Commissioner Dissents from SEC Rule on Climate-Related Disclosures

By Mark T. Uyeda March 7, 2024 by renholding

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

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Wachtell Lipton Discusses AI in the 2024 Proxy Season: Managing Investor and Regulatory Scrutiny

By William Savitt, Mark F. Veblen, Kevin S. Schwartz, Noah B. Yavitz, Carmen X. W. Lu and Courtney D. Hauck March 6, 2024 by renholding

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

By Andrew J. Brady, Joshua Shainess, Michael K. Hoffman, C. Michael Chitwood and Gregg. A Noel February 16, 2024 by renholding

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

By George Drymiotes, Zijun Liu and Shiva Sivaramakrishnan February 7, 2024 by renholding

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?

By Shawn Shi January 16, 2024 by renholding

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

By Brian V. Breheny, Raquel Fox, William Ridgway, David A. Simon and Khadija L. Messina January 3, 2024 by renholding

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

By Ofer Eldar December 18, 2023 by renholding

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

By Jared M. Fishman, Nicole Friedlander, Anthony J. Lewis, Shaun Her and Aaron M. Levine November 8, 2023 by renholding

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 …

What Is the Global Impact of Mandatory Climate-Related Disclosures?

By Lucas Mahieux, Haresh Sapra and Gaoqing Zhang November 6, 2023 by renholding

In response to extreme weather events, regulators and standard setters are developing climate-related reporting requirements and standards. The thinking behind making disclosure of firms’ climate-related risks mandatory is that it will allow the market to price these risks, thereby using …

Addressing Climate Change Requires Creating Utilities With Purpose

By Joel B. Eisen and Heather E. Payne October 31, 2023 by renholding

Environment, social, and governance (ESG) reporting has become a mainstay of corporate and investment decision-making. Corporations are increasingly making ESG disclosures to assess and limit risks, bolster their reputations, and attract and keep customers. In a new paper, we focus …

Why the SEC’s SPAC Solution Makes Sense

By Karen E. Woody and Lidia Kurganova October 26, 2023 by renholding

On March 30, 2022, the SEC proposed much-anticipated regulations governing Special Purpose Acquisition Companies (“SPACs”), which provide an alternative route for a company to be traded on a national exchange without undertaking the cumbersome process of an initial public offering …

SEC Commissioner Peirce Declines to Support Rule on Short Sale Disclosure

By Hester M. Peirce October 16, 2023 by renholding

In 2010, Congress directed the Commission to prescribe rules providing for the public disclosure of aggregate short sale position data on at least a monthly basis.[1] The final rule that we are considering today, however, goes well beyond what

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Was the Exchange Act Redundant? The Questionable Legality of an SEC Commissioner’s Unicorn Reform Proposal

By Alexander Platt September 18, 2023 by renholding

The rise of private markets and the proliferation of “unicorns” (private startup companies valued at $1 billion or more) has diminished the SEC’s power and reach. Back in 2021, the agency signaled a plan to reassert itself by forcing unicorns …

Cleary Gottlieb Discusses DOJ, Commerce, and Treasury Advisory on Voluntary Self-Disclosure Policies

By David Last, Abena Mainoo, Chase Kaniecki, Samuel Chang and Andrew Saba August 14, 2023 by renholding

On July 26, 2023, the U.S. Department of Justice’s National Security Division (“NSD”), the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”), and the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a Tri-Seal …

Does Enhanced Disclosure Curb CEO Pay?

By Ilona Babenko, Benjamin Bennett and Zexi Wang August 10, 2023 by renholding

High CEO pay in the United States has fueled repeated calls for enhanced disclosure of chief executives’ compensation. For example, in 2015 the SEC received over 285,000 comment letters supporting its proposed rule to require disclosure of CEO-employee pay ratios. …

SEC Chair Supports Rules on Public Company Cybersecurity Disclosures

By Gary Gensler July 27, 2023 by renholding

Today [July 26], the Commission is considering adopting final rules regarding cybersecurity disclosures by public companies. I am pleased to support these rules because they will enhance and standardize disclosures to investors with regard to public companies’ cybersecurity practices as

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SEC Commissioner Peirce Dissents from Rules on Cybersecurity Disclosure

By Hester M. Peirce July 27, 2023 by renholding

Thank you, Chair Gensler. Although better than the proposal, this final cybersecurity disclosure rule continues to ignore both the limits to the SEC’s disclosure authority and the best interests of investors. Moreover, the Commission has failed to explain why we

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How the SEC Uses Information Disclosed on Earnings Conference Calls

By Alina Lerman, Thomas D. Steffen and Kangkang Zhang July 24, 2023 by renholding

Earnings conference calls are an important way for firms to communicate with external stakeholders. Equity shareholders, buy-side and sell-side analysts, debtholders, and other capital market participants view the calls as informative beyond the contemporaneous earnings announcements. Yet, little is known …

Skadden Discusses Increasing Scrutiny of Companies’ ESG Disclosures — Including by ESG Critics

By Tansy Woan and Matthew M. Jang July 6, 2023 by renholding

As public interest and scrutiny into environmental, social and governance (ESG) issues continue to rise, companies face an ever-evolving landscape relating to their ESG disclosures. The Securities and Exchange Commission (SEC) has proposed rules that could require increased ESG disclosures. …

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