Sullivan & Cromwell discusses Proxy Access 2016

As companies prepare for the 2016 proxy season, the number of adopted proxy access bylaws has almost doubled in recent months and at least two new forms of proxy access shareholder proposals have appeared. On the company side, proxy access bylaws adopted since August 1, 2015 confirm the market trend toward a 3% ownership threshold, 3-year holding period, 20% nomination limit and 20-member group limit. Trends for ancillary provisions also have coalesced to a significant extent. On the shareholder-proponent side, James McRitchie, a frequent filer of shareholder proposals and advocate for the proxy access movement, has published two new forms … Read more

Sullivan & Cromwell discusses Proposed SEC Rule Regarding Security-Based Swaps

SUMMARY

On September 8, 2014, the Securities and Exchange Commission proposed a rule under the Securities Act of 1933 to provide that the publication or distribution of price quotes relating to security-based swaps that may be purchased only by eligible contract participants and are traded or processed through a national securities exchange or a security-based swap execution facility will not be deemed to constitute offers of such security-based swaps (or any guarantees of such security-based swaps), for the purposes of the registration requirements of the Securities Act. Comments on the proposed rule are due on or before 60 days from … Read more

Sullivan & Cromwell discusses Second Circuit’s Application of Morrison v. National Australia Bank

SUMMARY

On August 15, 2014, in a case of first impression involving cross-border securities-based swap transactions, the Second Circuit held that the presumption against the extraterritorial application of Section 10(b), announced by the U.S. Supreme Court in Morrison v. National Australia Bank, 561 U.S. 247 (2010), applies even to claims involving supposedly “domestic” securities-based swap transactions if those claims are “so predominantly foreign as to be impermissibly extraterritorial.” In this case, where the claims against a non-U.S. company were based on statements made abroad and were based on swap transactions that referenced securities trading “only on foreign exchanges,” the … Read more

Sullivan & Cromwell discusses Potential Expansion of Liability Theories Under the Martin Act

New York State Attorney General and BlackRock Settle Investigation into BlackRock’s Analyst Survey Program, Signaling Potential Expansion of Martin Act Liability Under “Insider Trading 2.0” Theory 

SUMMARY

On January 8, 2014, the New York State Attorney General and BlackRock, Inc. entered into a settlement agreement by which BlackRock agreed to end its Wall Street research analyst survey program. The Attorney General alleged that BlackRock’s practice of systematically surveying and aggregating information from analysts gave BlackRock an unfair advantage in predicting future analyst opinions, in violation of the Martin Act and the New York Executive Law. Because the Attorney General did

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