Cahill Gordon Discusses SEC Action Against Cheesecake Factory for Misleading COVID-19 Disclosures

On December 4, 2020, the Securities and Exchange Commission announced that it had settled charges against The Cheesecake Factory for making material misstatements concerning the impact of COVID-19 on its business operations and financial condition.[1]  The settlement resolved charges pursuant to Section 13(a) of the Securities Exchange Act of 1934 and Rules 13a-11 and 12b-20 thereunder concerning statements that The Cheesecake Factory had made in press releases attached to Current Reports on Form 8-K dated March 23 and April 3, 2020.  Of particular concern to the SEC were statements by The Cheesecake Factory that its restaurants were “operating sustainably” … Read more

Cahill Discusses Amendments to Delaware Limited Liability Company Act

Amendments to the Delaware Limited Liability Company Act (the “DLLCA”) previously introduced in April 2018 were signed into law on July 24, 2018[1]. The amendments enable a Delaware limited liability company (an “LLC”) to engage in several new forms of transactions including: the (1) division of an LLC into two or more separate LLCs, (2) formation of registered series of LLCs and statutory public benefit LLCs and (3) use of blockchain technology for maintenance of LLC records and for electronic transmissions.

I. Division of LLCs


Effective August 1, 2018, an LLC may divide itself, and its assets … Read more

Cahill Gordon Discusses Conflicting Rulings on Labor Department’s Fiduciary Rule

In a March 15, 2018 decision in Chamber of Commerce of the United States v. United States Department of Labor, the United States Court of Appeals for the Fifth Circuit vacated in its entirety the so-called “Fiduciary Rule” promulgated by the Department of Labor (“DOL”) in 2016, holding that the rule is inconsistent with the Employee Retirement Income Security Act (“ERISA”) and that the DOL lacked statutory authority to impose the restrictions and requirements the rule created.[1]  Two days earlier, in Market Synergy Group, Inc. v. United States Department of Labor, the United States Court of Appeals … Read more

Cahill discusses SEC’s Amendments to Rules of Practice for Administrative Proceedings

On July 13, 2016, the Securities and Exchange Commission (“SEC”) adopted important amendments updating its rules of practice governing its administrative proceedings.[1]  These changes concern, among other things, the timing of hearings in administrative proceedings, depositions, summary disposition, the contents of an answer, admissibility of evidence and expert disclosures and the procedure for appeals.[2]  The amendments are intended to update the rules and introduce additional flexibility into administrative proceedings, while continuing to provide for the timely and efficient resolution of the proceedings.  The amendments will become effective sixty days after publication in the Federal Register and will apply … Read more

Cahill discusses how Recent Cases Consider Challenges to Constitutionality of SEC’s Administrative Law Judges

Since the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) expanded the authority of the Securities and Exchange Commission (“SEC”) to seek civil penalties through administrative proceedings,1 the SEC has brought, as one court observed, “an ever increasing number of enforcement actions within its own administrative scheme, rather than in federal court.”2 In 2014, for instance, the SEC initiated 43% of its litigated actions as administrative proceedings.3 This shift may be due, at least in part, to the reported advantage the SEC enjoys before its own Administrative Law Judges (“ALJs”). From October 2010 through … Read more