SEC

Is It Time to Retire Securities Act Form S-8?

By Keith F. Higgins October 13, 2017 by renholding

Every securities lawyer knows that offers and sales of securities must either be registered under the Securities Act of 1933 (Securities Act) or made pursuant to an applicable exemption.  This rule is so fundamental that we often neglect to think …

SEC Chair Clayton Speaks at Open Meeting on Reg S-K Reform

By Jay Clayton October 12, 2017 by renholding

Good morning.  This is an open meeting of the United States Securities and Exchange Commission on October 11, 2017 under the Government in the Sunshine Act.

This also marks my first open meeting as Chairman.  I am delighted that today

…

CamberView Partners Discusses SEC Guidance on New Pay Ratio Rule

By Abe M. Friedman, Sharo M. Atmeh, Lauren D. Gojkovich and Troy A. Paredes September 27, 2017 by renholding

On September 21, the U.S. Securities and Exchange Commission (SEC) issued guidance on the implementation of the Pay Ratio disclosure requirement as well as separate guidance from SEC staff concerning the use of sampling and other methodologies. Concurrently, the staff …

Morrison & Foerster Discusses Blockchain and Avoiding a Kodak-Like Downfall

By F. Dario de Martino and Spencer D. Klein September 26, 2017 by renholding

For most of the 20^th Century, Eastman Kodak Company (often referred to simply as Kodak) was one of the most recognizable brands in the world. Founded in 1888, Kodak dominated the film and camera markets — in 1976, Kodak …

Latham Discusses How Second Circuit Broadened Personal Benefit Test for Insider Trading

By William R. Baker III, Joshua G. Hamilton, Douglas K. Yatter, Nicholas L. McQuaid and Kaitlin A. Wallace September 13, 2017 by renholding

On August 23, 2017, the Second Circuit issued its second significant decision on insider trading liability in the past three years, United States v. Martoma. In its 2014 decision in United States v. Newman, the Second Circuit limited …

Mandatory Arbitration Does Not Give Stockholders a Choice

By Samuel M. Ward and Michael A. Toomey August 28, 2017 by renholding

An August 21 blog post, “Shareholders Deserve Right to Choose Mandatory Arbitration,” by Professor Hal S. Scott, argues that the introduction of mandatory arbitration clauses into corporate charters would be good for stockholders. Nothing could be further from the truth.…

How the SEC Neglects to Enforce Control Person Liability

By Marc I. Steinberg and Forrest Colby Roberts August 24, 2017 by renholding

Scholars and politicians alike have spoken and written at great length about the importance of gatekeepers in our current corporate governance system. However, relatively little has been done to discipline  gatekeepers who seem to have lost the keys to the …

Shareholders Deserve Right to Choose Mandatory Arbitration

By Hal S. Scott August 21, 2017 by renholding

On July 17, SEC Commissioner Michael Piwowar extended an important invitation to U.S. public companies. “For shareholder lawsuits,” Piwowar offered, “companies can come to [the SEC] to ask for relief to put… mandatory arbitration into their charters.” To some, this …

Cleary Gottlieb Discusses Federal Spoofing Conviction

By Lewis J. Liman, Jonathan S. Kolodner and Matthew Solomon August 16, 2017 by renholding

On August 7, 2017, the U.S. Court of Appeals for the Seventh Circuit unanimously upheld Michael Coscia’s conviction on spoofing and commodities fraud charges in United States v. Coscia, No. 16-3017 (KFR), 2017 WL 3381433 (7th Cir. Aug. 7, …

Debevoise & Plimpton Discusses SEC View of Blockchain Tokens as Securities

By Lee A. Schneider, Steven J. Slutzky Samuel E. Proctor and Lilya Tessler August 2, 2017 by renholding

On July 25, 2017, the Securities and Exchange Commission (“SEC”) Division of Enforcement issued a report of investigation under Section 21(a) (the “Report”) concluding that blockchain tokens sold by The DAO (“DAO Tokens”) were securities as defined under relevant law. …

Insider Trading: Personal Benefit Has No Place in Misappropriation Tipping Cases

By Merritt B. Fox and George Tepe July 25, 2017 by renholding

The Supreme Court’s decision last December in Salman v. United States[1] settled important issues concerning Rule 10b-5’s reach over trades based on a tip of confidential material information. One important question, however, remains unanswered: In tipping cases based on …

Cheating the Algorithm: The New “Pump and Dump” Fraud

By John C. Coffee, Jr. July 24, 2017 by renholding

Old frauds never die. Nor do they fade away. Rather, they mutate and morph into new configurations in response to new opportunities (which new technologies usually create). Thus, the traditional boiler room “pump and dump” scheme was a product of …

SEC Chair Clayton Lays Out Plans and Principles in First Public Speech

By Jay Clayton July 13, 2017 by renholding

I am delighted to speak to you here at the Economic Club of New York.  The Club has established itself as an esteemed, non-partisan forum for economic discourse.  It is an ideal place to discuss policy of the U.S. Securities …

SEC’s Acting Chief Economist Discusses Role of Big Data, Machine Learning, and AI in Assessing Risk

By Scott W. Bauguess July 7, 2017 by renholding

This is the first time that I have addressed the emergence of AI in one of my talks. But I have spoken previously on the two core elements that are allowing the world to wonder about its future: big data …

Conflicts and Capital Allocation

By Benjamin Edwards June 28, 2017 by renholding

In the aggregate, retail investors allocate tremendous amounts of capital and often turn to financial advisers to help them pick the best investment opportunities. In a recently published article, I describe how financial adviser conflicts of interest now distort …

The Shifting Purpose of the Rule 10b-5 Private Right of Action

By Amanda Rose June 27, 2017 by renholding

Private Rule 10b-5 lawsuits have inspired volumes of academic literature, much of it focused on the suits’ social benefits (or lack thereof, depending on the author’s perspective). In a chapter for the forthcoming Research Handbook on Representative Shareholder Litigation, I …

The Financial CHOICE Act of 2017 and the Future of SEC Administrative Enforcement

By John C. Coffee, Jr. June 22, 2017 by renholding

Professor John C. Coffee, Jr. of Columbia Law School is scheduled to speak on June 22 before the Securities and Exchange Commission’s Investor Advisory Committee, which asked him to address the CHOICE Act’s impact on the SEC’s enforcement powers. These …

King & Spalding Discusses Potential Effects of SEC Disgorgement As a Penalty

By Dixie L. Johnson, Carmen Lawrence, M. Alexander Koch, Matthew H. Baughman and Abraham N.M. Shashy, Jr. June 21, 2017 by renholding

In the week since the Supreme Court’s unanimous decision in Kokesh v. SEC,^[1] which rejected the Securities and Exchange Commission’s longstanding position that disgorgement was an equitable remedy not subject to the five-year statute of limitations in 28 …

Skadden Discusses Potential Impacts of the Financial CHOICE Act

By Brian V. Breheny and Marc S. Gerber June 14, 2017 by renholding

On June 8, 2017, the House of Representatives passed, by a 233-186 vote (with all Democrats and one Republican voting against), the Financial CHOICE Act of 2017, a bill principally designed to reverse many features of the Dodd-Frank Wall Street …

Why It Is Getting Harder to Prosecute Executives for Corporate Misconduct

By Peter Henning June 13, 2017 by renholding

The era of large corporate penalties certainly looks to be over, and it is an open question whether we will continue to see companies pleading guilty or settling cases with deferred prosecution agreements. The notion of not imposing costs on …