Newsletters

DIRECTOR'S DUTY OF LOYALTY

AN OVERVIEW

Business Review Letters -- Antitrust Clearance from the Department of Justice

Before engaging in a business practice, individuals and companies may seek the view of the U.S. Department of Justice on the legality of the business practice under federal antitrust law. The procedure, known as a Business Review, allows persons to ask the Department of Justice for a statement of its current enforcement intentions. Although the Department of Justice is not authorized to provide advisory opinions to private parties, its business review procedure does allow such parties to seek a statement of present enforcement intentions.

The U.S. Foreign Corrupt Practices Act

Corrupt payments to foreign officials to obtain or keep business are prohibited by the U.S. Foreign Corrupt Practices Act. There are five elements of a violation of the provisions of the Act prohibiting bribery of foreign government officials.

Monopolization Under the Sherman Act

Section 2 of the Sherman Act, 15 U.S.C.S. § 2, prohibits monopolies and attempts or conspiracies to monopolize. The statute provides for prison terms and fines in actions brought by the U.S. Department Justice and for injunctions and damages in civil actions brought by the Department of Justice, states, and private parties.

Duty of Loyalty: Confidentiality

The duty of loyalty prohibits a director from using her corporate position to obtain a personal profit or to gain a personal advantage. A director is privy to information that may not be known to others outside the corporate sphere. As part of the duty of loyalty, a director cannot take advantage of corporate information for her own personal interests.