Corporate & Securities Blog

The SEC released a statement from Division of Corporation Finance Director Erik Gerding on June 24, 2024 reflecting Gerding’s opening remarks and the matters discussed on a panel addressing the Division's Disclosure Review Program during the April 2024 SEC Speaks Conference in Washington, DC. The statement provides a comprehensive overview of recent developments in the Division and observations gleaned from the review of filings.

On April 5, 2024, a jury in Federal Court in California found that the SEC established that Defendant Matthew Panuwat was liable under a civil misappropriation theory of insider trading violations of Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. Panuwat formerly worked at a biopharmaceutical firm, Medivation, and bought call options in the biopharmaceutical firm Incyte minutes after learning that Medivation was to be acquired at a significant premium. When the Medivation transaction was announced, Incyte’s stock price increased and Panuwat sold his Incyte investment at a significant profit.

The U.S. Securities and Exchange Commission announced on April 4, 2024 that it is voluntarily delaying the
implementation of its climate disclosure regulations while it fights an Eighth Circuit Court challenge seeking
to vacate the rules.

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 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.

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 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.

On October 7, 2022, the SEC reopened the public comment periods for eleven proposed rules including, among others, proposed rules relating to the following: the enhancement and standardization of climate-related disclosures for investors; enhanced ESG disclosures for investment funds and investment advisers; cybersecurity breach and risk disclosures; share buyback disclosures; and SPAC projections. The SEC reopened the comment periods after it discovered a technological error had prevented it from receiving certain comments.  While affected comments were largely submitted in August 2022, the error is reported to have occurred as early as June 2021.

On May 2, 2022 the SEC’s Division of Corporation Finance issued a sample comment letter addressing disclosures companies should consider regarding Russia’s invasion of Ukraine. The SEC Staff believes companies should provide detailed disclosures of their direct or indirect exposure to Russia, Belarus, and/or Ukraine including through operations, investments, and potential cybersecurity and supply chain risks. A link to the sample letter is here.

The sample comment letter lists several topics subject to disclosure consideration the SEC Staff will focus on:

• Companies ...