Do Companies Lobby Against Mandatory Disclosure to Protect Proprietary Information?

By Ying Zhou January 26, 2022 by renholding

Critics of mandatory public disclosure often argue that it may put disclosing firms at a competitive disadvantage by requiring them to reveal potentially proprietary information to rivals. For instance, when the Financial Accounting Standards Board (FASB) proposed to mandate more …

Climate-Risk Disclosures and “Dirty Energy” Transfers: “Progress” Through Evasion

By John C. Coffee, Jr. January 25, 2022 by renholding

At first glance, recent progress towards transparency in corporate climate-risk disclosures seems exceptional. Over 2,000 companies now publish annual reports showing their carbon emissions data (although most self-interestedly omit Scope 3 data). Many (including most recently ExxonMobil) have made a …

Mandatory Corporate Climate Disclosures: Now, but How?

By John Armour, Luca Enriques and Thom Wetzer January 10, 2022 by renholding

Climate change is one of today’s most salient policy challenges. Under the Paris Agreement, 195 governments agreed to limit temperature increases to well below 2, preferably 1.5, degrees centigrade relative to pre-industrial levels. Since the magnitude of global warming is …

How Does Better Access to Public Firm Disclosures Affect IPO Firm Financing?

By Shawn Shi January 7, 2022 by renholding

Financial markets affect the economy in a fundamental way by facilitating the creation of capital. The market for initial public offerings (IPO) – also known as the “primary market” – is especially important because it allows fast-growing and innovative companies …

Does SEC Scrutiny Improve Mutual Fund Disclosures?

By Kai Du and Shuyang Wang January 5, 2022 by renholding

Millions of investors rely on the disclosures of U.S. registered mutual funds in making their investment decisions, but some of the most influential industry opinion leaders and legal scholars have criticized the quality of those disclosures. Like public companies, mutual …

Corporate Disclosure: Facts or Opinions?

By Shimon Kogan and Vitaly Meursault January 3, 2022 by renholding

When it comes to financial disclosure, headline numbers are not all that matters. Equally important are what company executives talk about – and even how they talk about it. A large and growing body of literature in finance and accounting …

SEC Considers Amendments to Rule 10b5-1

By Reynolds Holding December 16, 2021 by renholding

It was a very busy day at the U.S. Securities and Exchange Commission yesterday, with the commission weighing in on several proposed rule changes. For starters, the commission considered proposed amendments to Rule 10b5-1 and new disclosure requirements designed to …

SEC Considers Proposals to Enhance Buybacks Disclosure

By Reynolds Holding December 16, 2021 by renholding

On December 15, the U.S. Securities and Exchange Commission considered proposals to enhance disclosure about stock buybacks. Commission Chairman Gary Gensler’s statement supporting the proposals is available here. The statements of commissioners Caroline A. Crenshaw and Allison Herren Lee in …

Compensation Disclosure: A Study Based on Semantic Similarity

By Maclean Gaulin and Xiaoxia Peng December 15, 2021 by renholding

How companies determine executive compensation plays a critical role in corporate governance by helping recruit, motivate, and retain key employees. Not surprisingly, it has attracted broad attention from academics, investors, regulators, and the general public. In a recent study, we …

SEC Chair Gensler Speaks on the Risks of SPACs

By Gary Gensler December 13, 2021 by renholding

Thank you for the kind introduction, Ty [Gellasch]. It’s great to be with the Healthy Markets Association.

As is customary, I’d like to note that my views are my own, and I am not speaking on behalf of my fellow

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Mandatory vs. Voluntary ESG Disclosure, Efficiency, and Real Effects

By Cyrus Aghamolla and Byeong-Je An December 8, 2021 by renholding

In recent years, several countries have imposed disclosure requirements on public firms for environmental, social, and governance (ESG) performance. These mandates have also been accompanied by the European Union’s wide-reaching Non-Financial Reporting Directive, effective in 2018 (Directive 2014/95/EU). Similar legislative …

Does More Effective Director Monitoring Make Management Guidance More Credible?

By Tyler Jensen, Marlene Plumlee and Jared I. Wilson December 6, 2021 by renholding

One of management’s many important roles is to provide information to market participants. However, this information may be self-serving rather than beneficial to the market, especially in the case of voluntary disclosure. To curb this possibility, boards of directors are …

Modernizing ESG and Climate Risk Disclosure

By Virginia Harper Ho November 11, 2021 by renholding

On November 3, timed to coincide with the United Nation’s COP26 climate summit in Glasgow, the IFRS Foundation announced prototype global reporting standards for corporate climate and sustainability disclosures, and the formation of the International Sustainability Standards Board (ISSB) to …

The Dark Side of Information Dissemination

By Charles G. McClure, Shawn X. Shi and Edward M. Watts November 8, 2021 by renholding

For decades, there has been an important debate over how much securities regulators should focus on protecting small investors. The regulators themselves have generally aimed to create a level playing field among investors, and historically, new technology has been an …

Top Justice Department Official on Stepping Up Corporate Enforcement

By John Carlin October 26, 2021 by benzonenshayn

I think these events [the Global Investigations Review conference: New York] are an important opportunity for discussion of trends and really this area is one where your work, your advice to clients, changes the way that people behave. And it …

SPACs: The Roles of Reputation and Disclosure When Information Is Limited

By Andrea Pawliczek, A. Nicole Skinner and Sarah Zechman October 25, 2021 by renholding

Special purposes acquisition corporations (also known as SPACs or blank check companies) have received a lot of attention recently – and for good reason. SPACs accounted for more than half of U.S. IPOs in 2020, raising over $70 billion in …

Sullivan & Cromwell Discusses White House Roadmap to Address Climate-Related Financial Risk

By Michelle C. Chen, Catherine M. Clarkin, H. Rodgin Cohen, Samuel R. Woodall III and Lauren M. Hobby October 25, 2021 by renholding

On October 14, 2021, the White House issued a report entitled “A Roadmap to Build a Climate-resilient Economy.”[1] The 40-page report was mandated by President Biden’s May 2021 executive order on “Climate-Related Financial Risk” (the “EO”)[2] and presents …

Sullivan & Cromwell Discusses SEC Proposal to Enhance Proxy Voting Disclosure by Investment Funds

By Donald R. Crawshaw, Eric M. Diamond, Joseph A. Hearn, Sarah P. Payne and Marc Trevino October 11, 2021 by benzonenshayn

On September 29, 2021, the SEC issued a proposed rulemaking to enhance the information mutual funds, exchange-traded funds and other registered management investment companies (“funds”) report annually about their proxy votes. The proposal also would require so-called “institutional investment managers” …

The Leverage Effect of Bank Disclosures

By Philipp J. König, Christian Laux and David Pothier October 7, 2021 by renholding

In a new paper, The Leverage Effect of Bank Disclosures, we challenge the widespread view that disclosure requirements prompt banks to reduce their risk and leverage. That view has prevailed since at least 2004, when the Basel Committee introduced Pillar …

SEC Chair Gensler Testifies Before U.S. House Committee on Financial Services

By Gary Gensler October 7, 2021 by renholding

Good afternoon, Chairwoman Waters, Ranking Member McHenry, and members of the Committee. I’m honored to appear before you today for the second time as Chair of the Securities and Exchange Commission. As is customary, I will note that my views

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