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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

SEC Proposes Rules for Crowdfunding Securities Offerings

The SEC voted unanimously to propose rules regulating the offering and selling of securities through “crowdfunding”. Crowdfunding – a method of raising money through small sums contributed by many individuals – has become an internet mainstay. But so far, crowdfunding websites (such as Kickstarter or Indiegogo) constructed their platforms so as to avoid falling under … Continue Reading

Mark Cuban Wins Insider Trading Trial

After “refusing to be bullied” into settlement, Mark Cuban, the billionaire owner of the Dallas Mavericks, won over a Texas jury and was cleared of insider trading charges brought by the SEC. The nine-person jury in the federal court in Dallas determined that Cuban did not violate federal securities laws in selling his stake in … Continue Reading

SEC Approaches Shutdown: What Functions Will Continue?

At the beginning of the federal shutdown, the SEC announced that it would continue to operate as normal “for a few weeks” because of its ability to access a pool of funds not available to other federal agencies. But as we continue into the third week of the federal shutdown, that ambiguous timeline of a … Continue Reading

SEC Formally Proposes CEO Pay Ratio Disclosure Rule

On Wednesday, by a 3-2 vote, the SEC approved proposal of the long-anticipated CEO pay ratio disclosure rule (read the press release). The proposed rule, part of the 2010 Dodd-Frank Act, would require a public company to disclose the ratio of compensation between its CEO and the median compensation of all its other employees. The … Continue Reading

SEC Charges Former VP of IR with Violation of Reg FD

On September 6, 2013, in its first Regulation FD enforcement action in almost two years, the SEC charged the former VP of IR for First Solar, Inc. ("First Solar") with violating Regulation FD.  An SEC investigation determined that Lawrence Polizzotto violated Regulation FD when he indicated in telephone conversations with certain analysts that First Solar was not likely … Continue Reading

SEC Will Redraft, Not Appeal, District Court Rejection of Resource Extraction Issuer Payment Disclosure Rules

We wrote previously about the United States District Court for the District of Columbia vacating Securities and Exchange Commission Rule 13q-1, which required certain companies to disclose payments made to foreign governments in connection with the commercial development of oil, natural gas or minerals. The SEC announced Sept. 3, 2013 that it would not appeal … Continue Reading

SEC Reconsidering Pre-IPO Quiet Period

After the recent complaints that smaller investors were not as informed as larger ones about the Facebook IPO, the SEC is reviewing the “quiet period” rules. These rules restrict the communications that an issuer may have with investors during an IPO.  Attached is a letter (posted by the Wall Street Journal) that SEC Chairman, Mary Schapiro, sent to Rep. Darrell … Continue Reading

Feds Announce Indictment Against SAC Capital Advisors

Federal prosecutors and the F.B.I. today announced a criminal indictment against SAC Capital Advisors, the embattled hedge fund managed by billionaire Steven Cohen, based on an alleged broad conspiracy to commit securities fraud through insider trading. The indictment against the hedge fund itself — as opposed to its employees — could have disastrous consequences for … Continue Reading

District Court Dismisses Conflict Minerals Challenge

On July 23, 2013, the United States District Court for the District of Columbia dismissed the challenge to the Securities and Exchange Commission (SEC) conflict minerals rules (the Rules) brought by a group of trade associations. The Rules were issued under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and … Continue Reading

SEC Lifts Ban on General Solicitation in Private Placements

On July 10, 2013, the Securities and Exchange Commission adopted a new rule to eliminate the ban on general solicitation and general advertising for certain private securities offerings, as required by Section 201(a) of the JOBS Act.  The final rule amends Rule 506 to permit issuers to use general solicitation and general advertising to offer their … Continue Reading

District Court Vacates Resource Extraction Issuer Payment Disclosure Rules; May Foreshadow Ruling on Conflict Minerals Challenge

On July 2, 2013, the United States District Court for the District of Columbia (the “Court”) vacated Securities and Exchange Commission (“SEC”) Rule 13q-1 (the “Rule”), which required certain companies to disclose payments made to foreign governments in connection with the commercial development of oil, natural gas or minerals. The Court found that (i) the … Continue Reading

Staying Ahead of the Regulatory Curve

Over the past several months, the SEC has issued new and updated regulations that are likely to have an impact on your business now and in the near future. The compilation of articles in this eBook — SEC Updates: Staying Ahead of the Regulatory Curve — discuss three important SEC regulatory changes: Using social media … Continue Reading

SEC Charges Revlon with Misleading Shareholders in Going Private Transaction

On June 13, 2013, the Securities and Exchange Commission (“SEC”) charged Revlon with violating federal securities laws when the company misled shareholders during a going private transaction.  Specifically, the SEC found that Revlon violated Section 13(e) of the Securities Exchange Act of 1934 and Rule 13e-3(b)(1)(iii), which prohibits issuers and their affiliates in going private … Continue Reading

Introduction of H.R. 2274 – The Small Business Mergers, Acquisitions, Sales and Brokerage Simplification Act of 2013

H.R. 2274, the Small Business Mergers, Acquisitions, Sales and Brokerage Simplification Act of 2013, was introduced in the U.S. House of Representatives by Rep. Bill Huizenga on June 6, 2013.  The bill is intended to reduce the regulatory costs incurred by buyers and sellers of smaller privately held companies for professional business brokerage services.  The … Continue Reading

SEC Issues Investor Alert for Private Oil & Gas Offerings

We previously blogged about securities regulation of interests in oil and gas exploration and development. Industry participants, state and federal securities regulators have recently cautioned investors regarding investing in oil and gas ventures. At the federal level, the U.S. Securities and Exchange Commission (SEC) issued an investor alert aimed at private oil and gas offerings. … Continue Reading

SEC Issues FAQs on Conflict Minerals & Resource Extraction

On May 30, 2013, the Securities and Exchange Commission (“SEC”) issued 12 Frequently Asked Questions (“FAQs”) providing guidance on various aspects of Securities Exchange Act of 1934 (“Exchange Act”) Section 13(p), Rule 13p-1 and Item 1.01 of Form SD relating to disclosure regarding the use of conflict minerals from the Democratic Republic of the Congo … Continue Reading

SEC and CFTC Red Flag Rules Become Effective May 20, 2013

The Securities and Exchange Commission and the Commodity Futures Trading Commission have adopted rules that require most broker-dealers, mutual funds, investment advisers, and certain other regulated entities to create programs to prevent identity theft. The new rules become effective May 20, 2013, and entities regulated by the new rules must comply by November 20, 2013. … Continue Reading

SEC Social Media Guidance – Tread Carefully

As discussed in a post on April 2, 2013, the SEC issued a report on that date that contained guidance on the use of social media to publicly disclose material information under Regulation FD. The report centered on the SEC investigation of Netflix and Netflix CEO, Reed Hastings, and whether Regulation FD was violated when … Continue Reading

SEC Confirms Use of Social Media for Company Announcements

The SEC issued a report today that clarifies that companies may use social media outlets to make key announcements in compliance with Regulation FD (Fair Disclosure) so long as investors have previously been alerted about which social media outlet(s) will be used to disseminate such information. Regulation FD requires companies to distribute material information in a manner reasonably … Continue Reading

SEC Publishes Handbook For Foreign Issuers: “Accessing U.S. Capital Markets”

This month the SEC released a handbook for foreign companies interested in registering and issuing securities on U.S. exchanges. The handbook, titled “Accessing the U.S. Capital Markets – A Brief Overview for Foreign Private Issuers,” explains the eligibility requirements for “foreign private issuer” status and the unique registration and reporting rules that apply to foreign companies.… Continue Reading

SEC Freezes Assets in Swiss-Based Account From Suspected Heinz Acquisition Insider Trading Scheme

On February 15, 2013, the Securities and Exchange Commission ("SEC") issued a press release announcing that it had obtained an emergency court order to freeze assets in a Swiss-based trading account that was used to gain more than $1.7 million from insider trading activities in connection with yesterday’s announced acquisition of H.J. Heinz Company. In a complaint … Continue Reading
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