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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 amends definition of accredited investor

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 … Continue Reading

Learning from Yahoo!’s missteps: Meeting SEC disclosure obligations after a cyber-attack

In July 2016, Verizon announced it would buy Yahoo! for an unprecedented $4.83 billion. Several months later, Yahoo! disclosed two massive data breaches that affected 1.5 billion people, threatening to scuttle the agreement. Although Verizon recently finalized the acquisition, the hack forced Yahoo! to accept a $350 million reduction in purchase price. Within the last … Continue Reading

SEC Approves SRO Listing Standards Relating to Independence of Compensation Committees

The SEC has approved the listing standard changes relating to compensation committee independence and consultants for both Nasdaq and the NYSE. The proposed listing standards implement Rule 10C-1 under the Securities Exchange Act of 1934, which was added by the Dodd-Frank Act. With respect to the Nasdaq listing standard changes, most listed companies will be required … Continue Reading

Auditor Ratification Votes Expected to Increase

Following a change to New York Stock Exchange Rule 452 in July, brokers for investors who do not provide voting instructions will no longer be able to cast discretionary votes in uncontested director elections. Prior to the change, uncontested director elections were considered “routine” matters, and shares held in street name could be voted by … Continue Reading

Broker Discretionary Voting

On July 1, 2009, the SEC approved a proposed rule change to amend NYSE Rule 452 and Section 402.08 of the NYSE Listed Company Manual to eliminate broker discretionary voting for the election of directors. The amendment will be in effect for all elections of directors held at stockholder meetings held on or after January … Continue Reading

Geithner announces support for executive compensation reforms, but Congress might have its own agenda

On Wednesday, June 10, Secretary of the Treasury, Timothy Geithner outlined the Obama administration’s new proposals on executive compensation. The proposals focused on greater independence of corporate compensation committees and giving shareholders a nonbinding vote on executive compensation, commonly known as ‘say on pay’ provisions. Geithner outlined five guiding principals for executive compensation, namely: compensation … Continue Reading

NYSE to Extend, Expand Temporary Easing of Continued-Listing Standards

The NYSE has extended until June 30, 2009 the temporary lowering of its market-capitalization standard for listed companies. In addition, the NYSE has temporarily suspended the $1 minimum price requirement. The NYSE stated that its actions reflect the Exchange’s “determination that suitable companies should remain listed during the current period of unusual market volatility and … Continue Reading

2008 IPO Slump

As 2008 ends, consider yet another indication that this was a terrible year for financial markets: there has been only one IPO in the US in the last four months according to IPO research firm Renaissance Capital. The U.S. total for 2008 was 43 new issues raising $50 million or more, which makes this the … Continue Reading

No-Short List Expands

The list of 799 “financial companies” that cannot be subject to short sales by order of the SEC is growing. The SEC has authorized major stock exchanges to identify additional companies that should be added to the list, and the NYSE and NASDAQ have added at least 299 and 71 companies, respectively. To identify companies, … Continue Reading

More Efficient Oversight of Insider Trading

The major U.S. securities exchanges and self-regulatory organizations have agreed to consolidate oversight of insider trading in the hands of two regulators: NYSE Regulation and FINRA. The following equity exchanges and FINRA have signed the agreement, which must now be approved by the SEC: American Stock Exchange LLC Boston Stock Exchange, Inc. CBOE Stock Exchange, … Continue Reading

Prediction Markets and Securities Laws

As the Presidential primary elections continue, news outlets have been reporting the accuracy of prediction markets used to predict which candidates will win. A prediction market is like a securities exchange; but instead of trading stocks, market participants trade “contracts” that designate whether an unambiguous future event will occur. The contracts trade among market participants … Continue Reading

NASDAQ Revamps Marketplace Rules

The NASDAQ Listing Qualifications Department is currently accepting public comment on a new draft of its Marketplace Rules. The Rules, which describe the requirements for listing securities on NASDAQ, have been reorganized, and in some cases rewritten, to make them easier to navigate and understand; however, no substantive changes have been made. Several improvements have … Continue Reading

Nasdaq Buys Dubai Stock Exchange

Yesterday it was announced that Nasdaq has reached an agreement with Dubai Bourse to purchase the Nordic OMX Exchange group, a collection of securities exchanges in Sweden, Denmark, Finland, and the Baltics. As part of the deal, Dubai Bourse will end up owning 20% of Nasdaq and 5% of Nasdaq’s voting power. Dubai Bourse also … Continue Reading

Nasdaq to Sell Interest in London Stock Exchange

Nasdaq announced earlier this week that it will consider selling its 31% interest in the London Stock Exchange, but most likely not to a single purchaser. The sale would end Nasdaq’s 18 month-long attempt to buy the LSE, a goal that has been continuously opposed by the LSE’s management. Investors bent on competitive global trading … Continue Reading

Nasdaq and NYSE vie for China

Reuters is reporting here that Nasdaq is in talks with the China Securities Regulatory Commission (China’s version of the SEC) to set up an office in Beijing. According to the article, the NYSE is also pursuing a Chinese office, the obvious goal being to secure listings from Chinese companies. Nasdaq has signed memorandums of understanding … Continue Reading

Nasdaq/NYSE/Amex Disagree on Three-Character Symbols

The New York Stock Exchange today joined the American Stock Exchange in opposing a proposal by the Nasdaq Stock Market to allow any company with a three-character symbol that transfers its securities to Nasdaq from another domestic market to continue using its existing three-character symbol. Traditionally, companies listed on the New York or American Stock … Continue Reading