SEC

Admissions and Accountability in Civil Enforcement

By Verity Winship and Jennifer K. Robbennolt November 7, 2017 by renholding

Whether and when targets of civil enforcement admit wrongdoing has been in and out of the public spotlight since the 2007-2008 financial crisis, when the issue seemed tied up in frustrations that suspected wrongdoers—especially banks and corporations—were getting off too …

Wachtell Lipton Discusses SEC’s Guidance on Shareholder Proposals

By David A. Katz, Trevor S. Norwitz, Sabastian V. Niles and S. Iliana Ongun November 6, 2017 by renholding

The SEC Division of Corporate Finance recently provided useful guidance on excluding certain Rule 14a-8 shareholder proposals (Staff Legal Bulletin No. 14I).  While helpful, we hope the SEC will undertake a much-needed comprehensive review of Rule 14a-8, including …

SEC Enforcement Co-Chief Talks Cybersecurity and Retail Investor Protection

By Stephanie Avakian November 1, 2017 by renholding

Good afternoon and thank you for inviting me to speak today. Before I begin, let me give the required disclaimer that the views I express here today are my own and do not necessarily represent the views of the Commission

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Arnold & Porter Discusses SEC’s Pay Ratio Guidance

By Joel I. Greenberg and Sara Adler October 31, 2017 by charlesbluesky

Item 402(u) of Regulation S-K was adopted in 2015 to implement the pay ratio disclosure provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and will require pay ratio disclosure with respect to the first fiscal year beginning …

SEC Commissioner Piwowar Speaks on Market Structure

By Michael S. Piwowar October 30, 2017 by renholding

These days you rarely hear the name Financial Industry Regulatory Authority (“FINRA”) in this town [Washington, D.C.] [1] without some mention of “FINRA 360,” the comprehensive self-evaluation initiated by FINRA President and CEO Robert Cook. From what I have seen …

Admissions in SEC Enforcement Cases: The Revolution that Wasn’t

By David Rosenfeld October 26, 2017 by renholding

In 2013, the Securities and Exchange Commission announced a new policy of sometimes requiring admissions when settling enforcement actions.  The policy was a radical departure from the agency’s more than four decades-old practice of allowing companies and individuals to settle …

Are Investors Influenced by the Order of Information in Earnings Press Releases?

By Lin Cheng, Darren Roulstone and Andrew Van Buskirk October 24, 2017 by renholding

Research has begun to analyze the tone and narrative structure of earnings announcements after decades of focusing on market reactions to the earnings news itself. One conclusion from this literature is that language matters – the tone (i.e., the excess …

Cleary Gottlieb Discusses SEC’s Proposed Changes to Public Company Disclosure

By Nicolas Grabar, Jeffrey D. Karpf, Sandra L. Flow, Andrea M. Basham and Gaia Goffe October 24, 2017 by renholding

On October 11, 2017, the SEC proposed a collection of amendments to its rules and forms intended to modernize and simplify some of the disclosure requirements applicable to U.S. public companies.[1]  The proposals would implement a statutory directive under …

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

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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 …