Securities Regulation

Latham & Watkins Discusses Whether NFTs Are Securities

By Stephen P. Wink, Miles P. Jennings, Shaun Musuka and Deric Behar March 19, 2021 by Nisha Chandra

As the current crypto boom has progressed, it seemed Decentralized Finance (DeFi) had cemented its position as the dominant new narrative of this cycle. This view is supported by the tens of billions of dollars that have flowed into DeFi …

Cooley Discusses SEC’s Regulation Fair Disclosure Charges Against AT&T

By Luke Cadigan, Patrick Gibbs, Randall Lee, Colin Scott and Elizabeth Skey March 18, 2021 by Nisha Chandra

The SEC recently brought charges against AT&T and three mid-level executives for selectively providing information to Wall Street analysts in alleged violation of Regulation Fair Disclosure (Reg FD). According to the complaint filed in the Southern District of New York, …

Acting Chair Lee Speaks on Meeting Investor Demand for Climate and ESG Information at the SEC

By Allison Herren Lee March 17, 2021 by renholding

Thank you, John [Podesta], and thanks to the whole team here at the Center for American Progress, for hosting me today. I’ve had the honor of serving as Acting Chair of the SEC for nearly two months now, and I

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Wachtell Lipton on Whether the SEC Is Pushing the Boundaries of Regulation FD

By John F. Savarese and Wayne M. Carlin March 15, 2021 by renholding

On March 5, the SEC brought an enforcement action charging a public company and three of its investor relations personnel with violations of Regulation FD, alleging that the company’s IR personnel had fed non-public information to sell-side research analysts in …

Simpson Thacher Discusses SEC Framework for Use of Derivatives by Regulated Funds

By David Blass, Ryan Brizek, Rajib Chanda, Debbie Sutter and Andy Madore March 12, 2021 by Nisha Chandra

In a widely anticipated action that was years in the making, the SEC adopted Rule 18f-4 under the 1940 Act prior to the conclusion of former Chair Jay Clayton’s tenure.  The rule overhauls the regulatory framework for the use of …

Kirkland & Ellis Discusses ESG and Climate Regulatory Developments Affecting Private Equity

By Jennie Morawetz, Alexandra Farmer, Marian Fowler, Elizabeth Dyer and Raya Treiser March 11, 2021 by Nisha Chandra

In the second half of 2020, demand for ESG-focused investments continued to accelerate, and data showing the outperformance of those investments during the COVID-19 pandemic has set the stage for robust demand to continue in 2021. In his recent letter …

Toward a Better Coordinated Regulatory Response to Cryptoassets

By Carol Goforth March 10, 2021 by renholding

On Monday, January 8, 2021, Tesla announced in a filing with the Securities and Exchange Commission that it had purchased $1.5 billion worth of Bitcoin.[1] This purchase coincided with a dramatic increase in the price of the cryptoasset, which …

Skadden Discusses Trends in Securities Class Action Filings

By Jay B. Kasner, Scott D. Musoff, Susan L. Saltzstein and William J. O'Brien III March 9, 2021 by snehapandya

Despite unprecedented disruptions to the court system from the COVID-19 pandemic, plaintiffs continued to bring securities class actions at elevated levels in 2020 — a sign that filings will remain high in the year ahead. Based on data from Cornerstone …

Davis Polk Discusses New SEC Climate and ESG Enforcement Task Force

By Joseph A. Hall, Michael Hong, Michael Kaplan, Gregory Rowland and Betty Moy Huber March 8, 2021 by snehapandya

On March 4, the Securities and Exchange Commission announced a newly created Climate and ESG Task Force in the Division of Enforcement. The Climate and ESG Task Force will work closely with other areas of the SEC as part of …

Commissioners Discuss SEC’s Enhanced Climate-Change Efforts

By Hester M. Peirce and Elad L. Roisman March 5, 2021 by renholding

Over the past two weeks, we and the public have seen a steady flow of SEC “climate” statements and press releases.[1]  Our Divisions of Corporation Finance, Examinations, and Enforcement all have announced climate- or ESG-related initiatives.  What does this

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Securities Regulation and Class Warfare

By Jonathan R. Macey March 2, 2021 by renholding

In a new article, I examine the regulatory goals of creating “fair, orderly, and efficient” securities markets in light of the recent issues involving trading in the shares of GameStop Corp. (GME) through the broker-dealer firm Robinhood Financial LLC.  The …

What Do the Data Reveal About (the Absence of Black) Financial Regulators?

By Chris J. Brummer February 25, 2021 by renholding

As has been remarked many times, yet still never enough, Black history is America’s history – and if anything, financial regulation proves the point.   When calamity hits the stock market, Black people feel it too, if not always in terms …

Davis Polk Discusses SEC No-Action Statement on Custody of Digital Asset Securities

By Joseph A. Hall, Jai Massari, Zachary J. Zweihorn, Alba Baze and Mark Sater February 24, 2021 by snehapandya

A recent SEC conditional no-action position (the “No-Action Statement”) has further opened the regulatory door to trading of digital asset securities (“DAS”), by allowing certain limited purpose DAS-only broker-dealers to maintain custody of these securities on …

Private Company Lies

By Elizabeth Pollman February 23, 2021 by renholding

Rule 10b-5, the federal antifraud catch-all, applies to both public and private company securities. Yet the voluminous case law, and the related scholarly literature, has focused primarily on public corporations and markets.

This state of the world sufficed for …

Gibson Dunn Offers 2020 Year-End Securities Litigation Update

By Robert F. Serio, Brian M. Lutz, Monica K. Loseman, Jefferson E. Bell and Mark H. Mixon, Jr. February 23, 2021 by renholding

Notwithstanding the ongoing spread of COVID-19 and unprecedented changes in daily life and the economy, the second half of 2020 marched on to the steady drumbeat of securities-related lawsuits we have observed in recent years, including securities class and stockholder …

Shareholder Monitoring and Discretionary Disclosure

By Venky Nagar and Jordan Schoenfeld February 22, 2021 by renholding

Regulation Fair Disclosure (“Reg FD”) is commonly believed to prohibit managers from disclosing information about their firm to select shareholders. But managers are in fact allowed to do so in several circumstances. Specifically, Reg FD exempts communications to shareholders who …

King & Spalding Discusses Takeaways from GameStop

By John M. Anderson, Robert J. Leclerc, Aaron W. Lipson, Brett R. Schroeder and Michael J. Oberlies February 19, 2021 by snehapandya

The recent meteoric rise (and subsequent fall) of GameStop, AMC Theaters and a host of other “meme stocks” has prompted hedge funds, investment bankers, regulators and public company executives to critically re-examine their preparedness for extraordinary market volatility.

The meme …

King & Spalding Discusses SEC’s Potential Focus During Biden Administration

By Alec Koch, Carmen Lawrence, Andrew Michaelson and Matthew B. Hanson February 12, 2021 by Nisha Chandra

For the next several weeks and months, intense focus will be trained on determining the priorities of the Biden administration. We believe that at the Securities and Exchange Commission (“SEC”), the new administration will ramp up examinations and investigations of …

The Duty to Disclose Inside Information: The Subtle Relationships Within the European Market Abuse Regulation

By Mathijs Giltjes and Arnoud Pijls February 11, 2021 by renholding

In our recent paper we discuss the European regime governing the disclosure of inside information. In particular, we try to find an answer to the question of which duties of the disclosure regime have been violated in two situations: where …

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

By Bradley J. Bondi, Peter J. Linken and Connor Shea February 9, 2021 by Nisha Chandra

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 …