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[FundLaw] Re: Y2K Disclosures Still?

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  • John W. Carr
    Dave: As a bank lawyer (too) I m inclined to agree with you as to banks, which more than any other type of company were bludgeoned by the regulators over this
    Message 1 of 8 , Jan 11, 2000
      Dave:

      As a bank lawyer (too) I'm inclined to agree with you as to banks, which
      more than any other type of company were bludgeoned by the regulators over
      this issue and forced to spend gazillions of dollars to certify systems that
      in most cases did not need fixing. The objective, however, was not to assure
      that consumers would not suffer, but CYA - to make sure nobody could blame
      regulators if they did. Just maybe, however, the overkill contributed to the
      nearly flawless transition.

      Now lets talk about something more important - the waste of mandatory legal
      education requirements!

      John W. Carr
      Shapiro Buchman Provine & Patton LLP
      1333 N. California Blvd., Suite 350
      Walnut Creek, CA 94596
      925/944-9700, 944-9701 (fax)
      jcarr@...



      -----Original Message-----
      From: David Thomas [mailto:dcthomas@...]
      Sent: Tuesday, January 11, 2000 5:06 PM
      To: fundlaw@egroups.com
      Subject: [FundLaw] Re: Y2K Disclosures Still?


      "Baker, John" <JBaker@...> wrote:

      >It seems to me that we'll need to continue disclosures until we're
      >sure the danger has passed

      Seems to me that for many companies there never was any danger other
      than the SEC itself. Lemmings that we are, however, we lawyers
      cheerfully jumped up to follow the SEC's pied piper and sing its tune.
      For Chrissakes, I had one issuer (not a financial institution) adding
      Y2k disclosre when its business consisted of two friends selling
      dresses out of an apartment, and all of its electronic information
      could easily have been kept on the back of an envelope.

      Now that the Commission is getting off this particular toot and on to
      its next one, we can perhaps make the kinds of judgements we would
      have made if the pied piper had let us call the issuers' tunes in the
      first instance. For financial institutions, that probably means at
      least a passing mention of the possibility of creeping errors from Y2k
      going undetected, but not much more.



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    • Baker, John
      I think a lot of the Y2K overkill is for historical reasons. In 1997 and even 1998, large institutions were well under way with their Y2K remediation efforts,
      Message 2 of 8 , Jan 12, 2000
        I think a lot of the Y2K overkill is for historical reasons. In
        1997 and even 1998, large institutions were well under way with their Y2K
        remediation efforts, but there was a perception (probably accurate in 1997,
        not in 1998) that there had been little public attention to the problem and
        that in some areas remediation was far behind or not really even started.
        Key congressmen started making noise about the need for corrective
        legislation. This had its intended effect of goading regulators to action.
        The SEC's initial issuance of a Staff Legal Bulletin did not satisfy the
        legislators, and the SEC felt forced to go further in its requirements.

        A number of Y2K problems, usually of a minor nature, have emerged,
        and more will come to light. On the other hand, public antennae are
        certainly up. Most companies, meanwhile, are attempting to minimize any
        perception of Y2K problems, even when they are forced to acknowledge the
        existence of a problem; there is an almost desperate effort to
        recharacterize any problem as non-Y2K, even if it is date-related. A key
        question is the extent to which problems would exist in the absence of Y2K
        concerns. After all, computer-related problems are not exactly a novelty.
        The Y2K remediation efforts missed some problems and likely caused new ones,
        but they also upgraded a lot of old systems.

        I expect that, for a while at least, investment companies will keep
        at least some Y2K disclosure, then drop it when they feel more comfortable.
        (John Carr made a good point about public companies needing to update their
        disclosures, perhaps along the lines of "the danger is past," but I don't
        think that applies to investment companies.) But I do think you could argue
        that, at this point, the risks are comparable to major systems upgrades,
        which most people wouldn't bother disclosing.

        John M. Baker <JBaker@...>
        Stradley, Ronon, Stevens & Young, LLP
        2121 K Street, N.W., Suite 800, Washington, DC 20037
        (202) 261-3512 Fax (202) 261-3581
        FundLaw Listowner
        Http://www.egroups.com/group/fundlaw/info.html


        > -----Original Message-----
        > From: David Thomas [SMTP:dcthomas@...]
        > Sent: Tuesday, January 11, 2000 7:55 PM
        > To: fundlaw@egroups.com
        > Subject: [FundLaw] Re: Y2K Disclosures Still?
        >
        > "Baker, John" <JBaker@...> wrote:
        >
        > >It seems to me that we'll need to continue disclosures until we're
        > >sure the danger has passed
        >
        > Seems to me that for many companies there never was any danger other
        > than the SEC itself. Lemmings that we are, however, we lawyers
        > cheerfully jumped up to follow the SEC's pied piper and sing its tune.
        > For Chrissakes, I had one issuer (not a financial institution) adding
        > Y2k disclosre when its business consisted of two friends selling
        > dresses out of an apartment, and all of its electronic information
        > could easily have been kept on the back of an envelope.
        >
        > Now that the Commission is getting off this particular toot and on to
        > its next one, we can perhaps make the kinds of judgements we would
        > have made if the pied piper had let us call the issuers' tunes in the
        > first instance. For financial institutions, that probably means at
        > least a passing mention of the possibility of creeping errors from Y2k
        > going undetected, but not much more.
        >
        >
        >
        > ------------------------------------------------------------------------
        > This message was posted to the FundLaw list. It is not legal advice and
        > does not create an attorney-client relationship. To Post a message, send
        > it to fundlaw@.... To Unsubscribe, send a blank message to
        > fundlaw-unsubscribe@....
        >
        > ------------------------------------------------------------------------
        > -- 20 megs of disk space in your group's Document Vault
        > -- http://www.egroups.com/docvault/fundlaw/?m=1
        >
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