COVID-19: Investors Want Mandated Disclosures

As reported in a recent Davis Polk blog, Americans for Financial Reform sent a letter signed by over 90 investors, state treasurers, public interest groups and others ...

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SASB Disclosures: Contributing to Societal Change?

Rhonda Brauer shares her observations about our current crises and how SASB’s “financial materiality” disclosure framework could assist in bringing about societal ...

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Corp Fin Supplements COVID-19 Disclosure Guidance

Yesterday, Corp Fin issued CF Disclosure Guidance: Topic 9A, relating to operations, liquidity and capital resources disclosures companies should consider with respect ...

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SCOTUS Reaffirms SEC’s Disgorgement Authority — With Limits

Yesterday, in an 8-1 decision, the US Supreme Court reaffirmed the SEC’s authority to seek disgorgement as a remedy in enforcement actions — but placed limits on the ...

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SEC Chair Jay Clayton: Leaving Washington for New York?

The DOJ caused a stir late Friday with its announcement that the President intends to nominate SEC Chairman Jay Clayton to replace Geoffrey Berman as the United States ...

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Comp Consultants: Maybe the Problem Isn’t Other Services…

Several years ago, the SEC approved exchange rules requiring the comp committee to review the independence of a comp consultant before retaining that consultant. The ...

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IPOs: Virtual Road Shows On the Rise

The grueling, globe-trotting — “if it’s Tuesday this must be Zurich” — roadshow process has long been a big part of the IPO experience for management teams and ...

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“Offboarding” to Achieve Optimal Board Composition

Rather than thinking about how to refresh the board when directors approach mandatory retirement ages or term limits, a recent opinion piece in Forbes suggests ...

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Cyber Breach Disclosure Trends

Last year, Liz wrote about how disclosure related to a cyber breach presents a tricky issue because disclosure requirements vary quite a bit for companies based on ...

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Benchmarking Compliance Reporting

For those taking on responsibility for reviewing a company’s compliance program, along with using the DOJ’s updated guidance, NAVEX Global recently issued its Risk ...

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Improving Board Oversight of Human Capital Management

As COVID-19 has brought increased focus to workplace safety, employee pay and other human capital issues, a recent EY white paper provides insight from directors to ...

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Perks Disclosure SEC Enforcement Action

It’s been a couple of years since we’ve seen an SEC Enforcement Action related to improper disclosure of perks, but the SEC recently settled a case. In this most ...

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Paycheck Protection Flexibility Act: Congress Cuts PPP Borrowers Some Slack

Late Wednesday, the Senate unanimously passed the House version of the Paycheck Protection Flexibility Act, which President Trump is expected to sign into law. Among ...

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PPP Loan Certifications: D&O Issues for the Battles to Come

Most people expect the SBA & DOJ to engage in a robust enforcement effort when it comes to the PPP program. A recent D&O Diary guest blog by Pillsbury’s Peter ...

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Down on Main Street: Fed Provides More Info on Main Street Lending Program

Last week, the Federal Reserve issued additional guidance on its “Main Street Lending Program” for small and mid-sized businesses. A Crowell & Moring memo ...

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Going Concern: Sifting Through COVID-19 Uncertainties

Companies and their auditors must periodically assess whether there is substantial doubt about the company’s ability to continue as a “going concern.” In normal ...

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SPACs: Will More IPOs Mean More Lawsuits?

Last month, I blogged about the recent prominence of SPAC IPOs. While many traditional IPO candidates have put their deals on hold during the COVID-19 crisis, SPACs have ...

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Importance of Updating Risk Management Programs

A recent Nixon Peabody memo reminds management teams to ensure risk management policies and procedures are updated, implemented and that any crises are resolved — ...

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Proxy Advisor Regulation — Is a Speed Bump the Answer?

Proxy advisors and others are voicing displeasure at the notion of a “speed bump” when it comes to proxy advisor reports. Even though the comment period for the ...

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Independent Chair Proposals in a COVID-19 World

Here’s a note from Rhonda Brauer: In the pre-COVID-19 world, I was monitoring independent chair proposals for the 2020 proxy season. I was particularly interested ...

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SEC Investor Advisory Committee: Time to Take Up ESG Disclosure

Late last week, the SEC’s Investor Advisory Committee approved a recommendation that encourages the SEC to begin addressing ESG disclosure. The recommendation might ...

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Non-GAAP: Are Companies Adjusting Away COVID-19?

The Financial Times recently reported that some companies have presented non-GAAP metrics — such as “EBITDAC” — that effectively adjust away the effects of the ...

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PPP Loans: Are Public Company Borrowers Really the Bad Guys?

Recently, I wrote about the SEC’s apparent initiation of an enforcement sweep targeting public companies that borrowed money under the Paycheck Protection Program. ...

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PPP Loans: SEC Enforcement Sweep of Public Company Borrowers?

Public company borrowers under the Paycheck Protection Program have received plenty of criticism. Now, according to a Bryan Cave blog, their hot seat just got even ...

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The Fire Next Time? CFOs Say Contingency Plans Lacking for COVID-19 Second Wave

As the U.S. slowly reopens for business, we’re already hearing warnings that a second wave of the pandemic is likely heading our way in the fall. Since that’s the ...

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Contested Virtual Shareholder Meeting – It’s a First!

We’ve discussed quite a bit about virtual annual meetings, and here’s another development – a recent Wachtell Lipton memo discusses the first contested virtual ...

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PPP Good-Faith Need Certification: SBA Issues Another FAQ

Last week, when John wrote about the deadline for borrowers to return Paycheck Protection Program funds without penalty, he also noted that the SBA said it would provide ...

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COVID-19 & ESG: Social Issues in the Spotlight

It looks like another effect of COVID-19 might be a shift of investors’ ESG focus by placing more emphasis on social issues. As noted in a SGP 2020 proxy season blog, ...

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Companies Targeted for Return of PPP Funds

John’s discussed a few times about issues with the Paycheck Protection Program. For companies that might be questioning whether to return PPP funds, a couple of recent ...

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Proposed Shareholder Resubmission Thresholds: Disproportionate Effect?

That’s what a recent report issued by the Council of Institutional Investors says. A lot has been said about the SEC’s proposed rules relating to the shareholder ...

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Positive Effects from Publicizing Crisis Response

Even though the market went up last Friday, with unemployment and food lines growing by the day and COVID-19 persisting, it’s clear we’re in a crisis. If anyone’s ...

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“No Respect at All”: Are Dual-Class Companies Undervalued?

Dual-class companies are the Rodney Dangerfield of corporate governance – “No respect… I’m tellin’ ya, I don’t get no respect at all!” It’s hard to find ...

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Nasdaq Temporarily Eases Approval Requirements for COVID-19 Share Issuances

Earlier this week, the SEC approved a temporary Nasdaq rule that would provide listed companies with a temporary exception from certain shareholder approval requirements ...

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Virtual Annual Meetings: CII Weighs In with Investor Concerns

A number of companies have transitioned to virtual annual meetings as a result of the COVID-19 crisis, and according to the CII’s recent letter to the SEC’s Investor ...

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Staff Issues FAQs on COVID-19 Relief

Yesterday, the Staff issued four FAQs addressing issues arising under the SEC’s exemptive order extending filing deadlines for companies impacted by the COVID-19 ...

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PPP Loans: Tax Deduction? If They’re Forgiven, Forget It

One of the things that makes the Payroll Protection Program so attractive is that if a borrower spends its loan proceeds properly (on items such as payroll, rent and ...

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PCAOB Wants Comments on CAM Requirements

The PCAOB wants comments on experiences so far with the new CAM disclosure requirement. Comments are encouraged from all interested stakeholders and should be submitted ...

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Mining Company Property Disclosure Rules: Corp Fin Issues Three New C&DIs

Yesterday, Corp Fin issued three new C&DIs arising out of the new mining company property disclosure rules — Broc wrote about the rules when they were adopted in ...

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Beyond Force Majeure: Tips for Entering New Tech Agreements During COVID-19

Many companies have been dealing with what to do about existing contracts during COVID-19, while many are also continuing to enter into new agreements. A new contract ...

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BlackRock’s Catching Flack from All Sides

When you’re the largest asset manager, any statements garner a lot of attention. Take for example, Larry Fink’s January letter to CEOs. A lot of media outlets ...

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SEC Goes Remote & Virtual Like the Rest of Us

If you’re wondering how the SEC is getting all of its work done these days, they’re working remote like a lot of people and seem to be adapting. A while ago, the SEC ...

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PPP Loans: Beware False Claims Act Whistleblowers

Companies that are thinking about repaying their loans ought to make their decisions prior to May 7, because as a Bryan Cave blog points out, FAQ #31 provides a safe ...

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PPP Loans: You Got Your Money – Should You Give It Back?

Well, you can’t say we didn’t warn you. A number of Paycheck Protection Program loan recipients are receiving heavy duty blowback from the media and politicians ...

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Listing Standards: NYSE Joins Nasdaq in Providing Relief From Price-Based Standards

Earlier this week, I wrote about Nasdaq’s rule change providing extended compliance periods for companies that fail to meet its minimum bid price and global market cap ...

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Virtual Shareholder Meetings: Survey of Q&A Trends

With so many companies moving to virtual meetings, one of the issues that has become front and center is how shareholder Q&A sessions should be handled. A Bass Berry ...

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COVID-19 Crisis: Companies Adopt Emergency Bylaws to Ensure Board Operations

With all of the disruptions resulting from the COVID-19 pandemic, many companies are looking at board and management continuity issues, and some companies have opted to ...

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SEC & PCAOB Officials Issue Joint Statement on “Emerging Market” Risks

Yesterday, SEC Chair Jay Clayton and a group of senior SEC & PCAOB officials issued a joint statement warning about the risks posed by “emerging market” ...

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COVID-19 Crisis: What About ICFR?

The COVID-19 crisis has created a number of challenges for public companies, and one of the potentially most significant is maintaining appropriate internal control over ...

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Listing Standards: Nasdaq Provides Temporary Relief from Price-Based Standards

On Friday, the SEC approved an immediately effective Nasdaq rule change that would allow listed companies more time to return to compliance with price-based continued ...

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Rulemaking Petition Seeks to Allow Electronic Signatures Under Reg S-T

In what could be a big step forward for the SEC, a rulemaking petition from Wilson Sonsini, Fenwick & West and Cooley asks the SEC to amend rules under Reg S-T that ...

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COVID-19 Oversight: Does the Board need a Special Committee?

No doubt most boards are dealing with unprecedented challenges related to the COVID-19 pandemic. Some boards might currently have a risk committee positioned to provide ...

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Initial Investor Responses to the COVID-19 Pandemic

Rhonda Brauer has provided a couple of guest blogs; here’s her most recent post. We’re grateful for her work this time that takes a look at where investors are ...

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COVID-19 & Earnings Calls: Logistical Considerations

Social distancing and stay-at-home orders resulting from COVID-19 will make this quarter’s earnings calls different for many companies. For most it will be difficult, ...

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Corp Fin Provides Temporary Relief for Form 144 Paper Filings

Yes, Forms 144 are still required, but you can email them for a while. Corp Fin recently issued an announcement providing temporary relief for Form 144 paper filings in ...

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COVID-19 Crisis Disclosure: What About Earnings Guidance?

One of the many issues that companies are grappling with as a result of the COVID-19 crisis is what to do about earnings guidance. A Bass Berry blog addresses that ...

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SEC Chair & Corp Fin Director Issue Joint Statement on COVID-19 Disclosure

Yesterday, SEC Chair Jay Clayton and Corp Fin Director Bill Hinman issued a joint statement urging companies “to provide as much information as is practicable ...

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Paycheck Protection Program: Free Money? Don’t Bank on It

If you’re in a law firm, chances are pretty good that you’ve spent a fair amount of time during the past week getting clients up to speed on the requirements for ...

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COVID-19: New C&DI Address Application of Exemptive Order to Part III of 10-K

Yesterday, Corp Fin issued a new C&DI addressing the application of the SEC’s conditional exemptive order extending by up to 45 days after the due date for SEC ...

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Financial Reporting: SEC Chief Accountant Addresses COVID-19 Issues

SEC Chief Accountant Sagar Teotia issued a recent statement stressing the importance of high-quality financial reporting during the COVID-19 crisis. Many companies are ...

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SEC Chair Encourages Continued Disclosures Amid Pandemic

SEC Chairman Jay Clayton recently issued a public statement emphasizing that the SEC is “focused on ensuring that issuers and other registrants continue to provide ...

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Securities Offerings Amid Closed Trading Window: Disclosure Considerations

With ongoing economic uncertainty, many companies are thinking about and taking steps to address liquidity and capital resources. John wrote last week about Corp Fin’s ...

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Corp Fin Issues Two New Delayed Filing CDIs

Yesterday, Corp Fin issued two new CDIs addressing the interplay of Form 12b-25 and Corp Fin’s modified COVID-19 exemptive order that was issued last week to provide ...

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Making Use of ESG Ratings

As is often said – beauty is in the eye of the beholder – some might say the same about ESG ratings, then again maybe not. It wasn’t too long ago that Liz wrote ...

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CARES Act – Nearly Everything but the Kitchen Sink

It came together quickly; Some might say not fast enough, but last Friday, the Coronavirus Aid, Relief and Economic Security (CARES) Act became law. It is believed to be ...

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Buybacks: Are Airlines Supposed to be Treated Differently?

Nobody is likely to shed any crocodile tears over companies receiving yet another federal bailout being prohibited from this type of financial engineering, but as I read ...

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COVID-19 Disclosures: Guidance From Corp Fin

Yesterday, Corp Fin issued CF Disclosure Guidance Topic No. 9, which addresses disclosure and other securities law obligations relating to the COVID-19 crisis. The ...

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Executive Health: COVID-19 Illness Disclosures

I recently wrote about potential disclosure issues surrounding a corporate executive’s COVID-19 diagnosis. Regrettably, this is no longer a hypothetical issue. For ...

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COVID-19 Cash Crunch: Rethinking Dividends

The suddenness of the COVID-19 crisis has left many companies rethinking their liquidity needs. Those that declared a cash dividend before the crisis hit but haven’t ...

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COVID-19: Should You Update Earnings Guidance?

A lot of internal discussions are underway about whether to update earnings guidance about the effect COVID-19 might have on a company’s business or financial outlook. ...

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Annual Meetings: Attendance Considerations

This year, another aspect to annual shareholder meetings to think about is whether your directors, officers and other employees should attend the annual meeting — ...

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Board-Level Oversight of Sustainability Disclosures

Board-level oversight of sustainability initiatives and disclosure is up for grabs at many companies. A PwC memo discusses reasons audit committees might be best ...

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Virtual Shareholder Meetings: CII & Proxy Advisor Positions

Many have been wrangling with all the considerations of holding virtual-only or hybrid shareholder meetings during this time of “social distancing.” A Perkins Coie ...

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SEC Amends “Accelerated Filer” & “Large Accelerated Filer” Definitions

Yesterday, the SEC adopted amendments to the definitions of “Accelerated Filer” and “Large Accelerated Filer.” The most notable result of this action is that ...

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Disclosure: What If Your CEO Is Diagnosed With The Coronavirus?

The COVID-19 outbreak creates plenty of disclosure issues about its potential impact on a company’s business and financial condition, but there’s another one lurking ...

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Proxy Contests: Will COVID-19 Put Them on Ice?

A recent Sidley memo says that one of the consequences of the coronavirus outbreak may be a decline in proxy contests during the current season. As this excerpt points ...

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Conflict Minerals: Time for a Fresh Look at Disclosure & Compliance Programs

Remember when everybody thought the Conflict Minerals disclosure requirement was on the way out? Yeah, good times. . . Anyway, a Ropes & Gray memo says that changes ...

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SEC Asks DC Employees to Work From Home

In what may be a sign of things to come for many of us, The Washington Post reports that last night, the SEC asked employees in its DC headquarters to work from home in ...

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Earnings Calls: What are Companies Saying About the Coronavirus?

I guess we can add earnings calls to the ever-growing list of things that the coronavirus outbreak has thrown a giant monkey wrench into. A recent article from “CFO ...

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Future of the PCAOB

As reported in various news outlets, President Trump’s 2021 budget includes a proposal that would consolidate the PCAOB into the SEC. Consider me a skeptic as to the ...

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SEC Proposes Amendments to Simplify & Harmonize Private Offerings

Yesterday, the SEC issued a 341-page proposing release intended to “simplify, harmonize and improve certain aspects of the exempt offering framework.” The SEC’s ...

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Annual Meetings: Planning for COVID-19 Developments

A memo from Davis Polk walks through some of the things you might want to think about if you’re worried about the COVID-19 coronavirus and how it might affect where or ...

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SEC Amends Rules for Financial Disclosures of Registered Debt Offerings

Yesterday, the SEC voted to adopt amendments that significantly change the financial disclosure requirements for guaranteed debt offerings under Regulation S-X Rule 3-10 ...

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Internal Audit’s View of Corporate Governance

According to a recent report, Chief Audit Executives (CAEs) don’t think that companies are doing a very good job evaluating corporate governance. The report was issued ...

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D-Lister Dinged for Drumming Digital Deal!

Yesterday, the SEC announced that it had instituted a settled enforcement action against actor, musician, environmentalist, martial arts master & Russian special ...

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Warren Buffett: “Hey GAAP, Get Off My Lawn!”

Warren Buffett’s annual letter to Berkshire Hathaway shareholders came out last Saturday. It attracted the usual avalanche of media attention, but I recommend that you ...

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DFS: New York’s New Regulatory King Kong?

Armed with the formidable Martin Act, the NY Attorney General’s office has long been one the most powerful state regulators in the country, but a WilmerHale memo says ...

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Coronavirus: Implications for Contracts

It really is difficult to get your arms around the sweeping legal & business implications of the coronavirus epidemic. A Cleary Gottlieb memo picks up on one of the ...

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MD&A Guidance: What About ESG Metrics?

Well, it didn’t take long for the Division of Enforcement to focus everybody’s attention on the SEC’s recent guidance on the use of key performance indicators ...

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What to Do About Astroturfing the Comment Letter Process

It’s hard to know for sure whether astroturfing is part of the SEC comment letter process. Last fall, John wrote about the flurry of comment letters received at the ...

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SEC Public Statement on Coronavirus

Yesterday, the SEC issued a public statement on the effects of the coronavirus on financial reporting.  In late January, John wrote about Chairman’s Clayton’s ...

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SEC Brings KPI Enforcement Proceeding

It looks like the SEC didn’t waste much time in finding its big company poster child for key performance indicators (KPI). Yesterday, the SEC issued a press release ...

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SEC Comment Letters: Tips to Ease Your Response Process

Responding to SEC comment letters can be tricky, so it’s always nice to read tips from Corp Fin on how to make the response process more efficient. A recent Deloitte ...

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Cyber Response Plan Testing

When it comes to “cyber response plans,” the planning stage is a lot more useful if it’s actually been tested. A blog from The D&O Diary discussing the ...

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Risk Factors: Here Come the 10-K Coronavirus Disclosures. . .

Last month, I wrote about the first 10-K filing to include a coronavirus risk factor. As concerns about the virus’s economic impact have continued to grow, a total of ...

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Insider Trading: Should Your Policy Cover More Than Legal Risks?

A recent paper from Stanford’s Rock Center notes that while most insider trading policies are designed to prevent violations of law, companies need to ask whether ...

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Audit & Non-Audit Fees: The Song Remains the Same?

Audit Analytics recently took a look at the audit fees paid by S&P 500 companies – and to say that they vary widely is a huge understatement. The average audit ...

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Proxy Access: Adopted Widely, Used Only Once

Sidley recently issued a 5-year review of proxy access developments.  In addition to tracking the adoption of proxy access bylaws, the review also addresses a variety ...

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IPOs: A Fix for Section 11 Liability?

With D&O insurance premiums on the rise & more Section 11 suits being filed in plaintiff-friendly state courts, IPO companies and their directors & officers ...

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Skipped Class the Day Insider Trading was Covered?

Insider trading stories really do make me shake my head in disbelief and I did that when reading a recent story. In this case, the SEC caught up with a recent college ...

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Disclosure Reform: Are ESG Risks “Material”?

Over the past couple of years, the SEC has taken a few small steps toward “disclosure reform” – with its 2018 “Disclosure Update & Simplification” and 2019 ...

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“Proxy Advisor” & “Shareholder Proposal” Regs: Comments Are In!

With the comment period for the SEC’s proposed rules on regulating proxy advisors and the shareholder proposal process closing today – February 3rd – let’s take ...

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S-K Financial Disclosure: SEC Proposes Big Changes!

Yesterday, the SEC voted to propose significant changes to the financial disclosure provisions of Regulation S-K.  The changes are intended to eliminate duplicative ...

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Cryptocurrencies: Rising NBA Star Launches ICO

If there’s one thing we know about cryptocurrencies, it’s that celebs love them. We’ve written about rapper Ghostface Killah’s unsuccessful efforts to launch his ...

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Insider Trading: Bharara Task Force Weighs In

A few years ago, I blogged over on The Mentor Blog about the establishment of a task force led by former SDNY chief Preet Bharara to make recommendations about reforming ...

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Board Diversity: Goldman Says No More “Boys Club” IPOs

Goldman Sachs’ CEO David Solomon made news at Davos last week by announcing that his firm would no longer help companies go public unless they had “at least one ...

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That Pesky 3rd Year: Corp Fin Issues 3 New MD&A CDIs

On Friday, Corp Fin issued three new Regulation S-K CDIs addressing interpretive issues arising out of last year’s Fast Act rule changes that, under some ...

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California’s “Board Gender Diversity” Law: FAQs

It’s official – California-headquartered companies are now required to have at least one female director. A WSJ article says that 244 California-based companies have ...

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Non-Financial Disclosure: What “Audit Assurance” Looks Like

One of the suggestions that keeps turning up for ESG disclosures is that companies should explain how they verify the accuracy of the info or provide some external ...

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Congress Moves to Close the “8-K Trading Gap”

Last week, the House passed the “8-K Trading Gap Act” by a vote of 384 to 7. A recent Troutman Sanders memo explains how this bill could impact insider trading ...

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The Myth of the Friday Earnings Release

At one point or another, most of us have clients who want to avoid scrutiny of sub-par results and consider the “Friday earnings release” approach. Legend has it ...

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Airbnb Establishes “Stakeholder” Board Committee

On Friday, Airbnb announced a detailed “stakeholder” approach to governance and company-wide compensation. It identifies five key groups of stakeholders (including ...

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BlackRock on Climate Change: “Against” Votes Are Coming?

It’s that time of year again! Larry Fink – BlackRock’s CEO – is out with his annual letter to CEOs. This year, he says BlackRock is taking a more aggressive ...

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More on “Shareholder Proposals on Arbitration”

Last year, John wrote about a shareholder proposal submitted to Johnson & Johnson dealing with a mandatory arbitration bylaw.  The SEC granted no-action relief to ...

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Divestment: Another Investor Approach to Social Issues?

Last summer, Liz wondered whether shareholders would show renewed interest in “firearms responsibility” during the 2020 proxy season. In December, the Connecticut ...

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D&O Insurance: ESG Reputation Matters

An Allianz report highlights 5 “mega trends” likely to impact boards and officers – and the D&O insurance market – in 2020 (also see the annual Protiviti ...

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Good Governance: Does Anyone Really Know What It Is?

Red state or blue state, Fox News or MSNBC, everybody can agree that when it comes to public companies, we’re all for good governance.  But what exactly do we mean by ...

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Insider Trading: 2nd Cir. Makes Prosecutors’ Day

In response to uncertainties surrounding insider trading law under Section 10(b) of the Exchange Act, in recent years federal prosecutors have increasingly opted to rely ...

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SOX 404: Point & Counterpoint on Auditor Attestations

Over on Radical Compliance, Matt Kelly recently blogged about the status of the SEC’s proposed changes to the accelerated filer definition – which would have the ...

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IPOs: WeWork a Game Changer for 2020’s Unicorns?

I’ll admit to a certain bias here, but to me 2019’s two greatest fiascos were the performance of my Cleveland Browns & the aborted WeWork IPO.  While early ...

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Ransomware: The Cyber Attack That Companies Refuse to Call by Name

With all the emphasis on increased candor in disclosures about cybersecurity in recent years, it’s a little surprising that, according to a recent ProPublica report, ...

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E&S: BlackRock’s Shareholders Tiring of “Quiet Engagements”?

What will 2020 hold for BlackRock? Last year at this time, environmental activists were pegged as the pranksters behind a phony annual letter from BlackRock’s Larry ...

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Clawbacks: Turning Restatements Into a Rare Species?

John wrote a few months ago that 70% of restatements are now “Little r” revisions, according to data from Audit Analytics. A WSJ article reports on a couple of ...

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Corporate Governance Ratings: Internal Audit Enters The Game

Recently, the Institute of Internal Auditors announced a new “corporate governance index” that annually rates listed companies – based on surveys of Chief Audit ...

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Audit Committee Role & Reminders: Statement from SEC & Corp Fin

Also yesterday, a statement from SEC Chair Jay Clayton, Chief Accountant Sagar Teotia and Corp Fin Director Bill Hinman was issued to remind audit committees of their ...

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SEC Proposes “Modernization” of Auditor Independence Rules

Yesterday, the SEC announced this New Year’s gift: proposed amendments to Rule 2-01 of Reg S-X that would “modernize” the auditor independence rules and codify ...

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ESG Ratings Draw Nearly Universal Contempt

If there’s one thing that most people in our community can agree on, it’s that the proliferation of “ESG” ratings and funds is causing frustration and confusion. ...

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Corp Fin’s New “Disclosure Guidance”: Confidential Treatment Requests

RIP, Staff Legal Bulletins No. 1 and 1A. Yesterday’s new “CF Disclosure Guidance Topic No. 7: Confidential Treatment Applications Under Rules 406 & 24b-2” ...

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SEC Proposes Expanded “Accredited Investors” Def’n

As anticipated, yesterday the SEC voted to propose amendments to the definition of “accredited investors.”  The proposed amendment, issued upon a 3-2 vote, will ...

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Improving Board Oversight of Risk

The board’s role in risk oversight continues to be top of mind – not only for directors, but also for shareholders, legislatures & proxy advisors.  If you’re ...

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State of the SEC: A Few Nuggets from the Chair’s Testimony

Recently, SEC Chair Jay Clayton delivered a 33-page testimony to the Senate Banking Committee in a hearing about SEC oversight. Here are a few nuggets: The SEC has ...

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How to Attract & Retain New Lawyers

Law firms lose about $1 billion annually because of attrition, according to Thomson West. Being a young lawyer is marginally better than being a young investment banker ...

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Direct Listings: NYSE Files Revised Proposal!

That was fast. Earlier this week, I wrote that the SEC had rejected the NYSE’s proposed rule change to permit companies to sell newly issued primary shares via a ...

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“Climate Accounting”: Exxon Prevails in Martin Act Suit

A couple months back, I wrote that Exxon Mobil was defending itself in New York state court against allegations that it had misled investors by saying publicly that it ...

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SEC Calls Foul on “Earnings Management”

You likely saw the WSJ article last month, detailing an SEC investigation into one company’s end-of-quarter “earnings management” practices – e.g. leaning on ...

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FCPA: DOJ Revises Policy to Encourage Self-Disclosures

A couple weeks ago, the DOJ revised its FCPA “Corporate Enforcement Policy” to encourage more self-disclosures to the Department. Here’s an excerpt from an ...

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Insider Trading Reform: Could 2020 Be the Year?

Last week, the House passed the “Insider Trading Prohibition Act” by a vote of 410-13. John wrote about the bill back in June when it passed out of the House ...

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Direct Listings: NYSE’s “IPO” Proposal – Controversial?

Last week, the NYSE proposed a rule change to allow listed companies to sell newly issued primary shares on its own behalf directly into the opening trade. As noted in a ...

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The SEC Chair Touts ‘Fishy’ Comment Letters

Not too long after I wrote about how nothing much happens at open Commission meetings, an interesting thing happened – the SEC Chair cited “fishy” comment letters ...

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Reg Flex Agenda: Clawback Re-Proposal Coming Next Year?

Recently, the SEC published its latest Reg Flex Agenda – both the “Active” agenda and the “Long-Term Actions” agenda (combined, they are also known as the ...

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“ESG” Funds: What’s in a Name?

Regular readers of this blog know that we write more than we want to about the rise of “responsible investing” – e.g. just yesterday. It’s not that we’re ...

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“Responsible Investors” Say ESG Isn’t a Fad

You have to wonder what’s driving sustainability reporting by smaller companies. They’re less likely than large companies to be doing it in response to proposals ...

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Dual Class: Battleground Moves to Delaware

There’s been some back & forth over “who writes the rules” when it comes to dual-class shares: candidates for that job have included indexes, exchanges and ...

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SEC’s Enforcement: Do Stats Matter?

Every year, the SEC’s Enforcement Division releases stats about the number of actions it has brought, etc. It’s good fodder for the media. But why does Enforcement ...

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Who “Leaked” WeWork’s Comment Letter

A “whodunit”! We haven’t talked about one of those in a while. You will recall that WeWork – the gift that keeps on giving to this blog – withdrew its IPO ...

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Dual-Class: Maybe the Market Worked in WeWork?

Rick Fleming, the SEC’s Investor Advocate, recently lambasted companies with dual-class capital structures, referring them to as a “festering wound” that, if left ...

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S-K Modernization Proposal: Big Yoga Weighs In!

The comment period on the SEC’s proposal to amend Items 101, 103 & 105 of Regulation S-K recently expired. In the proposing release, the SEC laid out some ...

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“The Die is Cast”: SEC Proposes to Regulate Proxy Advisors

Yesterday, the SEC issued two controversial rule proposals that, if adopted, would significantly modify the proxy disclosure & solicitation process. There’s a lot ...

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Glass Lewis Issues ’20 Voting Guidelines

Glass Lewis has posted its 2020 Voting Guidelines. A summary of the changes appears on page 1 of the guidelines & on Glass Lewis’s blog, and we’ll be posting ...

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Kokesh Redux: SCOTUS to Hear Challenge to SEC Disgorgement Authority

The SCOTUS’s 2017 Kokesh decision limited the SEC’s ability to use one of its favorite enforcement remedies when the Court unanimously held that SEC disgorgement ...

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Boardroom Diversity: Progress on Racial Diversity Impeded by Slow Turnover

The news isn’t all bad when it comes to the inclusion of African-American & other minority board members. Spencer-Stuart’s 2019 Board Index says that progress on ...

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Director Survey: “Collegiality” & “ESG” Can Go Too Far

PWC is out with its annual survey of 700 directors. The main theme is that “collegiality” remains highly valued and important – but it can go too far if it keeps ...

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ISS Sues SEC Over Proxy Advisor Guidance!

The gloves are off. Yesterday, ISS announced that it had filed this lawsuit against the SEC – which challenges the Commission-level guidance that was issued back in ...

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Foreign Nations Might Be Delaware’s New Competition

While you may think of Nevada – or even federal law – as Delaware’s primary competitor in the “corporate law” space, a forthcoming law review article says that ...

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Comment Trends: Corp Fin’s “Top 10”

A 91-page report from EY – and the related 7-page summary – says that Corp Fin issued 34% fewer comment letters last year. While that was partially due to the ...

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“Climate-Change Accounting”: Not Adding Up?

Last week, as a WSJ article reports, Exxon began defending itself in New York state court about whether it improperly accounted for the cost of climate change ...

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“Harmonization” of Private Offerings: NASAA Comments on SEC’s Concept Release

Right now, a “requirement” for relying on the Reg D private placement exemption is to file a Form D within 15 days of the date that securities are first sold under ...

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“Reg D” ICOs: What’s the Harm in Trying?

A recent MarketWatch article notes there’s been a steep drop-off in the number of Reg D token offerings this year. If the Enforcement Division taking issue with a SAFT ...

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ICOs: “SAFTs” No Longer Safe?

When I first saw the announcement from the SEC’s Enforcement Division about an emergency action to halt an unregistered ICO, I brushed it off as a takedown of yet ...

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Audit Committees Must Enforce Auditor Independence Rules? What Gives?

Here’s a note from Lynn Turner: Have you looked at this guidance from the PCAOB Staff? It essentially “guts” the auditor independence rules. It states that if an ...

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Canada Heading for Mandatory “Say-on-Pay-Eh”?

Okay, that title is a very lame Canadian joke, but if you were made to look like a fool on a hockey rink by your Canadian pals as frequently as I am, you’d be looking ...

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SOX 404: 15 Years of Negative Attestations & Assessments

Section 404 of the Sarbanes-Oxley Act requires companies to review their internal control over financial reporting and report whether or not it is effective. ...

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Naming Audit Partners: No Audit Quality Impact?

Several years ago, the PCAOB adopted a rule requiring the public identification of the audit firm’s engagement partner on each public company audit. This rule went ...

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Shareholder Proposals: Corp Fin Issues 12th Staff Legal Bulletin

Yesterday, Corp Fin issued Staff Legal Bulletin No. 14K – which makes an even dozen SLBs devoted to shareholder proposals. It follows up on some of the topics ...

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Poison Pills: A Career Limiting Move for Directors?

If you’re a public company director looking to put a real crimp in your future career prospects, it looks like adopting a poison pill is a pretty good way to do it. In ...

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Board Diversity: NYC Comptroller Launches “Rooney Rule” Initiative

Last week, NYC Comptroller Scott Stringer announced an initiative calling for companies to adopt a corporate version of the NFL’s “Rooney Rule” in order to promote ...

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Chief Justice Strine’s “New Deal”

When Delaware Chief Justice Leo Strine announced that he’d be leaving the bench this fall, Broc speculated that grander things were yet to come. Now, the influential ...

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Should the SEC Get Out of the “Stakeholder Disclosure” Business?

I think most securities practitioners can agree that it’s exhausting to shoehorn certain Congressional mandates for broader ’33 & ’34 Act reporting into the ...

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SEC Enforcement: Actually, Just Check All Your Disclosures

Here’s another recent settlement between the SEC’s Enforcement Division and a company that disclosed allegedly misleading customer metrics (the CEO was also ...

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Ransomware: Preparing for a Growing Threat

According to a recent NYT article, more than 40 municipalities have been victims of ransomware attacks this year, including the 23 towns in Texas that were hit recently. ...

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Shareholder Proposals: Should Corp Fin Referee the No-Action Process?

Here’s a piece that I drafted before Corp Fin made its recent announcement about how it will process Rule 14a-8 requests for shareholder proposals going forward – ...

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More on “The History of the SEC Staff’s Disclaimer When Speaking Publicly”

Recently, I wrote about when a SEC Staffer kicks off their public remarks with a disclaimer that their remarks are their own and not those of the Commission. I mused ...

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Wow! Corp Fin “Realigns” (But It’s More Than That)!

Wow! All that is new is “old” again! When I first joined Corp Fin in 1988, there were a half dozen or so “pods” – each with two branches – that were devoted ...

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Everybody Into the Pool! SEC Adopts “Test the Waters” for All

Yesterday, the SEC announced that it had adopted final rules permitting all companies to gauge market interest in a possible initial public offering or other registered ...

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Being Litigated! Tesla’s Colossal CEO Comp In The Crosshairs

Last year, the Tesla board – and shareholders – signed-off on a pay deal that would provide Musk with a potentially gargantuan payout if its stock hit some very ...

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Quarterly Reporting & ESG: The CFA Institute Weighs In

This SEC Institute blog flags a recent CFA Institute member survey addressing quarterly reporting & ESG disclosure. This excerpt says that quarterly reports are more ...

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IPOs: VCs Eyeing “Direct Listing” Alternative

We’ve talked about the potential of “direct listings” as an alternative to IPOs – and a couple of high-profile unicorns have already opted to take this path in ...

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Better The Devil You Know? ISS ESG Business Keeps Growing

Most of us primarily think of ISS as a proxy advisor, but it’s also been not-so-quietly building its ESG business since acquiring oekom research last year. According ...

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“Greenwishing”: Sustainability’s Greatest Threat?

Recently, Lawrence Heim – himself the author of the book “Killing Sustainability” – sent me this 17-page essay on “greenwishing.” It’s written by Duncan ...

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XBRL: What’s It Good For?

XBRL has been around 10 years! A lot of people would say it’s still good for absolutely nothing – among other reasons, because it requires extra software to consume, ...

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10b-5 Liability: Exec Gets Sanctioned for “Failure to Correct”

Earlier this year, John blogged that the US Supreme Court gave the SEC a big win when it held – in Lorenzo v. SEC – that individual anti-fraud liability can ...

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ISS Releases Policy Benchmark Survey Results

Yesterday, ISS released the results of its benchmarking survey for the annual update of its voting policies. Here’s a summary: 1. Board Gender Diversity – ...

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Proxy Access: Where Things Stand

For a minute, it seemed like proxy access was settled – but we see new “fix it” proposals each year, in addition to continued targeting of companies that haven’t ...

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Shareholder Proposals: Corp Fin’s Big Announcement – Oral Responses & Declining to Provide a View!

A few months ago, we wrote about how Corp Fin was considering changing how their “referee” role. Well, that change has happened. On Friday, Corp ...

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Governance: Closing the Board Information Gap

With everybody debating big picture issues like corporate purpose & stakeholder v. shareholder interests, an “Ethical Boardroom” article by Harvard’s Stephen ...

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Financial Intermediaries: Strine Says Funds Must Do Better By Their Investors

Last month, Delaware Chief Justice Leo Strine co-authored a NYT opinion piece about the failure of retirement & index funds to approach voting & corporate ...

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Counterpoint: Like Heck It Does!

Sorkin’s piece initially attracted a lot of attention, but then it sort of got overwhelmed by the sound & fury surrounding the BRT’s decision to bid farewell to ...

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“Stakeholder Governance”: What Happens to the BJR?

A recent blog from Alison Frankel poses an interesting question: if corporations undertake obligations to “stakeholders” & not merely shareholders, what does ...

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Making Sense of ESG Reporting Frameworks

Until we get a standardized approach to ESG disclosure, companies (and investors) will continue to wade through the current “alphabet soup” of reporting frameworks ...

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S-K Modernization: Two SEC Commissioners Concerned About “Principles-Based” Proposal

Yesterday, SEC Commissioners Rob Jackson & Allison Herren Lee issued a joint statement about the “modernization” amendments to Reg S-K that were proposed several ...

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Low-Cost Index Funds: Management’s “Absentee” Best Friend?

John’s discussed a couple of times about efforts by large institutional investors to avert a gathering storm of criticism. Maybe they can add this research to their ...

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FASB Testing “Staggered Adoption” Policy for Smaller Reporting Companies

FASB is taking pity on smaller reporting companies – who are finding it especially challenging to implement the slew of recent changes to accounting standards. ...

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SEC Issues “Proxy Advisor” Guidance

The SEC issued guidance on proxy advisors yesterday. Proxy advisors. A topic that many can’t get enough of.  Here’s what the SEC did: The SEC issued a ...

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Inline XBRL: Corp Fin Issues 9 CDIs

In response to the mechanical questions about how to handle the Inline XBRL for ’34 Act filings – including the exhibit index – Corp Fin issued a set of 9 CDIs ...

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Battle Lines Being Drawn! BRT Brushes “Shareholder Primacy” Aside

Yesterday, the Business Roundtable got a ton of press by issuing a statement with its view that the “purpose” of a corporation should be changed so that ...

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Are Companies Punishing Their Auditors for Flagging Their Material Weaknesses?

As reflected in an article by MarketWatch’s Francine McKenna, this new study about internal controls reporting by independent auditors is getting a lot of press. ...

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WeWork’s Proposed IPO: The Latest Unicorn Doesn’t Disappoint…

Around here, we’ve come to expect big things from unicorn IPO filings – and I’m delighted to say that ’The We Company’’s Form S-1 does not disappoint. I’ll ...

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Dual Class: CII Names & Shames “Dual-Class Enabler” Directors

Last week, the CII published a list of 159 directors who served on boards of 2018 & 2019 IPO companies that went public with dual-class share structures & no ...

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BlackRock: “Remain Calm! All is Well!”

Remember my recent piece about BlackRock’s defense of the size of its investment positions in public companies? Well, it published another piece on the Harvard ...

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SEC Calendars ‘Open Meeting’: Proxy Advisors on the Agenda!

Yesterday, the SEC announced an open Commission meeting next Wednesday – August 21st – during which it will consider two agenda items. The first relates to ...

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Fast Act S-K Simplification: Don’t Forget the New “Description of Securities” Exhibit!

In preparing an article for the most recent issue of “The Corporate Counsel” print newsletter, I looked at a bunch of 10-K filings made by large accelerated filers ...

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