Skadden Discusses Potential Impacts of the Financial CHOICE Act

On June 8, 2017, the House of Representatives passed, by a 233-186 vote (with all Democrats and one Republican voting against), the Financial CHOICE Act of 2017, a bill principally designed to reverse many features of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). The House Financial Services Committee majority has provided both an executive summary and a comprehensive summary of the current bill. It is unclear at this time what action the U.S. Senate will take with regard to the bill in its current form.

While the vast majority of the bill relates to the … Read more

Skadden Discusses Disclosure Trends

The Brexit vote and President Donald Trump’s election and proposed regulatory and other reforms have led to worldwide geopolitical uncertainty. We expect reporting companies will continue to disclose risk factors relating to these events in their quarterly and annual filings in the foreseeable future.

We previously examined the Form 10-Q quarterly reports of public reporting companies registered with the U.S. Securities and Exchange Commission (SEC) that were filed after the Brexit referendum on June 23, 2016, through August 31, 2016 (the Initial Analysis). (See our October 3, 2016, client alert “SEC Disclosure Brexit Trends.”) In that analysis, we … Read more

Skadden Discusses Section 16 Settlements

The so-called “short-swing profit rule” under Securities Exchange Act Section 16(b) generally prohibits officers and directors as well as 10 percent shareholders of a U.S. public company from profiting from any purchase or sale (or sale and purchase) of the company’s equity securities within a period of less than six months. However, Rule 16b-3 permits a company’s board of directors and qualifying board committees to take actions that exempt from the short-swing profit rule most transactions under the company’s equity-based compensation programs.

For example, many companies take steps so that the common practice often referred to as “net settlement,” in … Read more

Skadden Discusses How Trump’s Focus on Deregulation Could Shape SEC Priorities in 2017

In his statement announcing the appointment of Jay Clayton to run the Securities and Exchange Commission (SEC), President Donald Trump said that “we need to undo many regulations which have stifled investment in American businesses, and restore oversight of the financial industry in a way that does not harm American workers.” Taken together, President Trump’s emphasis on deregulation, his statement in connection with Clayton’s appointment and Clayton’s professional experiences indicate a clear intention to shift the SEC’s agenda in terms of both regulation and enforcement priorities.

Leadership changes throughout the SEC will position the agency to implement these changes this … Read more

Skadden provides SEC Rulemaking Update: A Year of Changes, With More to Come

Last year, the Securities and Exchange Commission (SEC) made major progress in completing its rulemaking mandates under the Jumpstart Our Business Startups Act (JOBS Act) and the Dodd-Frank Act. Additionally, Congress enacted the Fixing America’s Surface Transportation Act (FAST Act), which made a number of key changes to federal securities laws, including creating new accommodations for initial public offerings (IPOs) by emerging growth companies (EGCs), private resales of securities and reduced or streamlined disclosures for public companies.

Many of these changes became effective in 2015 or are expected to become effective in 2016, leading to the prospect of both new … Read more

Skadden discusses Glass Lewis Issuing 2016 US Proxy Policy Guidelines

Proxy advisory firm Glass Lewis recently issued its U.S. voting policy guidelines for the 2016 proxy season. The guidelines include a few key changes, a summary of which is outlined below.

Conflicting Shareholder Proposals. Conflicting shareholder proposals relating to proxy access provisions were one of the key issues of the 2015 proxy season. In response to this issue, the Securities and Exchange Commission staff issued a new standard in October 2015 for determining if a company can exclude a shareholder proposal based on the view that it competes with another proposal. Under the new standard, companies now may exclude … Read more

Skadden discusses the SEC’s Proposed CEO Pay Ratio Disclosure Rules

The SEC has proposed rules to implement the “CEO pay ratio” disclosure requirements under Section 953(b) of the Dodd-Frank Act.

The proposed rules would require many SEC reporting companies to publicly disclose the following information:

  • the median annual total compensation of all employees of the company (excluding the CEO);
  • the annual total compensation of the CEO; and
  • the ratio of the median annual total compensation of all employees (excluding the CEO) to the annual total compensation of the CEO.

In an effort to address the concerns raised by comments received in advance of the proposed rules over significant compliance costs … Read more