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Latham & Watkins Discusses New SEC Guidance on CEO Pay Ratio Rules
The staff of the Division of Corporation Finance of the Securities and Exchange Commission (SEC) has issued new guidance on the SEC’s rules requiring companies to disclose the pay ratio between their CEO and median compensated employee. The staff’s new …
Paul Weiss Discusses New Signs of Vigorous FCPA Enforcement
As the end of their fiscal years approached on September 30, the Department of Justice and the Securities and Exchange Commission announced a number of resolutions, underscoring their pronouncements that “vigorous enforcement”[1] of violations of the Foreign Corrupt Practices …
SEC Announces Enforcement Results for 2016
The Securities and Exchange Commission announced on October 11 that, in fiscal year 2016, it filed 868 enforcement actions exposing financial reporting-related misconduct by companies and their executives and misconduct by registrants and gatekeepers, as the agency continued to enhance …
Insider Trading: Time for Supreme Court to Ditch Personal Benefit Test
The U.S. Supreme Court has a number of options when it considers its first insider trading case in almost 20 years. The case is Salman v. United States, and oral argument will be held on October 5. The facts …
SEC Enforcement Chief Ceresney Discusses Focus on Auditors and Auditing
Good morning and thank you for that very kind introduction. It’s a pleasure to speak with you all today. Before I start, I must give our standard disclaimer that the views I express today are my own and do not …
Information Challenges and the Use of Earnouts in Mergers and Acquisitions
In mergers and acquisitions transactions with privately-held target companies, transacting parties will often agree to make payments to the target shareholders contingent upon some post-closing events. One frequently used mechanism is an earnout. With an earnout, the parties will agree …
Debevoise & Plimpton Discusses Disclosure of Government Investigations
Registrants, particularly those involved in highly regulated industries, frequently must determine whether and when a government investigation and related pending or threatened litigation must be disclosed in its periodic reports filed with the Securities and Exchange Commission (“SEC”). On September …
PwC Discusses New York’s Proposed Cybersecurity Rules
On September 13, 2016, the New York State Department of Financial Services (DFS) proposed a broad set of cybersecurity regulations for banks, insurers, and other financial institutions.[1] The proposal is largely consistent with existing guidance (e.g., under the NIST …
Cleary Gottlieb Discusses SEC’s Changes to Investment Adviser Filings
On August 25, 2016, the Securities and Exchange Commission (the “SEC”) adopted amendments to Form ADV to modernize and enhance information reported by investment advisers (the “Amendments” or the “Form ADV Amendments”).[1] Among …
Should Say-on-Pay Votes Be Binding?
The practice of allowing shareholders to cast non-binding say-on-pay votes has spread quickly and broadly throughout the world. It seemed that investors would finally get the opportunity to express their dissatisfaction with outrageous or ill-conceived compensation packages.
The practice was, …
Quantified Cost-Benefit Analysis at the SEC
In their recent article, Jeff Schwartz and Alexandra Nelson critique the Securities and Exchange Commission’s cost-benefit analysis accompanying the Conflict Minerals Rule.[1] This rule requires public companies using conflict minerals in their production to annually disclose whether the minerals …
Early Returns: Companies Change Non-GAAP Financial Disclosures Following Recently Issued SEC Guidance
On May 17, 2016, the Securities and Exchange Commission issued new Compliance and Disclosure Interpretations (“C&DIs”) on the use of non-GAAP financial measures. With a fiscal reporting period having passed since the SEC issued the C&DIs, we surveyed …
How New CEOs Use Disclosure to Cut Uncertainty and Boost Their Careers
For chief executive officers, communication is essential. It allows them to help stakeholders understand a company’s strategies and form opinions about the company’s prospects as well as the CEO’s ability to create value. While effective communication is important at every …
Family First: How Nepotism Lowers Investment at U.S. Firms
Family does matter in the United States. Census data indicate that more than 20 percent of men have worked for the same employers as their fathers, while a recent New York Times article suggests that the sons of senators have …
Insider Trading Penalties: An International Study
Insider trading is a serious form of misconduct and can result in defendants receiving lengthy prison sentences and significant monetary sanctions. Our working paper, ‘Sanctions Imposed for Insider Trading in Australia, Canada (Ontario), Hong Kong, Singapore, New Zealand, the …
Fixing the Repo Market: The Piece Regulators Missed When Reforming the Financial Markets
We all remember the hectic summer and fall of 2008, when the U.S. financial system was at the brink of collapse. Since then, policymakers have enacted structural reforms to the financial system but left the market in repurchase agreements largely …
Gibson Dunn explains Delaware Decision Invalidating Attempt to Prevent Bankruptcy Through “Golden Share”
A Delaware bankruptcy court has invalidated a lender’s attempt to prevent a borrower from filing bankruptcy by having the borrower amend its operating agreement to require unanimous consent among its members to file bankruptcy and then issuing one “golden share” …
How Conservative Accounting Helped Boost Investment during the Financial Crisis
A host of studies have examined the link between accounting and the 2007-2008 global financial crisis, most of them focusing on whether fair value accounting or accounting discretion at financial institutions helped skew valuations on bank balance sheets. In our …
PwC discusses the SEC’s Reporting and Public Dissemination Rule: Five Key Points
On July 13, the Securities and Exchange Commission (SEC) adopted a final rule related to the reporting and public dissemination of security-based swap (SBS) transaction information. The rule builds on an earlier reporting rule for security-based swap dealers (SBSDs) finalized …