without admitting or denying the SEC's allegations, agreed to settle the proceedings by paying a financial penalty.

While an acquisition or disposition of 1% or more of the stock of an issuer is deemed to be a "material" change in the facts set forth in Schedule 13D requiring an amendment, the SEC's orders make clear its position that an amendment is also required in order to update qualitative disclosures regarding the beneficial owner's plans for its investment. In particular, the SEC has stated that generic disclosures that simply reserve the right to engage in certain corporate transactions do not suffice when there are material changes to those plans, including actions to take a company private.

The SEC's orders find that the respondents took steps to advance undisclosed plans to effect going private transactions. Some determined the form of the transaction to take the company private, obtained waivers from preferred shareholders and assisted with shareholder vote projections, while others informed company management of their intention to privatize the company and formed a consortium of shareholders to participate in the going private transaction. As described in the SEC orders, each respective respondent took a series of significant steps that, when viewed together, resulted in a material change from the disclosures that each had previously made in their Schedule 13D filings.

Public companies and other filers should make certain that they have robust policies and procedures in place to ensure that their filings comply with all applicable SEC disclosure requirements and are made within the required deadlines. Companies should also have policies requiring compliance with reporting obligations by their officers, directors and major shareholders, particularly if the company has agreed to provide assistance to insiders. Public companies should view the announcement of these enforcement actions as an opportunity to remind their officers, directors and major shareholders of their reporting obligations.

The related SEC press release is available at:

http://www.sec.gov/news/pressrelease/2015-47.html.

Securities Enforcement 2014 Year-End Review and Focus for 2015

In March 2015, in testimony before the US Congress, the Director of the SEC's Division of Enforcement outlined the SEC's enforcement priorities, which include the following:

  • financial reporting, accounting and disclosure;
  • investment advisers;
  • market structure, exchanges and broker-dealers;
  • municipal securities and public pensions;
  • insider trading;
  • microcap fraud/pyramid schemes;
  • complex financial instruments;
  • gatekeepers; and
  • the Foreign Corrupt Practices Act ("FCPA").

For further information, the Director's testimony can be found here:

http://www.sec.gov/news/testimony/031915-test.html.

In January 2015, we published our Securities Enforcement 2014 Year-End Review.

Fiscal year 2014 proved to be another eventful and record-breaking year for the SEC's Division of Enforcement. Indeed, the SEC recently described the fiscal year, which ended on 30 September 2014, as a "very strong year" for enforcement, and by certain measures it certainly was. This description of the SEC's performance and approach, however, is not without controversy as various aspects of the SEC's enforcement approach have been criticised in some quarters, including by certain of the SEC's own commissioners.

Our Securities Enforcement 2014 Year-End Review is available at:

http://www.shearman.com/en/newsinsights/publications/2015/01/securities-enforcement-2014-year-end-review.

Noteworthy US Securities Law Litigation

Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund: US Supreme Court Sets Standard for Opinion Statement Liability Under Section 11

On 24 March 2015, in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, a widely anticipated decision, the US Supreme Court resolved a conflict among the federal appellate courts concerning the standard of liability that applies to statements of opinion under Section 11 of the Securities Act of 1933. The Court held that for a statement of opinion to constitute an affirmative misstatement under Section 11 (which applies to statements made in offering materials), it must be not only "objectively false" in the sense that the opinion is incorrect, but also "subjectively false" in that the speaker did not honestly believe the statement to be true when made. The Court separately held that the omission of information, where that omission causes an opinion to be misleading, can give rise to liability under Section 11 if the omitted information is contrary to what a reasonable investor would assume was the basis for the stated opinion, even if the opinion was not subjectively false.

Omnicare is the US's largest provider of pharmacy services to nursing homes. The plaintiffs' claims stemmed from statements in a registration statement for a public stock offering that the company "believe[d]" its contractual arrangements were in compliance with law. The plaintiffs claimed these opinions were false because the company allegedly engaged in illegal kickback schemes with pharmaceutical manufacturers and submitted false claims for reimbursement to governmental medical programs.

The plaintiffs in Omnicare conceded that the company's statements of opinion concerning legal compliance were honestly held beliefs, but argued that because Section 11 does not impose any requirement to show a defendant's intent, the fact that the opinion statements were "objectively false" was enough to hold the company liable. The Court, disagreeing, explained that Section 11 imposes liability for "untrue statement[s] of . . . fact" and the factual component of an opinion is that "the speaker actually holds the stated belief." The mere fact that the opinion turns out to be incorrect is not sufficient to show an "untrue statement of material fact" under Section 11. The plaintiffs' claim that Omnicare's opinions about legal compliance were misstatements was therefore insufficient.

The Court went on to rule, however, that the omission of factual information can lead to liability for a statement of opinion under Section 11's prohibition on omissions that render affirmative statements misleading, even if the opinion was honestly held. Because "a reasonable investor may . . . understand an opinion statement to convey facts about how the speaker has formed an opinion," an omission concerning material facts "going to the basis for the issuer's opinion" might give rise to liability if that omission makes the opinion statement misleading. But not all facts going against an opinion need to be disclosed because "[r]easonable investors understand that opinions sometimes rest on a weighing of competing facts." Rather, the assessment about whether an omission is actionable must be done on a case-by-case basis to determine whether the omission genuinely "call[s] into question the issuer's basis for offering the opinion."

The Court's ruling in Omnicare that plaintiffs must show statements of opinion to be subjectively false under Section 11 clarifies this previously uncertain point of law. On the other hand, the Court's ruling that certain omissions can render an opinion statement misleading, even if the statement is an honestly held belief, is likely to create a new avenue for plaintiffs to raise securities claims. The plaintiffs' bar will undoubtedly file additional cases in this area, which in turn will illuminate how lower courts will interpret this new rule.

For more information on the Omnicare decision, please see our client note at:

http://www.shearman.com/en/newsinsights/publications/2015/03/opinion-statement-liability-in-omnicare-ruling.

United States v. Georgiou: Court Holds Foreign Entities' Transactions for Securities of US Issuer Through US Market-Maker Are Domestic Transactions Under Section 10(b)

On 20 January 2015, the federal appellate court based in Pennsylvania addressed whether a criminal defendant based outside the United States could be subject to liability for manipulative securities transactions under Section 10(b) of the Securities and Exchange Act of 1934 in light of the US Supreme Court's landmark decision in Morrison v. National Australia Bank precluding extraterritorial applications of Section 10(b). In Morrison, the Supreme Court ruled that Section 10(b) does not apply extraterritorially to so-called "foreign-cubed" claims―i.e., claims where "(1) foreign plaintiffs [are] suing (2) a foreign issuer in an American court for violations of American securities laws based on securities transactions in (3) foreign countries." The court in Georgiou addressed what it described as a question of first impression: "whether the purchases and sales of securities issued by U.S. companies through U.S. market makers acting as intermediaries for foreign entities constitute 'domestic transactions' under Morrison."

The defendant Georgiou was convicted of securities fraud, conspiracy to defraud the US and wire fraud, sentenced to 300 months of prison time, and ordered to pay over $55 million in restitution. These charges were based on his manipulation of the markets for four stocks by artificially inflating their share prices, selling shares at inflated prices and using shares as collateral to fraudulently borrow funds on margin.

In Morrison, the Court limited the application of Section 10(b) to transactions involving the purchase or sale of a security that (1) is "listed on an American stock exchange" or (2) takes place "in the United States." The Court here agreed with Georgiou's argument that because all of the stocks at issue were listed and traded in the over-the-counter market, they did not qualify as being listed on "national securities exchanges."

The Court held, however, that the transactions at issue qualified under Morrison's second prong, for transactions that take place in the US. Adopting the approach taken by courts in several other jurisdictions, the Court held that the location of a securities transaction is determined by the place where "irrevocable liability to carry out the transaction" is incurred. Factors relevant to "irrevocable liability" include the location of contract formation or execution, order placement, passing of title, the exchange of funds and the location of the defendant's business. On the other hand, marketing in the US, a party's US residency or citizenship, and the deception's origination in the US have been held to be insufficient to subject a defendant to liability under Section 10(b). Two key factors that distinguished this case from Morrison were that the transactions here involved shares of US companies and that at least one transaction (and likely many) for each of the stocks was executed through a US market maker (sometimes at the defendant's direction).

While the Court held that a transaction's being conducted in the US over-the-counter market does not subject the transaction to Section 10(b), it noted that courts in other jurisdictions have suggested otherwise. How a court assesses this factor will therefore depend on the jurisdiction in which the case is litigated. On the other hand, the Court's adoption of the "irrevocable liability" test goes along with courts in several other jurisdictions that have already taken this approach and thus reflects a more common standard for how Morrison is applied. More fundamentally, as we have explained in past editions of this newsletter, courts consider context-specific factors rather than taking a mechanical approach to applying the standard set forth in Morrison. The overall connection of the transactions to the US played an important role in the Court's decision here and should do so in future cases as well.

Fire and Police Pension Association of Colorado v. Abiomed, Inc.: Non-Compliance with Food and Drug Laws Does Not Necessarily Constitute Violation of Securities Law

On 6 February 2015, in Fire and Police Pension Association of Colorado v. Abiomed, Inc., the federal appellate court based in Massachusetts addressed claims that a medical device manufacturer and some of its high-level executives violated Section 10(b) of the Securities and Exchange Act of 1934 based on alleged misrepresentations and omissions related to the company's marketing practices. The Court affirmed the lower court's dismissal of the plaintiffs' claims because, even if the defendants' actions violated federal regulations prohibiting "off label marketing" (the marketing of medical devices and pharmaceutical products for uses that have not been approved by the Food and Drug Administration (the "FDA")), "this case is not about whether or not defendants violated [a federal statute or regulations]. It concerns alleged violations of securities laws," which the plaintiffs failed to properly allege.

According to the plaintiffs, Abiomed made several material misstatements and omissions concerning the company's illegal off-label marketing of its core product, a micro heart pump, and its failure to address the FDA's concerns related to these practices. The Court concluded that the plaintiffs failed to allege with particularity that the defendants acted with the requisite level of intent concerning these statements. As the Court reasoned, "[t]he question of whether a plaintiff has pled . . . a strong inference of scienter [fraudulent intent] has an obvious connection to the question of" the materiality of the omitted information. If a fact is only arguably material or its materiality is of only marginal import, that detracts from the assertion that the defendants acted with scienter. Because the materiality of omitted information concerning the company's marketing practices "depend[ed] on a long chain of [unsubstantiated] inferences" concerning an impact on the company's results, much less its share price, that "marginal materiality . . . weigh[ed] against" a finding that the defendant possessed the requisite level of intent.

The plaintiffs' argument was further weakened by warnings that the company provided about possible regulatory enforcement it might face and the company's public disclosure that the FDA was concerned about the company's marketing practices. Abiomed was not required to go further and admit wrongdoing related to pending governmental inquiries because "[t]here must be some room for give and take between a regulated entity and its regulator." The Court here also held that even if evidence that the company did not take the FDA's warnings seriously enough "plausibly suggest[s] that Abiomed was acting improperly, [that does] not show" that the defendants acted with scienter.

Overall, the Court explained, "[n]ot all claims of wrongdoing by a company make out a viable claim that the company has committed securities fraud. This case is an example." This case provides a useful illustration (at least within the jurisdiction of this Court) of how potential securities liability related to legal concerns about a company's underlying practices can be addressed with proper disclosures explaining the situation to investors and warning of the potential risks associated with the activity at issue.

Recent SEC/DOJ Enforcement Matters

United States of America v. Fokker Services B.V., No 14-cr-121 (D.D.C.): Federal Judge Rejects Deferred Prosecution Agreement Related to Export Violations as "Overly Lenient"

On 5 February 2015, a judge in the US federal district court for the District of Columbia refused to approve a deferred prosecution agreement ("DPA") between Fokker Services B.V. and the US Department of Justice (the "DOJ"). The agreement related to charges that the company violated sanctions restricting the exporting of goods and services to Iran, Sudan and Burma. While the Court acknowledged that its supervisory powers over such agreements "are to be exercised 'sparingly'" and that this was "not a typical case for the use of such powers," it rejected the DPA because it found the agreement to be "grossly disproportionate to the gravity of Fokker Services' conduct."

Fokker Services is a Dutch aerospace services provider. It was accused of violating US export laws and sanction regulations from 2005 until 2010 by participating in the export of over 1,153 shipments of aircraft parts with an origin in the US, primarily to Iran (but also to Burma and Sudan). The company was alleged to have deliberately taken steps, with the knowledge of high-level management, to conceal its violations of these laws. In 2010, the company self-reported these activities to the US government and cooperated with an effort to remedy its compliance flaws. The DPA was set to last for 18 months and required the company to pay $21 million (including amounts to other US regulators), accept responsibility for its violations, continue to cooperate with US authorities, implement a compliance program and comply with US export laws in the future. The Court reviewed the DPA under the statutory requirement that the Court approve the parties' requested delay of a trial date, as well as the Court's inherent supervisory powers.

While the government could have exercised its discretion not to prosecute the case at all, once it chose to charge the company criminally and seek court approval of its agreement, the Court deemed itself duty-bound to consider whether approval was appropriate. The Court found the amount of the company's fine (which was equal to the amount of its ill-gotten revenue), the DPA's relatively short length, the fact that no individuals were charged, and the lack of independent oversight to be factors that made the DPA inadequate in light of the company's "egregious conduct" of knowingly engaging in a lengthy conspiracy to hide violations of export laws in a way that implicated serious national security and anti-terrorism concerns related to Iran. The Court stated that it would be open to considering a modified agreement, but its decision is currently being appealed to the federal appellate court in the District of Columbia.

We previously wrote in this newsletter (in the second quarter of 2014) about SEC v. Citigroup Global Markets, Inc., where a different appellate court reversed the lower court's refusal to approve a civil settlement between the SEC and a financial institution because of the limited nature of a court's review of such agreements. It will be informative to observe whether the appellate court here agrees with the district court's rejection of the parties' DPA or, rather, determines that here too the district court overstepped its bounds by becoming too involved in the terms of an independent agreement between a private party and government regulator. If the appellate court upholds the disapproval of the DPA here, the district court's observations about what was deficient with the agreement might provide a roadmap for what parties can consider including in future agreements―at least within the District of Columbia and in scenarios raising the type of national security concerns at issue here.

In the Matter of William Slater, CPA and Peter E. Williams, III, Administrative Proceeding File No. 3-16381: CEOs and CFOs Are Required to Return Payments From When Company Materially Misstated Financial Results Even if They Did Not Participate in the Fraud

On 10 February 2015, the SEC reached a settlement with two former chief financial officers of Saba Software, Inc., related to materially false financial results that the company reported over a four-year period related to conduct spanning late 2007 until early 2012. The CFOs were required to forfeit approximately $500,000 combined to repay the company their bonuses and profits from sales of the company's stock from the year following the first public issuance or filing with the SEC of each financial reporting misstatement. The SEC explained that the provision of the Sarbanes-Oxley Act at issue here requires these payments even where the officers were not involved in the misconduct at issue.

Saba Software provides cloud-based computer services. Approximately one third of the company's revenue comes from professional services, including customer-facing consultants in North America and Europe and consultants based in India that assist these customer-facing employees at a lower cost. According to the SEC settlement, employees in India billed for professional services in advance of when they were performed in order to accelerate revenue recognition and meet quarterly targets (pre-booking) and both sets of employees failed to report time in excess of what was allotted in order to conceal budget overruns (under-booking). Because of these accounting errors, the company was required to calculate its revenue in a different manner that did not depend on hourly billing and to restate its financial results for 2008 through 2012. These pending restated results, amounting to approximately $70 million total, will show that the company overstated gross revenue and profit by more than 5% annually from 2008 through 2011 and that its inflated revenue sometimes allowed the company to meet quarterly analyst expectations or avoid reporting an annual net loss.

Last year, Saba Software, the two vice presidents that were responsible for the improper accounting practices and the CEO reached settlements with the SEC. The CFOs that reached the current settlement, like the CEO, were required to repay funds even though they were not personally charged with any misconduct because the Sarbanes-Oxley Act requires the CEO and CFO of any issuer that is "required to prepare an accounting restatement due to the material noncompliance of the issuer, as a result of misconduct, with any financial reporting requirement under the securities laws" to reimburse the issuer for the amounts at issue here. According to the SEC, this provision applies to these high-level officers even if they did not participate in the misconduct because the improper activity still occurred "on their watch."

Commerzbank AG, Schlumberger Oilfield Holdings, Ltd. and PayPal, Inc. Reach Regulatory Settlements Related to Allegations of Economic Sanctions, Bank Secrecy Act and Anti-Money Laundering Violations

In March 2015, various US regulatory agencies reached settlements with Commerzbank AG ("Commerzbank"), Schlumberger Oilfield Holdings, Ltd. ("Schlumberger"), and PayPal, Inc. ("PayPal") related to claims that these companies violated laws and regulations prohibiting transactions involving certain foreign countries or individuals. While each action dealt with its own unique circumstances, there are also common themes among these matters that highlight the US government's increased regulation of prohibited transactions with foreign parties.

On 12 March 2015, Commerzbank reached a $1.45 billion settlement with several criminal and civil governmental agencies, including the DOJ, the US Treasury Department's Office of Foreign Assets Control ("OFAC"), the New York State Department of Financial Services ("DFS"), and other federal and state agencies. Commerzbank, a German bank, was accused of violating economic sanctions regulations by conducting approximately 60,000 transactions worth over $253 billion through Commerzbank's New York branch on behalf of Iranian and Sudanese entities from 2002 to 2008. Commerzbank was accused of several practices in which it concealed the involvement of prohibited parties. In addition, Commerzbank was alleged to have violated the Bank Secrecy Act by failing to comply with anti-money laundering ("AML") regulations requiring the monitoring, investigation, and reporting of certain suspicious transactions. These alleged violations related to "correspondent banking" practices, whereby a party conducts transactions through an intermediary bank that makes it more difficult to ascertain the origin or ultimate beneficiary of a transaction, and other types of suspicious activity. Commerzbank resolved these claims through deferred prosecution agreements or consent orders with the regulators. In addition to the payment described above, some of these agreements held individual employees responsible for violations, required substantial remedial measures and imposed an independent monitor to review the compliance of the company's New York branch with the laws and regulations at issue. While Commerzbank admitted to certain underlying violations, it did not plead guilty to any criminal violations.

On 25 March 2015, Schlumberger, an oilfield services company, pleaded guilty and agreed with the DOJ and other governmental agencies to pay an approximately $238 million penalty (including a record $155 million criminal fine) for engaging in business with Iran and Sudan and enabling others to do the same. Schlumberger pleaded guilty to willfully violating US sanctions programs through deliberate steps to conceal its US business unit's dealings with Iran and Sudan by disguising communications and evading the company's internal programs checking for such activity. The company also agreed to a three-year probationary period and to continue to cooperate with the government. In addition, Schlumberger's parent company agreed to several conditions during the probationary period, including continuing to not operate in Iran and Sudan, hiring an independent consultant to review compliance policies, and reporting compliance-related information to the government.

On 23 March 2015, PayPal reached a settlement with OFAC related to transactions that the company processed allegedly in violation of US sanctions programs related to Cuba, Iran, and Sudan, as well as sanctions covering individuals on OFAC's Specifically Designated Nationals ("SDN") list naming particular people subject to sanctions. OFAC alleged that PayPal should have discovered the involvement of prohibited parties based on language in transaction documents. PayPal was also alleged to have failed to investigate several instances where its screening software detected SDN transactions. PayPal's agreement with OFAC covers almost 500 prohibited transactions worth approximately $44,000. While most of these alleged violations were deemed "non-egregious," OFAC considered the SDN claims to be egregious and therefore subject to a $17 million penalty for transactions totaling a mere $7,000. PayPal agreed to pay $7.66 million in the settlement and did not admit or deny any of OFAC's allegations.

While each of these three regulatory actions involves its own set of unique facts, including different types of transactions, companies in different lines of business and connections to the US and varying levels of severity, they also contain common elements. These matters show that US regulatory agencies actively investigate and enforce potential violations of US restrictions on transactions involving prohibited foreign countries and parties. These actions also show that US governmental agencies pursue these actions even against foreign companies that have only a portion of their operations in the US. In addition, these three agreements show that more serious violations (such as consciously ignoring or deliberately concealing prohibited transactions in order to evade US sanctions), generally call for larger financial penalties and more extensive remedial measures for a settlement to be reached. Some of these settlement agreements are subject to court approval. As discussed concerning the Fokker Services action above, the extent of remediation in a regulatory settlement relative to the severity of the government's allegations might impact whether a court will approve the terms of the agreement.

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Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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