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The Securities and Exchange Commission today provided guidance [rules available here] to assist investment advisers in fulfilling their proxy voting responsibilities. The guidance discusses, among other matters, the ability of investment advisers to establish a variety of different voting arrangements
Securities Regulation
SEC Chairman and Commissioners Issue Statements on Proxy Adviser Guidance
The U.S. Securities and Exchange Commission’s chairman and each of its commissioners issued a statement at yesterday’s open meeting on guidance about proxy voting and proxy voting advice. Chairman Jay Clayton’s statement is here. In support of the guidance, …
SEC Data Analysis in Insider Trading Investigations
Recent SEC enforcement actions charging senior lawyers at Apple and SeaWorld with insider trading provide reason to dust off company insider trading policies and assess whether updates or additional training are needed. As sanctuaries for corporate America’s most valuable confidential …
The Case for Mandatory Stakeholder Disclosure
There are many sources of information about corporate operations, but one of the most critical is the disclosure required by the federal securities laws. Whenever a company seeks to raise capital through the public sale of securities, the U.S. Securities …
SEC Commissioner Speaks Before Forum on Small Business Capital Formation
Thank you, Martha [Miller]. It is wonderful to be here in Omaha. Thank you to all the participants in today’s [August 14] program. Dean [Anthony] Hendrickson, thank you for welcoming us to Creighton University’s Heider College of Business. It is
Economic Consequences of Corporate Governance Disclosure
Related party transactions (RPTs) refer to a transfer of resources, services, or obligations between a reporting entity and a related party and usually offer insiders a way to expropriate wealth from other investors via self-dealing. Both the Financial Accounting Standards …
Facebook’s Libra Heightens Debate Over the Regulation of Cryptocurrencies
Cryptocurrencies like Ether, DAO, Bitcoin and Facebook’s Libra are electronically generated and stored currencies by which users can trade real or virtual objects with one another, bypassing traditional central clearinghouses. Given that these cryptocurrencies are starting to replace some national …
The Readability of Company Responses to SEC Comment Letters
The Securities and Exchange Commission published its Plain English Handbook in 1998 with a goal of promoting “clearer and more informative disclosure documents” (SEC 1998). Warren Buffet authored the preface, where he states, in part:
For more than forty years, …
SEC Commissioner Peirce Addresses the American Chamber of Commerce in Japan
It is an honor to be with you today [August 7, 2019]. I have long wanted to visit Japan. Indeed, one of the options I explored following college was coming to Japan to teach English. Instead I ended up in
Riding the Mania of Blockchain: Public Firms’ Speculative 8-K Disclosures
The price of Bitcoin, a cryptocurrency based on blockchain technology, increased dramatically from less than a penny when it was launched in 2009 to $900 in January 2017 and peaked at over $19,500 in December 2017. This rise coincided with …
SEC Commissioner Discusses Cross-Border Cooperation in Digital-Asset Regulation
Thank you, Robby [Greene], for that kind intro. I am delighted to see that Robby, once my research assistant, has clearly gone on to bigger and better things. I also am delighted to be here in Singapore, by some accounts
The Potential Rewards for Blowing the Whistle on Wall Street Just Went Up
As an incentive to blow the whistle, the Securities and Exchange Commission awards tipsters who supply credible information resulting in successful enforcement actions up to 30 percent of monetary penalties paid by securities violators. The unique features of the program …
SEC Chairman Clayton Speaks to Fixed-Income Committee
Thank you, Michael [Heaney]. Good morning everyone. Thank you all for being here. I want to extend a warm welcome to our newest Commissioner, Allison Lee — Welcome back to the Commission and to your first FIMSAC meeting. We have
Blockchain Will Not Solve the Proxy Voting Problem
The U.S. proxy voting process is widely viewed as inefficient, opaque, and frequently inaccurate. The conventional wisdom is that voting inaccuracy has arisen largely as a result of decisions made in the 1960s to transition to a system of share …
The Costs of Complying with SOX’s Internal-Controls Audit Requirement
Section 404(b) of the Sarbanes Oxley Act (SOX) requires auditors to test and report on the effectiveness of internal control over financial reporting (ICFR) for accelerated and large accelerated filers. Although Iliev (2010) documents substantial costs to initially comply with …
SEC Chairman Clayton Speaks to Investor Advisory Committee
Thank you, Anne [Sheehan]. Good morning everyone, and I want to extend a special welcome to our new commissioner, Allison Lee.
I am interested in today’s discussion. I understand the Committee first will be talking about the SEC approach to
Do Managers Bias Earnings Forecasts in Response to Current Earnings Surprises?
Each quarter, managers provide a summary of their firm’s accounting performance – a disclosure known as a quarterly earnings announcement. Earnings announcements attract significant attention from investors and media outlets because, if earnings are different than market expectations, stock price …
Gibson Dunn Offers 2019 Mid-Year Securities Enforcement Update
The first half of 2019 has seen a continuation of the Securities and Exchange Commission’s emphasis on protecting the interests of Main Street investors. Chairman Clayton reiterated these themes in his testimony in May before the Financial Services and General …
SEC Chairman Clayton Kicks Off SEC Roundtable on Short-Termism
Bill [Hinman] thanks a lot. I’m going to highlight three items to try and kick us off here. First, a thank you to Bill, Coy, Shelley and the other staff from the Division of Corporation Finance for the work you
The Supreme Court Misses an Opportunity in Securities Law Enforcement
In Lorenzo v. SEC, the U.S. Supreme Court continued the struggle to define the difference between primary liability and aiding and abetting liability in Rule 10b-5 and other securities fraud claims. The difference matters because private plaintiffs do not have …