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Increasing commentary on the importance of ESG disclosure

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 … Continue Reading

SEC proposes exemptions from registration for finders

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 … Continue Reading

SEC’s updated guidance on changing the date, time or location of annual shareholders’ meeting

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 … Continue Reading

Coronavirus and securities compliance related considerations

On March 4, 2020, the Securities and Exchange Commission issued an Order granting conditional relief from certain filing obligations under the federal securities laws for reporting companies whose compliance may be delayed by the coronavirus disease (COVID-19). In the press release accompanying this unprecedented Order, SEC Chairman Jay Clayton noted, “The health and safety of … Continue Reading

SEC seeks to regulate transactions utilizing cryptocurrencies under federal securities laws

Any person who regularly monitors the U.S. financial markets has likely noticed the recent emergence of digital currency, also referred to as “cryptocurrency,” in recent months. For example, the price of bitcoin, the most widely known form of cryptocurrency, surged from a price below $800 per bitcoin in 2016, to a remarkable $17,000 per bitcoin … Continue Reading

Reminder: SEC exhibit hyperlink and format rules become effective Sept. 1, 2017

Effective for filings on and after Sept. 1, 2017, registrants will be required to include a hyperlink to each exhibit identified in the exhibit index of periodic reports, current reports and registration statements. For registration statements, the rule applies to the initial registration statement, and to each subsequent pre-effective amendment. The SEC adopted the final … Continue Reading

SEC proposed rules for compensation clawback policies

The SEC has proposed rules that require the securities exchanges to adopt rules that in turn require listed companies to adopt, disclose and comply with a clawback policy for executive compensation based on erroneous financial statements. The new rules would apply to almost all companies listed on a securities exchange (such as NASDAQ and NYSE), … Continue Reading

What types of companies might use Regulation A+ to raise capital?

Recently finalized Regulation A+ allows most private companies to raise up to $50 million by selling securities to the public. Companies using Regulation A+ can advertise the offering and solicit investors, and anyone can invest (subject to some reasonable investment limits for non-accredited investors). Owners of a company raising capital with Regulation A+ can sell up … Continue Reading

World’s top banks plead guilty to gaming foreign-currency markets

Scandal roiled the banking industry Wednesday as four of the world’s largest banks — Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland — pleaded guilty to federal antitrust violations for conspiring to manipulate foreign-currency markets over the course of several years. The scheme involved collusion by traders at the various banks to fix the … Continue Reading

FINRA adopts rule to permit sharing of transaction based compensation to unregistered persons

The Securities and Exchange Commission (SEC) has approved the Financial Industry Regulatory Authority’s FINRA Rule 2040, which will permit the payment of compensation, fees, concessions, discounts, commissions or other allowances to unregistered persons if a member firm determines the activities of the unregistered person in question do not require registration as a broker-dealer. Support for … Continue Reading

Late Form 4s aren’t just embarrassing anymore

Yesterday, the SEC announced penalties totaling approximately $2.6 million against directors, officers, beneficial owners and issuers for failure to promptly report information about holdings and transactions in company stock. The primary enforcement weapon for these types of failures historically has been public shaming: Rule 405 of Regulation S-K requires issuers to identify insiders who failed … Continue Reading

U.S. Commerce Department acknowledges that conflict minerals are too hard to track

According to a Wall Street Journal article reported by Emily Chasen, Senior Editor at The Wall Street Journal‘s CFO Journal, on Sept. 5, 2014, the U.S. Commerce Department acknowledged “it cannot determine which refiners and smelters around the world are financially fueling violence in the war-torn Congo region.” The WSJ article noted that companies including … Continue Reading

SEC adopts money market fund reform

On July 23, 2014, the Securities and Exchange Commission announced that it adopted amendments to the rules governing money market mutual funds. Read a copy of the final rules. These amendments complete some long-awaited steps to make structural and operational reforms to address risks of investor runs in money market funds to address investor runs out of … Continue Reading

First conflict mineral report filed on Form SD

On April 24, 2014, Siliconware Precision Industries Co., Ltd. (Siliconware) earned the distinction of being the first registrant to file a conflict minerals report on Form SD. Here are links to Siliconware’s Form SD and its conflict minerals report. Although the filing deadline is not until June 2, 2014, this example gives registrants a glimpse … Continue Reading

SEC issues no-action letter regarding transfer of ownership of privately held companies

Earlier this month, the Securities and Exchange Commission (SEC) issued a no-action letter indicating the staff of the Division of Trading and Markets would not recommend enforcement action if an “M&A broker” were to engage in the transfer of the ownership and control of a privately held company through the purchase, sale or transfer involving securities … Continue Reading

SEC Agrees to First Ever Deferred Prosecution Agreement With An Individual

A “deferred prosecution agreement” (or DPA) is not a new concept to government prosecutors or to SEC Chairman Mary Jo White, but it is new to the SEC. Under a DPA, the government agrees to withhold prosecution in exchange for enforcement assistance — providing information, implementing internal compliance policies, or other cooperation with SEC investigations. This … Continue Reading
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