KMK Law Corporate & Securities Blog

On September 29, 2021, the Securities and Exchange Commission released a notice filed by the New York Stock Exchange (“NYSE”) of a proposed rule change. The NYSE seeks approval of a proposed amendment to the shareholder voting requirement set forth in Section 312.07 of the NYSE Listed Company Manual (the “Manual”).

Currently, Section 312.07 provides that, where shareholder approval is required for the listing of any new or additional securities, or where any matter requires shareholder approval, including for stock issuances pursuant to an equity compensation plan, the ...

On August 16, 2021, the Securities and Exchange Commission imposed a cease-and-desist order and a $1 million civil penalty on Pearson plc, finding violations of the negligence-based antifraud provisions of the Securities Act.

This is an update to KMK’s original blog post on December 4, 2020.

On December 1, 2020, Nasdaq filed a rule proposal with the U.S. Securities and Exchange Commission that would require listed companies to have, or explain why their boards do not include, diverse directors. In a response to comments from the SEC, Nasdaq filed an amendment to the rule proposal on February 26, 2021. The Nasdaq proposal needs SEC approval to take effect.

In a notice posted on its website on March 10, 2021, the SEC said it would take additional time to rule on the Nasdaq proposal, while also seeking further ...

On March 5, 2021, the U.S. Securities and Exchange Commission announced it charged AT&T, Inc. and three of its investor relations executives with selectively disclosing material nonpublic information to research analysts in violation of Regulation FD. The SEC’s complaint alleges that to avoid falling short of the consensus revenue estimates for the third consecutive quarter, AT&T investor relations executives made private, one-on-one phone calls to analysts at several firms.  According to the complaint, on these calls, the executives disclosed internal smartphone ...

On Dec. 1, 2020, Nasdaq filed a rule proposal with the U.S. Securities and Exchange Commission that would require listed companies to disclose board diversity statistics using Nasdaq’s Board Diversity Matrix. Nasdaq would require companies to provide this disclosure in proxy materials or on company websites within one year of the SEC’s approval of the rules. The rules also would require listed companies to have, or explain why their boards do not include, diverse directors as follows:

• All listed companies would be expected to have one diverse director within two years of the ...

On November 2, 2020, the Securities and Exchange Commission adopted rule amendments intended to increase opportunities for private companies to raise capital, including by setting higher limits on certain private offerings.  The SEC also simplified certain rules governing private offerings relating to investor communications and otherwise expanding investment opportunities.  In addition to expanding access to capital for private issuers, the intent of these amendments is to make it simpler for issuers to comply with increasingly complex SEC rules, including by eliminating ...

On October 7, 2020, the SEC proposed a limited, conditional exemption from broker registration requirements for "finders" who assist issuers with raising capital in private markets from accredited investors. Finders identify and often solicit potential investors in order to connect issuers with investors in private placements of securities. The proposal responds to the lack of clarity regarding the regulatory status of finders which has developed through case law, no action letters and other SEC guidance.

On May 21, 2020, the U.S. Securities and Exchange Commission adopted amendments to its rules and forms governing the financial information registrants are required to provide for significant acquisitions and divestitures. We expect the amendments will decrease the time and cost of preparing financial statements required in business combinations.

When a registrant acquires a significant business, other than a real estate operation, SEC rules generally require the registrant to provide separate audited annual and unaudited interim pre-acquisition financial statements of ...

SEC Provides Guidance on Earnings Disclosures & COVID-19 Impacts

On April 8, 2020, Jay Clayton, Chairman of the SEC, and William Hinman, Director of the SEC’s Division of Corporation Finance, issued a statement discussing the importance of disclosures related to the COVID-19 pandemic in anticipation of upcoming earnings releases and investor calls. In order to encourage more robust disclosures and shareholder engagement on this topic, the statement outlines, among others, several areas of observation and concern for companies:

• Disclosures should reflect the general ...

On March 25, 2020, the Securities and Exchange Commission (the “SEC”) extended its March 4, 2020 Order (the “Extended Order”) granting exemptions to reporting and proxy delivery requirements for public companies. The Extended Order (described in our advisory here) provides reporting relief for public companies with reports due on or before July 1, 2020.