John over at the Wired GC provides this timely and informative post about the troubling implications of the criminal case against Ellen Roth, the 61-year-old former in-house lawyer at a U.S. subsidiary of German electronics-maker Siemens.
As Peter Lattman noted here, Ms. Roth was indicted last week in Chicago on charges that she helped set up a sham company to facilitate Siemens winning a $49 million radiology contract at a Chicago-area hospital. The indictment alleges that Ms. Roth was ìthe principal corporate decision-maker responsible for creating the legal entityî that established a sham partnership with a minority-owned business, which gave Siemens an advantage in obtaining the contract.
Not only does the case involve the now common problem that corporate officials can no longer rely on any attorney-client privilege of their employer, Larry Ribstein notes in this post that Sarbanes-Oxley could be used to expand the web of criminal liability much further than just the company’s general counsel:

The indictment says that ìSMS [the Siemens sub] relied on Roth to ensure legal compliance with the applicable ordinances.î Might this sort of thing trigger liability of the parent corporation or senior executives, either at the subsidiary or the head office, who certified adequacy of internal controls? Did they see the relevant business organization documents, including the email that the indictment says shows the absence of the requisite profit-sharing arrangement? If not, is the failure to examine or to insist on seeing those documents the absence of an internal control of which management had the requisite knowledge to trigger SEC sanctions under Section 302 and 906 of SOX (the latter includes criminal sanctions), or civil liability under 10(b) or 10b-5?