Columbia Law School
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Thank you, Mr. Chairman, and thank you to my colleague Commissioner Peirce and the terrific Staff in the Division of Trading and Markets for all of the hard work that so clearly went into this proposal. I’m especially grateful to
SEC
Financial Misconduct and Strategic Corporate Disclosures
Financial misconduct can lead to significant financial and reputational penalties for a firm and its managers, including hefty fines from regulators and steep drops in stock price. In fact, recent research finds that firms accused of fraud lose an average …
SEC’s Co-Chief of Enforcement Talks Remedies and Relief
My remarks today come a little over a year after Stephanie Avakian and I were appointed Co-Directors of the SEC’s Division of Enforcement and just a few days after the close of the first full fiscal year in which we
Bonfire of the Vanities–2018 Style: The Case of Elon Musk
Elon Musk came close to doing something truly unique. No, not his electric car. Rather, he was about to roll the dice with his shareholders’ equity.
Securities analysts estimate that somewhere between 25 and 35 percent of the value of …
Resolving the Tension Between Efficiency and Inclusivity in Crowdfunding
There’s a contradiction at the core of securities crowdfunding, a form of Internet-based public stock market modelled on Kickstarter and its ilk. On the one hand, crowdfunding seeks to create an inclusive system where entrepreneurs, regardless of where they are …
SEC’s Co-Director of Enforcement Talks About Her Division’s Impact
My speech today [1] happens to fall a little less than two weeks before the close of Steve Peikin’s and my first full fiscal year as Co-Directors of the SEC’s Division of Enforcement. In many respects, a year is an
Sullivan & Cromwell Discusses SEC’s Withdrawal of Proxy Advisory Guidance
On September 13, the SEC’s Division of Investment Management withdrew two interpretive letters issued in 2004 to Egan-Jones Proxy Services (“Egan-Jones”) and Institutional Shareholder Services, Inc. (“ISS”). The letters described some of the guidelines under which an investment adviser could …
Did Deregulation End the “Quiet Period” of Low-Risk Banking?
From the New Deal until the 1970s, banks were on a tight leash. Regulators controlled the rate of interest they could pay on deposits. Banks could not underwrite or deal in corporate securities. With some exceptions, they could not expand …
Was Glass-Steagall’s Demise Both Inevitable and Unimportant?
The financial crisis of 2007-09 caused the Great Recession, the most severe global economic downturn since the Great Depression. The financial crisis began with the collapse of the subprime mortgage market in the U.S. and spread to financial markets around …
SEC Commissioner Jackson Issues Statement on Shareholder Voting
Today, the Office of the Chairman and the Division of Investment Management at the Securities and Exchange Commission suddenly raised questions about long-resolved issues regarding shareholder voting.[1] Because the Investor Advisory Committee’s critical work in this area is ongoing, …
How Private Equity Enhances the Market for Corporate Control and Capitalism
In this age of firebrand political rhetoric and sniping from the right and the left, Wall Street has taken more than its fair share of criticism. One of the most significantly misplaced criticisms, however, derives from a gross misunderstanding of …
Making Sustainability Disclosure Sustainable
Issuers, investors, and regulators are paying increasing attention to corporate sustainability. Commentators have proffered a variety of explanations for this attention ranging from the argument that corporations are morally obligated to act in a socially responsible manner to the claim …
Insider Trading Ahead of Cyber Breach Announcements
On March 14, 2018, the Securities and Exchange Commission charged a former chief information officer of Equifax with insider trading. The complaint alleged that he profited from selling stock ahead of the September 2017 public announcement of a major cybersecurity …
SEC Chair Clayton Talks Capital Formation
I am delighted to participate in the 36|86 Entrepreneurship Festival here in Nashville, Tennessee. I would like to speak for about 25 minutes about key capital formation initiatives at the SEC.[1] After my remarks, I will be joined by
What Really Drives “Short-Termism”?
Earlier this month, the CEO of Pepsi Co. suggested to President Trump that eliminating quarterly reporting (and shifting to biannual reporting) would reduce the pressure on managers to focus on the short-term. As impulsive as Elon Musk, the president bought …
Thinking Holistically Before Dropping Quarterly Reporting
Robust capital markets are widely believed to signal economic vitality, and a reliable barometer of such vitality was historically a rising number of IPOs and listings. Yet, as we are experiencing record setting economic expansion, that barometer has failed us. …
Financial Reporting Frequency
I should be a prime candidate to support the lengthening of the financial reporting cycle from three to six months, as the White House—and many others—now say they want the SEC to do. I want public corporations to be more …
Quarterly Reporting and Market Liquidity
Trading in U.S. equity markets is fast and cheap. While proponents of ending quarterly reporting point to the dangers of short-termism, less frequent disclosure is also likely to lead to a decline in liquidity and to greater trading costs. The …
Cutting Disclosure Frequency Is the Wrong Solution to the Wrong Problem
President Trump has directed the Securities and Exchange Commission to study whether a public company’s reporting requirements should shift from a quarterly to semi-annual schedule. Doing so, according to the president, “would make business (jobs) even better in the U.S.” …
SEC Chair Talks Investor Roundtables on Conduct Standards for Investment Professionals Rulemaking
In April 2018, the Commission proposed for public comment a significant rulemaking package designed to serve our Main Street investors that would (1) require broker-dealers to act in the best interest of their retail customers, (2) reaffirm and in some