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The Securities and Exchange Commission voted on June 28, 2018, to propose amendments to the rules governing its whistleblower program. The whistleblower program was established in 2010 to incentivize individuals to report high-quality tips to the Commission and help the
June 2018
SEC Adopts New Requirements on Using XBRL Reporting Language for Financial Statements
The Securities and Exchange Commission voted on June 28, 2018, to adopt amendments to eXtensible Business Reporting Language (XBRL) requirements for operating companies and funds. The amendments are intended to improve the quality and accessibility of XBRL data.
The amendments,
SEC Updates Definition of “Smaller Reporting Companies”
The Securities and Exchange Commission voted on June 28, 2018, to adopt amendments to the “smaller reporting company” (SRC) definition to expand the number of companies that qualify for certain existing scaled disclosure accommodations.
“I want our public capital markets
SEC Proposes New Approval Process for Exchange Traded Funds
The Securities and Exchange Commission voted on June 28, 2018, to propose a new rule and form amendments intended to modernize the regulatory framework for exchange-traded funds (ETFs), by establishing a clear and consistent framework for the vast majority of
SEC Adopts Changes to Disclosure of Funds’ Liquidity Risk
The Securities and Exchange Commission on June 28, 2018, adopted amendments to public liquidity-related disclosure requirements for certain open-end funds. Under the amendments, funds would discuss in their annual or semi-annual shareholder report the operation and effectiveness of their liquidity
Bitcoin’s Price Chaos Demonstrates the Importance of Sophisticated Financial Products
Between January 1 and December 17, 2017, the value of a single Bitcoin skyrocketed from under $1,000 to nearly $20,000. To match Bitcoin’s 1183 percent return during this period, an investor would have needed the equivalent of 38 years’ average …
How Institutional Cross-Ownership Affects Corporate Financing of Investment Opportunities
Public firms are increasingly connected through institutional investors’ stock ownership, largely due to individual investors who invest excess cash and retirement savings through financial institutions. Firms with institutional cross-ownership have institutional stockholders with significant stakes in other firms within the …
Will Swing Pricing Save Sedentary Shareholders?
Starting in November 2018, U.S. public, open-ended mutual funds will have the option to adjust the daily pricing of the fund—the net asset value or NAV—to account for and recoup large transaction costs. Currently, the fund, and therefore its remaining …
Wachtell Lipton Discusses Supreme Court Ruling on SEC Judges
On June 21, in a much anticipated decision, the Supreme Court held that SEC Administrative Law Judges (“ALJs”), who have historically been appointed by SEC staff, are “Officers of the United States” and, hence, under the Appointments Clause, can be …
How Exchange Listing Affects Corporate Governance
On April 3, 2018, the Swedish online music company Spotify Technology disrupted the traditional initial public offering (IPO) marketplace when it directly listed its shares on the New York Stock Exchange (NYSE) under the ticker symbol “SPOT.” With a valuation …
Wachtell Lipton Discusses Shareholder Activism, Corporate Governance, and the Hunt for Long-Term Value
As the spotlight on boards, management teams, corporate performance and governance intensifies, as articles like the Bloomberg and Fortune profiles of Elliott Management (“The World’s Most Feared Investor—Why the World’s CEOs Fear Paul Singer” and “Whatever It Takes to Win—How …
How Management Manipulates Voting on Its Own Proposals
Shareholders can generally affect the decisions of companies in two ways: through voice (voting) and through exit (selling their shares). In a new paper, “Management (of) proposals,” we use shareholder voting records on management proposals from 2003 to …
Cleary Gottlieb Discusses SEC’s Latest Take on Digital Assets as Securities
On Thursday, June 14, the SEC Director of Corporation Finance, William Hinman, stated his view that current secondary market trades of Ether are not now securities transactions as part of a speech on the treatment of digital assets under the …
The Case for Doing Nothing About Common Ownership of Competing Firms
One of the hottest antitrust topics of late has been institutional investors’ “common ownership” of minority stakes in competing firms. Writing in the Harvard Law Review, Einer Elhauge proclaimed that “[a]n economic blockbuster has recently been exposed”—namely, “[a] small …
Fried Frank Discusses the Obligations of LLC Directors and Managers
There are now more than twice as many entities formed in Delaware as LLCs and other alternative entities as are formed as corporations. Private equity funds and hedge funds often are formed as LLCs or limited partnerships to take advantage …
How Non-Compete Agreements Affect CEO Mobility, Job Security, and Compensation
Firms generate profits through investments in physical and human capital. In legal regimes that recognize property rights, the firm generally has full ownership over its physical capital, as well as the right to future cash flows generated by these assets. …
SEC Chair Talks Culture at the SEC and Financial Institutions
Thank you Bill [Dudley] for that kind introduction and for inviting me to speak today.[1] I’m planning to speak for fifteen or so minutes and to open the floor to questions.
I want to extend my congratulations to Bill
How Non-CEO Inside Directors Add Value After an Unplanned CEO Exit
The CEO-firm match theory posits that the CEO labor market is efficient and competitive and that the matching between CEOs and firms is optimal. However, both anecdotal and empirical evidence show that CEO departures, particularly unplanned CEO departures, can be …
Paul Weiss Offers M&A at a Glance for May 2018
M&A activity in May 2018 generally weakened from the prior month. The total number of deals decreased in the U.S. by 1.2% to 667 (the second-lowest level in the last 12-month period) and globally by 4.8% to 2,759 (the lowest …
Wachtell Lipton Discusses the Pros and Cons of Directors’ Notes
“To take notes or not to take notes – that is the question” often asked in corporate board rooms today. As a matter of good governance, it is important that the minutes serve as the single, clear, official record of …