Columbia Law School
Sky Blog
Good afternoon.[1] I appreciate the opportunity to speak with you again today as part of the Corp Fin Workshop. I wanted to make a few remarks about the important work being done in the Division’s Disclosure Review Program and
disclosure
Leveraging Information Forcing in Good Faith
The duty of good faith and oversight, which is a branch of the duty of loyalty, has been the subject of considerable litigation in recent years, with cases revealing significant information asymmetries between directors and management. These cases are subject …
How Bank Regulation and Supervision Can Weaken Financial Stability
We argue that bank regulation and supervision interfere with pricing risk by creating opacity. Given that market disclosures enhance the efforts of supervisors, and vice versa, more disclosure could enhance financial stability (see Spatt, 2010)[1]. In addition, we …
Should Companies Announce Reviews of Strategic Alternatives?
A company’s announcement that it is undertaking a “review of strategic alternatives” is Wall Street code for exploring a potential sale or merger. Though no transaction may occur, the announcement signals that the company is due for a shake up, …
Why Do Companies Keep Their Loan-Covenant Details Secret?
It’s surprisingly tough to find detailed information about the loan agreements of many public companies. In fact, nearly 20 percent of those agreements are not publicly available, despite disclosure mandates. In a recent study, we shed light on this phenomenon, …
The EU Listing Act Shows How EU and U.S. Law Are Converging on the Duty to Disclose Inside Information
Last February, the European Council and the European Parliament reached a final compromise on an EU Listing Act.[1] The act aims to make listings in the EU – and raising capital through the stock market – more attractive by …
Silent Greenwashing: The Economic Case for Moving from Voluntary to Mandatory Environmental Disclosure
As consumers demand protections for the environment, corporations increasingly tout their sustainability efforts. Yet, economic indicators demonstrate that those efforts are mostly talk. Research and development on greener products and processes remains remarkably low, at about 4 percent of global …
Do Investors Care Who Led the Audit?
Following a lengthy and contentious standard setting process, the Public Company Accounting Oversight Board (PCAOB), the U.S. regulator overseeing the auditors of publicly traded companies, implemented Rule 3211 in 2017. This rule requires audit firms to disclose the name of …
SEC Chair Speaks on Mandatory Disclosure at Conference Honoring John C. Coffee, Jr.
Today, Columbia is honoring Jack Coffee, a leader of securities law scholarship and policy. I hope Columbia one day might invite me back to celebrate your career, Professor Fox. Caveat inviter, though, at the SEC, we are Merritt neutral. As …
Arnold & Porter Discusses Delaware Chancery Ruling in Microsoft-Activision Blizzard Deal
On February 29, the Delaware Chancery Court declined to dismiss claims that the process followed in obtaining board and stockholder approval of the merger of Activision Blizzard, Inc. with a subsidiary of Microsoft failed to comply with the requirements of …
Why Corporate Governance Needs to Account for Data-Driven Mergers
Why might an insurance company acquire a robot manufacturer or a retailer acquire a home security provider? The answer might have once been diversification, but now it is more likely to be a desire for data. A new type of …
SEC Chair Gensler on Final Rules Regarding Mandatory Climate Risk Disclosures
Today [March 6], the Commission is considering whether to adopt final rules to mandate climate risk disclosures by public companies and in public offerings. I am pleased to support this adoption because it benefits investors and issuers alike. It would …
Commissioner Dissents from SEC Rule on Climate-Related Disclosures
Today [March 6], much emphasis will be placed on how this rule has been dialed-back from the proposal, is focused on providing material information to investors, and that the Commission is not a climate regulator. To that, I emphasize the
Wachtell Lipton Discusses AI in the 2024 Proxy Season: Managing Investor and Regulatory Scrutiny
Corporate disclosures concerning artificial intelligence have increased dramatically in the past year, with Bloomberg reporting that nearly half of S&P 500 companies referenced AI in their most recent annual reports. And some investors are clamoring for even more, using shareholder …
Skadden Discusses Final SEC Rules on SPACs and De-SPACs
On January 24, 2024, the Securities and Exchange Commission (SEC) adopted final rules that impose significant additional procedural and disclosure requirements on initial public offerings (IPOs) by special purpose acquisition companies (SPACs) and in business combination transactions involving SPACs (de-SPACs). …
The Role of Corporate Boards in Disclosure Policy and Enforcement
Managers have strong incentives to present a favorable image of their companies to investors, analysts, and the public, raising concerns about the credibility of voluntary disclosures. These concerns are particularly severe for unaudited forward-looking disclosures because they are often qualitative …
What Explains the Rise of ESG Assurance?
Over the last decade, investors and other stakeholders have demonstrated a preference for firms that embrace good environmental, social, and governance (ESG) practices. It is natural, therefore for firms to try to improve their ESG profiles through ESG disclosures. The …
Skadden Discusses FBI, DOJ, and SEC Guidance on Disclosing Cybersecurity Incidents
The U.S. Securities and Exchange Commission (SEC) adopted final rules in 2023 that are intended to enhance and standardize disclosures regarding cybersecurity risk management, strategy, governance and incident reporting by public companies (including foreign private issuers). The SEC Form 8-K …
Dual-Class IPOs Offer Solution to Unicorn Governance Failure
Dual-class stock structures have proliferated in recent years. In 2017-2019, almost 30 percent of IPOs in the U.S. had a dual-class structure, and most of them were founder-controlled technology firms (Aggarwal, Eldar, Hochberg and Litov, 2020). Their increasing popularity has …
Sullivan & Cromwell Discusses FTC Rules on Non-Bank Financial Institutions and Data Breaches
On October 27, 2023, the Federal Trade Commission (“FTC”) voted to approve supplemental amendments to the Safeguards Rule (the “Final Rule”) that will require non-bank financial institutions to notify the FTC electronically as soon as possible, and no later than …