As we explained in our September 2019 Snapshot, on August 21, 2019, the SEC issued new guidance regarding the role of proxy advisors in the proxy voting process. We expect this guidance to play an important role in the upcoming 2020 proxy season, as the SEC further defines the voting obligations of registered investment advisors and seeks to promote greater accountability on the part of the proxy advisory firms. Read more here.
On August 21, 2019, the SEC issued an interpretation and related guidance regarding the applicability of certain rules to proxy advisory firms. The SEC interpretation imposes new regulatory oversight on proxy advisory firms that clarifies that proxy advisers are subject to Rule 14a-9 and the anti-fraud rules concerning materially false or misleading statements.
We expect proxy advisory firms will provide additional disclosures in in their reports in response to the guidance, such as:
- Explanations of the methodology used to formulate voting advice;
- Disclosures of peer group ...
The Securities and Exchange Commission voted on March 20, 2019 to adopt amendments to certain disclosure requirements for public companies. These amendments are intended to modernize and simplify disclosure requirements and make it easier for investors to access and analyze material information. Other expected benefits are lower costs and burdens on companies, improved readability and navigability of disclosure documents and reduced repetition of immaterial information.
Some of the disclosure simplifications include the following:
Summary Description of Amended ...
On September 29, 2018, the Securities and Exchange Commission (the “SEC”) announced that CEO and Chairman of Tesla, Elon Musk, had agreed to settle securities fraud charges brought by the SEC and that Tesla had agreed to settle SEC charges that it failed to have required disclosure controls and procedures covering Mr. Musk’s tweets.
Several companies have asked us about the status of registrations and qualifications of security token offerings (STOs) / initial coin offerings (ICOs) with the Securities and Exchange Commission. There is not much to report.
On September 21, 2017, the Securities and Exchange Commission (SEC) issued interpretive guidance on the CEO pay ratio rule. Simultaneously, the SEC’s Division of Corporation Finance issued guidance on calculation of the pay ratio and updated C&DIs related to the new guidance. Together, these issuances strongly suggest that the SEC is not modifying or deferring the effectiveness of the rule and that it will be in place for the upcoming 2018 proxy season.
Protecting and encouraging whistleblowers has been a priority for the U.S. Securities and Exchange Commission (“SEC”) and its enforcement division. The SEC recently announced enforcement actions against two companies for their use of restrictive language in severance agreements that required departing employees to waive their rights to any monetary recovery under Rule 21F-17 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The rule, promulgated under the Dodd-Frank Act, is part of the SEC’s whistleblower program and is intended to prohibit employers from interfering with an employee’s right to report potential securities law violations to the SEC.
A new tool to raise capital is now available for small business and startup owners who may have previously believed that raising funds through selling an interest in their business to be too cumbersome or expensive.
While several years have passed since the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Jumpstart Our Business Start-Ups Act took effect, several high-profile provisions of each act have not yet been implemented as final rules await adoption by the Securities and Exchange Commission. This advisory reviews certain provisions of each act and summarizes other related securities regulation developments.
As mandated by 2012’s Jumpstart Our Business Startups Act (“JOBS Act”), the Securities and Exchange Commission has proposed amendments to the thresholds at which a company will be required to register its equity securities under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) and thus be subject to the Exchange Act’s periodic reporting obligations. Exchange Act registration would now be required only when a company has more than $10 million in assets and a class of equity securities “held of record” by either: (a) 2,000 persons (up from 500 persons), or (b) 500 persons or more who are not “accredited investors” under SEC rules (with the determination being made as of the last day of the fiscal year). The proposal would also amend the threshold requirements for banks or bank holding companies to terminate or suspend the registration of a class of securities under the Exchange Act from 300 to 1,200 persons.
- Securities Law
- Securities Regulation
- Proxy Access Rules
- Tax Planning
- Corporate Law
- FAST Act
- JOBS Act
- Opportunity Zone
- SEC Enforcement
- Corporate Tax
- Real Estate Law
- Cybersecurity and Privacy Law
- Emerging Growth Companies
- Consumer Protection Act
- Corporate Governance
- Conflict Minerals
- Pay Ratio Disclosure
- Securities Litigation
- Accredited Investors
- Sales Tax
- United States Supreme Court
- Online Trading Platforms
- Mergers & Acquisitions
- Registration Statement
- Annual Reports
- Ohio Foreclosure Reform
- Family-Controlled Entities
- Gift and Estate Transfers
- Director Compensation
- Health Care Act
- Executive Compensation
- Board of Directors
- Director Independence
- Clawback Rules
- Cyber Insurance
- Data Breach
- Regulation A
- Regulation D
- Total Shareholder Return
- Wall Street Reform
- Business Process Improvement
- Employer Policies
- Employment Litigation
- Labor & Employment Law
- Labor Law
- Receivership Statute
- Sixth Circuit
- Compensation Committee Certification
- CDFI Fund
- Community Development Entities
- Community Development Financial Institutions Fund
- Government Shutdown
- New Markets Tax Credit
- NMTC Financing
- Regulation Fair Disclosure
- Social Media
- Healthcare Reform
- Public Company Transition Rules
- Employment Incentives
- HIRE Act
- Social Security Tax
- Tax Credit
- More Developments from the SEC and Proxy Advisory Firms
- IRS Issues New Virtual Currency Guidance
- SEC Rules Expanding "Testing the Waters" For Registered Offerings
- Interpretation and Guidance Regarding the Applicability of the Proxy Rules
- Proposed Amendments to Modernize Disclosures of Business, Legal Proceedings, and Risk Factors Under Regulation S-K
- Statement on Opportunity Zones: Federal and State Securities Laws Considerations
- Statement Highlighting Risks for Market Participants to Consider In Transition from LIBOR
- SEC Rules Relating to Disclosure of Heding Policies
- DOJ Corporate Compliance Guidelines
- Framework for “Investment Contract” Analysis of Digital Assets