Sullivan & Cromwell Discusses NYSE Proposal to Expand Permitted Use of Direct Listings

On November 26, 2019, New York Stock Exchange LLC (“NYSE”) filed notice of a proposed rule change with the Securities and Exchange Commission to modify its listing rules relating to direct listings. The proposed rule change would allow companies to raise capital and sell new shares in a direct listing, in contrast to the current rules, which only permit secondary sales by existing shareholders. In addition, the proposed rule would modify the distribution requirements for direct listings, thereby expanding the number of private companies that would be eligible for direct listings. If adopted, the proposed rules would significantly increase the … Read more

Sullivan & Cromwell Discusses Amendments to Volcker Rule Regulations

On July 9, 2019, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Office of the Comptroller of the Currency (the “OCC”), the Federal Deposit Insurance Corporation (the “FDIC”), the Securities and Exchange Commission (the “SEC”) and the Commodity Futures Trading Commission (the “CFTC” and collectively, the “Agencies”) released final rules adopting their previously proposed amendments to the regulations implementing Section 13 of the Bank Holding Company Act of 1956 (the “BHC Act”),[1] known as the “Volcker Rule.”

The amendments modify the implementing regulations in a manner consistent with Sections 203 and 204 of the … Read more

Sullivan & Cromwell Discusses New Type of Lawsuit Involving Securitized Debt

On June 12, 2019, in Cohen v. Capital One Funding,1 certain Capital One credit card holders filed a putative class action lawsuit in the U.S. District Court for the Eastern District of New York against

  • special purpose entities (“Trusts”) that purchased and securitized credit card receivables from Capital One, and (ii) the trustees of those Trusts. Plaintiffs concede that, because Capital One is a national bank, the National Bank Act (“NBA”) preempts the application of New York usury laws to loans made by Capital One to New York credit card holders, and so plaintiffs did not name Capital One

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Sullivan & Cromwell Discusses California’s Female Gender Quotas for Public Companies

On September 30, 2018, Governor Brown of California signed into law a bill, SB-826, to require female representation on the boards of directors of publicly traded companies who identify as being headquartered in the state.  SB-826 makes California the first state to attempt to enact female gender quotas for boards of directors.  SB-826 will become effective on January 1, 2019 and will require companies subject to the legislation to comply with the first phase of requirements (requiring boards of directors to have at least one female member) no later than December 31, 2019.

Discussion

SB-826 inserts a new Section 301.3 … Read more

Adjusting to Shareholder Activism

Active Shareholders are the New Normal, Placing a Premium on Management Preparedness, Board Awareness and Ongoing Shareholder Engagement for Public Companies

SUMMARY

The results of the 2013 proxy season and other recent corporate governance developments have demonstrated that boards and management teams should thoughtfully assess their approach to dealing with hedge funds and other “long” investors that are considered “activist.” Responding effectively to these activist shareholders in today’s environment requires more continuous engagement with shareholders, a recognition of the broad support given to many activist campaigns by traditional investors and advance preparation.

The universe of “activist” shareholders has expanded and

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