On March 15, 2024, the U.S. Court of Appeals for the Fifth Circuit issued a stay of the Securities and Exchange Commission’s new climate-disclosure rules, which were adopted March 6.
On March 1, 2024, a Federal District Court in Alabama held that the Corporate Transparency Act (the “CTA”) is unconstitutional.[1] The Court reasoned that the plaintiffs were entitled to summary judgment because the CTA “exceeds the Constitution’s limits on Congress’ power.” As the Court ruled Congress exceeded its enumerated powers, the Court found it unnecessary to render a decision on the plaintiffs’ other arguments, specifically, whether or not the CTA violates the First, Fourth, and Fifth Amendments.
On February 28, 2024, the SEC announced it will consider final rules for climate-related disclosures on March 6, 2024. A link to the announcement and agenda is here.
Hedge funds and private equity groups have long used the “limited partner exception” to minimize self-employment taxes, but on March 13, 2018, the IRS announced that it was going to increase its scrutiny on taxpayers utilizing that exception.[1] As part of that campaign, a number of cases are currently being litigated regarding the limited partner exception.[2] On November 28, 2023, the Tax Court issued its first ruling on one of the cases dealing with this exception, Soroban Capital Partners LP et al. v. Commissioner; 161 T.C. No. 12 (2023).
The Corporate Transparency Act ("CTA") reporting requirements take effect on January 1, 2024. The CTA requires many entities to disclose ownership information to the Financial Crimes Enforcement Network (“FinCEN”).
On November 22, 2023, the SEC issued an order postponing the effective date of rules that would require issuers to include detailed disclosures in periodic reports related to their share repurchases (the “Repurchase Rule”). For a summary of the Repurchase Rules, including Regulation S-K Items 408(d) and 703, see our Securities Snapshot: 3rd Quarter 2023 – Share Repurchase Rule Reminders.
On June 5, 2023, the New York Stock Exchange (NYSE) filed Amendment No. 1 to its proposed listing standard related to the Securities and Exchange Commission’s (SEC) Rule 10D-1 (the “Clawback Rule”), extending the effective date to October 2, 2023. On June 6, 2023, The Nasdaq Stock Market LLC (Nasdaq) also filed Amendment No. 1 to its proposed clawback listing standard, delaying the effective date until October 2, 2023.
On Friday, May 12, 2023, the U.S. Chamber of Commerce announced that it had filed a lawsuit against the SEC to prevent implementation of the SEC’s new Share Repurchase Disclosure Modernization rules, which KMK has recently discussed. The Chamber filed in the U.S. Court of Appeals for the Fifth Circuit, a conservative leaning court that has issued several high profile rulings adverse to the Biden administration.
On April 24, 2023, the Securities and Exchange Commission extended the time period to take action on proposed listing standards to implement the Dodd-Frank “Clawback Rules.” As discussed in a previous blog post, the SEC adopted Rule 10D-1, which required U.S. stock exchanges to adopt listing standards that comply with the SEC’s Clawback Rules.
On March 14, 2023, DXC Technology Company (“DXC”) settled with the Securities and Exchange Commission (“SEC”) for $8 million regarding alleged misleading disclosures in DXC’s public filings. The SEC claimed DXC made misleading disclosures related to its non-GAAP financial performance between 2018 and 2020.
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Recent Posts
- New SEC Climate Disclosure Rules – Temporarily Stayed
- Corporate Transparency Act Ruled Unconstitutional
- SEC Climate Rule Vote Scheduled for March 6, 2024
- Limited Partners’ Tax Savings from Self-Employment Taxes are under Scrutiny
- FinCEN Extends the Corporate Transparency Act Reporting Deadline for Newly Created Entities
- SEC Postpones Share Repurchase Modernization Disclosure Rules
- Effective Date of SEC Clawback Rule Finally In Sight
- SEC Sued Over Newly Adopted Share Repurchase Rules
- SEC Extends Period to Act on Exchange Clawback Rules
- SEC Charges Public Company for Misleading Non-GAAP Disclosures