JOINT CONFERENCE OF THE AMERICAN BAR ASSOCIATION & ISRAEL BAR ASSOCIATION

1. JOINT CONFERENCE OF THE AMERICAN BAR ASSOCIATION & ISRAEL BAR ASSOCIATION Current Issues in Executive Liability Arising from Transnational Operations and Global Business Transactions June 1, 2011

2. Key Constituents of Directors and Officers • The Corporation • Its Shareholders • Its Creditors • Its Employees • The Regulators/Law Enforcement Agencies Granof International Group LLC

3. The Shareholders as Constituents • The Securities Act of 1933: -Section 11 -Section 12(2) -Section 15 • The Securities Exchange Act of 1934: -Section 10(b) -Section 14(d) (7) -Section 20(a) • The Public Company Accounting and Investor Protection Act of 2002 (Sarbanes-Oxley): -Section 302 Granof International Group LLC

4. D&O Liability To The Shareholders (US Securities Class Action Claims) • 2010 Mega Settlements • Countrywide Financial Corporation…….US $624.0 million • Charles Schwab………………………….US $235.0 million • WellCare…………………………………..US $194.0 million • Maxim Integrated Products……………..US $173.0 million • Juniper Networks………………………...US $169.5 million • New Century Financial Corp……………US $124.8 million • 2011 Mega Settlements (Judgments) • Bank of America………………………….US $602.0 million • Apollo Group……………………………...US $277.5 million (J) • Move Inc…………………………………..US $141.0 million • Mahindra Satyam………………………...US $125.0 million PWC: 2010 Securities Litigation Study, April 2011 & Advisen Quarterly Report Q1 2011

5. D&O Liability To The Shareholders (US Securities Class Action Claims) Results at Trial • JDS Uniphase Securities Class Action- Defense Verdict (2007) • Household International Securities Class Action- Plaintiff Verdict (2009) • The jury found that all four defendants acted recklessly with respect to 16 of 40 statements • Thane International Securities Class Action- Defense Verdict (2010) • Vivendi SA Securities Class Action- Plaintiff Verdict (2010) • The Defendants acted recklessly and inflated its shares by misleading investors 57 times from 2000 to 2002 • In re Homestore.com Securities Litigation- Plaintiff Verdict (2011) • The jury found that of the 22 allegedly misleading company statements, ten were materially misleading The D&O Diary, by Kevin LaCroix February 28, 2011, et al

6. Government Regulators and Law Enforcement Agencies • The Securities Exchange Commission • Securities Fraud • Foreign Corrupt Practices Act • The Federal Trade Commission • The US Department of Justice and State Attorney General Offices Granof International Group LLC

7. Notable Developments in the Area of Executive Liability Recent Notable US Supreme Court Cases: Matrixx Initiatives, Inc. et al. v. Siracusano (S. Ct. No. 09-1156, Decided March 22, 2011) Bright Line Test for materiality rejected Skilling v. United States (S. Ct. No. 08-1394, Decided June 24, 2010) Right To Honest Services confined to bribery and kickback schemes Morrison et al. v. National Australia Bank Ltd. et al. (S. Ct. No. 08-1191, Decided June 24, 2010) Section 10(b) does not provide a cause of action to foreign plaintiffs suing foreign and American defendants’ misconduct on foreign exchanges Granof International Group LLC

8. Notable Developments in the Area of Executive Liability • Responses to: Morrison et al. v. National Australia Bank Ltd. et al. Decision: • In re Vivendi Universal, S.A. Securities Litigation (USDC - SD NY - February 17, 2011) • Stichting Investor Claims Against Fortis (Netherlands) • Stichting Converium Securities Compensation(Netherlands) • Silver, et al v. IMAX Corp(Canada) • Arctic Glacier Income Fund(Canada) The D& O Diary, by Kevin LaCroix March 9, 2011 et al.

9. Notable Developments in the Area of Executive Liability The Decline in US Listings U.SChinaHong Kong LondonBrazilCanada 2001 2005 2011 “U.S. Falls Behind in Stock Listings”, Wall Street Journal, May 26, 2011,

10. Notable Developments in the Area of Executive Liability • The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 • Section 922 (Whistleblower - remedies and prohibitions against retaliation as respects disclosures to the SEC) • Section 929O (SEC can apply Aiding and Abetting standard of knowledge satisfied by - Recklessness) • Section 929P(b) (SEC granted authority to bring actions based on “conduct/effect” standard – Extraterritorial Jurisdiction) • Section 954 (Recovery of erroneously awarded compensation – Claw-Back) The Dodd-Frank Act’s Impact on Securities Litigation and Enforcement, Anthony M. Alexis, Hector Gonzalez. Marcia E. Goodman Mayer, Brown

11. Notable Developments in the Area of Executive Liability • Law Enforcement and Regulatory Actions • Enforcement Action Against Wall Street Firms for Conduct Related to the Credit Crisis • Goldman Sachsagreed to pay US $550 million • UBS agreed to pay US $160 million • Bank of Americaagreed to pay US $150 million • Wachovia Capital Markets( Wells Fargo Securities), agreed to pay a US $4.45 million penalty and to give up US $6.75 million of allegedly ill-gotten gains Granof International Group LLC

12. Notable Developments in the Area of Executive Liability Wall Street Journal MAY 13, 2011 “SEC Eyes Charges For Bond Players” By Jean Eaglesham: Settlement agreements being hammered out by U.S. securities regulators and securities firms accused of fraud in mortgage-bond deals are likely to include civil charges against at least one person connected to each deal, according to people familiar with the situation. Securities and Exchange Commission officials are pushing hard as part of their ongoing probe of collateralized debt obligations and other mortgage-related products developed by Wall Street to bring charges against individuals, such as executives involved in selling the deals or outsiders who managed the assets, these people said.

13. Notable Developments in the Area of Executive Liability • Law Enforcement and Regulatory Actions Against D&O’s • Foreign Corrupt Practices Act (FCPA) • Siemens agreed to pay the SEC US $800 million to settle FCPA – related charges (Dec 15, 2008), the largest settlement ever • Johnson & Johnson agreed to pay the SEC more than US $70 million to settle FCPA - related allegations (April 8, 2011) (FCPA Professor’s Blog) • Insider Trading • “In the past 18 months alone, the U.S. has criminally charged 47 hedge-fund managers and others with insider trading; Galleon Group's Mr. Rajaratnam is the 35th defendant to be convicted or to plead guilty.” (“Trial Win Adds to Momentum in Crackdown”. Wall Street Journal, may 12, 2011)

14. Notable Developments in the Area of Executive LiabilityThe Conviction of Raj Rajaratnam “Fund Titan Fond Guilty”The Wall Street Journal, May 12, 2011

15. Notable Developments in the Area of Executive Liability The Convection of Raj Rajaratnam “Trial Win Adds to Momentum”The Wall Street Journal, May 12, 2011

16. Notable Developments in the Area of Executive Liability Defense Costs Payments for Criminal and Regulatory Acts incurred in “voluntarily” responding to SEC investigations: Thus, the costs associated with the Audit Committee Review resulted, in the first instance, from a whistleblower complaint, and later as part of Office Depot’s compliance efforts in its voluntary interface with the SEC. These costs therefore cannot be said to have resulted solely from Office Depot’s defense or investigation of the securities lawsuits. While these costs may well have reasonably been incurred in contemplation of anticipated or potential litigation, that is not enough to meet the Policy’s requirement that they result[ed] solely from the investigation or defense of a Claim against an insured for purposes of satisfying the Section 2(f) definition of Defense Costs. Office Depot vs. National Union Fire Insurance Company, et al (Case No. 09-80554-CIV-Marra, USDC-SD Florida)

17. Law & Business: U.S./Israel/Global Relationships May 28 to June 2, 2011 – Eilat, Israelתודהרבה