Did Public Firms’ Financial Reporting Affect U.S. Manufacturing?

By Stephen Glaeser and James D. Omartian September 10, 2019 by renholding

U.S. manufacturing employment fell by more than 40 percent over the last two decades, from 18 percent of the total U.S. workforce in 1997 to just 10 percent by 2018. Prior work identifies increased import competition from foreign competitors as …

The Case for Mandatory Stakeholder Disclosure

By Ann M. Lipton August 20, 2019 by renholding

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 …

Economic Consequences of Corporate Governance Disclosure

By Ole-Kristian Hope and Haihao Lu August 19, 2019 by renholding

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 …

The Readability of Company Responses to SEC Comment Letters

By Cory A. Cassell, Lauren M. Cunningham and Ling Lei Lisic August 12, 2019 by renholding

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, …

Do Managers Bias Earnings Forecasts in Response to Current Earnings Surprises?

By Stephen P. Baginski, John L. Campbell, Patrick Ryu and James Warren July 25, 2019 by renholding

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

By Mark K. Schonfeld and Amy Mayer July 24, 2019 by renholding

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 …

Arnold & Porter Discusses Federal Reserve Developments on Confidential Supervisory Information

By Richard Alexander, Michael Mancusi, Brian McCormally, Charles Yi and Kevin Toomey June 27, 2019 by renholding

The Board of Governors of the Federal Reserve System (FRB) issued two notable documents over the past two weeks involving confidential supervisory information (CSI): a cease and desist order against a former bank employee for improper handling of CSI and …

Deals, Activism, and SEC Regulation Get Lively Airing at M&A and Corporate Governance Conference

By Reynolds Holding June 10, 2019 by renholding

A host of top attorneys, judges, scholars, regulators, and advisers debated the latest issues in corporate and securities law on June 7 at a Columbia Law School conference in New York, offering cutting-edge thoughts on everything from cybersecurity to shareholder …

Facilitating Tacit Collusion: A New Perspective on Common Ownership and Voluntary Disclosure

By Andrea Pawliczek, A. Nicole Skinner and Sarah Zechman June 5, 2019 by renholding

Common ownership (competing firms with overlapping ownership) has become increasingly prevalent over the last several decades. Recent studies of the phenomenon have produced two important findings. First, common ownership is associated with less intense competition. Studies posit that managers act …

SEC Commissioner Jackson Comments on Proposed Rule on Financial Disclosures for Mergers and Acquisitions

By Robert J. Jackson, Jr. May 6, 2019 by renholding

Let me begin by thanking the staff in the Division of Corporation Finance, including Division Director Bill Hinman, for their hard work in developing the May 3 release and for helpful briefings throughout this process.

The May 3 proposal governs …

SEC Chief Accountant Talks the Future of Financial Reporting

By Wesley Bricker May 3, 2019 by renholding

I’m grateful for the opportunity to visit Baruch College’s Zicklin School of Business and speak at the annual financial reporting conference for the fourth time. Many students who were starting their collegiate work here when I first spoke at this

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Debevoise Discusses SEC Disclosure Changes for Tech, Media, and Telecom Firms

By Jeffrey P. Cunard, Michael Diz, Jonathan E. Levitsky, Paul M. Rodel and C. Chloe Orlando May 3, 2019 by abirvarma

On March 20, 2019, the SEC announced the adoption of amendments to Regulation S-K intended to modernize and simplify disclosure requirements applicable to SEC reporting companies. Highlighted below are two changes of note for companies in the technology, media and …

Beyond Disclosure: A New Way of Examining Securities Regulation

By Jena Martin May 2, 2019 by renholding

When it comes to the U.S. securities markets, the game has changed. Historically, the U.S. securities markets were dominated by retail investors who engaged in a buy and hold strategy: purchasing stocks as a vehicle to invest in a corporation …

Insider Trading and Disclosure: The Case of Cyberattacks

By Eli Amir, Shai Levi and Tsafrir Livne April 25, 2019 by renholding

The U.S. Securities and Exchange Commission (SEC) recently identified incidents in which top executives sold shares before disclosing to the public negative information about cyberattacks. For example, the former chief information officer of Equifax, Jun Ying, exercised his stock options …

The Impact of Banking Regulation on Voluntary Disclosures

By Anya Kleymenova and Li Zhang April 3, 2019 by renholding

Firms disclose a variety of information to the public, some because they are required to do so by law or regulations, and others voluntarily because they want, for example, to signal their creditworthiness to potential investors. The level and effectiveness …

Disclosure Incentives When Competing Firms Have Common Ownership

By Jihwon Park, Jalal Sani, Nemit Shroff and Hal D. White April 2, 2019 by renholding

Over the past three decades, there has been tremendous change in the ownership of publicly-traded firms in the U.S. Consolidation in the asset management industry and the rise in mutual fund investing have led a small number of institutional investors …

SEC Chairman Delivers Remarks to the Commission’s Investor Advisory Committee

By Jay Clayton March 29, 2019 by renholding

Thank you, Anne (Sheehan). Good morning everyone. It’s good to see everyone again, particularly as the last time we all met in person was in December of last year. I was glad to be able to participate with Commissioner Roisman …

SEC Commissioner Jackson Discusses FAST Act Adopting Release

By Robert J. Jackson, Jr. March 27, 2019 by renholding

I want to begin by conveying my thanks to the staff in the Division of Corporation Finance for their hard work in developing today’s adopting release. I am especially grateful to Charles Kwon and Dan Greenspan, as well as Director …

SEC’s Corporate Finance Director Discusses Disclosing Risks

By William Hinman March 21, 2019 by renholding

Today, I would like to discuss [1] how the U.S. securities disclosure requirements, which are largely principles-based, apply in areas where the disclosure topics may be complex, associated with uncertain risks and rapidly evolving. Sounds like Brexit might fit that

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The Effect of SEC Comment Letters on M&A Outcomes

By Bret A. Johnson, Ling Lei Lisic, Joon Seok Moon and Mengmeng Wang March 14, 2019 by renholding

Recent research on the effectiveness of the SEC’s filing review and comment letter process has focused almost exclusively on reviews of Forms 10-K and other periodic filings. Reviews of filings involving transactions such as mergers and acquisitions (M&A) have received …

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