This summer, the Securities and Exchange Commission (SEC) approved final Dodd-Frank clawback policy listing requirements for both the NYSE (NYSE Listed Company Manual Section 303A.14) and Nasdaq (Nasdaq Listing Rule 5608). The listing standards provide that these compensation recovery policies apply to compensation received on or after Oct. 2, 2023, but listed companies have until Dec. 1, 2023, to adopt compliant policies. We summarize the key requirements of the policies below and recommend actions for publicly traded companies to implement the policies.
Legislation aimed at increasing access to investment opportunities for all individuals regardless of their income or wealth level passed the House recently on May 31, 2023. H.R. 2797, or, the Equal Opportunity for All Investors Act of 2023, shares the name of a similar bill that never made it past the House after its introduction in 2021. H.R. 2797 was referred to the Senate Committee on Banking, Housing, and Urban Affairs on June 1, 2023. The Securities and Exchange Commission (SEC) limits participation in certain unregistered or private securities transactions to individuals and entities that qualify as “accredited investors.” An accredited investor has the level of financial or business sophistication required to fully appreciate the risks associated with investments of that nature.
On April 14, 2021, the U.S. Senate confirmed Gary Gensler, President Joe Biden’s nominee, to chair the U.S. Securities and Exchange Commission (SEC) until June 5, 2021. The Financial Industry Regulatory Authority (FINRA) issued a statement, in which the organization characterized Mr. Gensler as an advocate “for the interests of investors.” Investors and the SEC have expressed an interest in the reporting of environmental and social issues. Many spectators believe that under Gensler’s leadership, the SEC may implement a required disclosure of ESG issues.
Most companies established or registered to do business in the U.S. do not have to disclose or report their ownership information—but that is about to change. The recently-enacted Corporate Transparency Act, which went into effect Jan. 1, 2021, requires certain companies to report their beneficial owner(s) to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).
Borrowers of Paycheck Protection Program (PPP) loans – together with their affiliates – who have loans in excess of $2 million and seek loan forgiveness will potentially need to complete necessity questionnaires according to the Small Business Administration. There are separate forms for for-profit and non-profit businesses and will likely affect 52,000 borrowers.
My colleagues Jack Beeler, Cat Rice and Jack Meadows explain the purpose and questions asked in these questionnaires in this law alert.
On Oct. 7, 2020, the Securities and Exchange Commission (SEC) proposed a limited and conditional exemption from broker registration for natural persons, referred to as “finders,” who seek to help non-reporting, private companies raise capital from accredited investors in exempt offerings, subject to certain conditions. Generally, persons who effect transactions in securities for the account of others cannot do so through interstate commerce unless the person is registered with the SEC. There has long been ambiguity about when or if finders, who seek to bridge the gap between businesses and investors by identifying potential investment opportunities, must register as broker-dealers with the SEC. The proposed exemption seeks to clarify the role and obligations of finders so that small businesses can more easily connect with the investments they need to succeed. In the current market, small businesses often struggle to identify potential investors, and few broker-dealers are willing to raise capital in the smaller transactions.
On Aug. 26, 2020, the Securities and Exchange Commission (SEC) adopted amendments to Rule 501(a), Rule 215 and Rule 144A of the Securities Act of 1933 (Securities Act). These amendments are part of the SEC’s efforts to more effectively identify qualified investors and allow for expanded investment opportunities, while still maintaining appropriate levels of investor protections.
Forum-selection provisions are common tools for corporations seeking to counteract potentially abusive shareholder litigation. Last month, the Supreme Court of Delaware held that Federal forum provisions, which require actions arising under the Federal Securities Act of 1933, as amended, to be filed in a Federal court, could survive a facial challenge. Continue Reading
On March 27, 2020, President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. Among other things, the CARES Act made some important changes to the U.S. Bankruptcy Code. My colleague Jack Meadows explains on our Banking & Finance blog.
On March 13, 2020, in response to the recent outbreak of the coronavirus disease (COVID-19), the Securities and Exchange Commission released guidance providing regulatory flexibility to reporting companies seeking to change the date, time, or location of annual shareholder meetings and use new technologies, such as “virtual” shareholder meetings, that avoid the need for in-person meetings. Given the public health and safety concerns related to COVID-19, the Commission provided guidance for reporting companies on how to meet their obligations under the federal proxy rules. Continue Reading