Securities Law Blog

Corporate partner Kenneth Silverman and litigation partner Kerrin Klein published an article in the Securities Regulation Law Journal, Spring 2024 ed. entitled “Quarterly Survey of SEC Rulemaking and Major Court Decisions.” The article reviews the SEC’s rulemaking activities and other decisions relating to federal securities laws from October 1, 2023 through December 31, 2023. “This quarter,” the authors write, “the SEC proposed one new rule and approved eight final rules. In relevant part, the SEC’s latest round of rulemaking largely targets reforms to the 1934 Act to increase regulatory oversight and promote market fairness for all participants. The most significant rule affects investors’ beneficial ownership reporting obligations.”

Corporate partner Kenneth Silverman and litigation partner and co-chair Brian Katz published an article in the Securities Regulation Law Journal, Winter 2023 ed. entitled “Quarterly Survey of SEC Rulemaking and Major Court Decisions.” The article reviews the SEC’s rulemaking activities and other decisions relating to federal securities laws from July 1, 2023 through September 30, 2023. “This quarter,” the authors write, “the SEC proposed six new rules and approved seven final rules. In pertinent part, the final and proposed rules continue the ongoing trend in recent years to modernize current regulatory frameworks in a manner that facilitates increased market resiliency and investor protection.” The highlight of SEC’s rulemaking this quarter was the adoption of new cybersecurity disclosure requirements for issuers.

Corporate partner Kenneth Silverman and litigation partner and co-chair Brian Katz published an article in the Securities Regulation Law Journal, Fall 2023 ed. entitled “Quarterly Survey of SEC Rulemaking and Major Court Decisions.” The article reviews the SEC’s rulemaking activities and other decisions relating to federal securities laws from April 1, 2023 through June 30, 2023. “This quarter,” the authors write, “the SEC proposed four new rules and approved seven final rules. In pertinent part, the final and proposed rules continue the ongoing trend in recent years to modernize current regulatory frameworks in a manner that facilitates increased transparency and investor protection.”

Corporate partner Kenneth Silverman and litigation partner and co-chair Brian Katz published an article in the Securities Regulation Law Journal, Summer 2023 ed. entitled “Quarterly Survey of SEC Rulemaking and Major Court Decisions.” The article reviews the SEC’s rulemaking activities and other decisions relating to federal securities laws from January 1, 2023 through March 31, 2023. “This quarter,” the authors write, ”the SEC proposed nine new rules and approved three final rules. The SEC's latest rule changes and proposals are largely geared towards modernizing the mechanisms of capital markets infrastructure and bolstering protections to individuals and entities from cybersecurity and privacy risks.”

Corporate partner Kenneth Silverman and litigation partner and co-chair Brian Katz published an article in the Securities Regulation Law Journal, Spring 2023 ed. entitled “Quarterly Survey of SEC Rulemaking and Major Appellate Decisions.” The article reviews the SEC’s rulemaking activities and other decisions relating to federal securities laws from October 1, 2022 through December 31, 2022. “The SEC’s latest rule changes and proposals are largely geared toward streamlining disclosure processes,” the authors write. “Given the recent collapse of cryptocurrency exchange FTX and related actions that came to light during this quarter, we expect the SEC will begin to develop and propose new rules to regulate and provide further oversight over cryptocurrency markets.”

The U.S. Securities and Exchange Commission (the “SEC”) filed enforcement actions on May 14, 2020, against two unrelated companies, Turbo Global Partners, Inc. (“Turbo”) and Applied BioSciences Corp. (“APPB”). The SEC charged both companies with securities fraud based on alleged materially misleading statements that the companies were offering and shipping products to combat the coronavirus (COVID-19). These actions taken by the SEC are consistent with approaches taken by other regulators, including the Federal Trade Commission and Food and Drug Administration (the “FDA”), with regard to misleading statements made in connection with coronavirus-related products. On the whole, regulators appear to be particularly cognizant of businesses and individuals seeking to take improper advantage of the circumstances created by the global pandemic, and as such are taking action against such companies and individuals.

As businesses in the current environment are looking for ways to conserve or obtain liquidity, we have set forth below some avenues to liquidity, one or more of which might be applicable to your business.

On March 25, 2020, the SEC issued an updated executive order granting extended filing relief and disclosure guidance as publicly traded companies address the COVID‑19 pandemic and its effect on operations and financial condition. The SEC Staff also recently issued a statement regarding the manual signature requirement for electronic filings with the SEC. This post summarizes the significant aspects of the SEC’s recent pronouncements.

Despite the continuing coronavirus global pandemic, business marches on, including compliance with applicable regulatory requirements. Regulatory bodies recognize that the reduced staffing, “social distancing” and other factors could hamper efforts to comply with various regulations. The U.S. Securities and Exchange Commission (“SEC”) has acted to ameliorate certain of the burdens publicly traded companies are currently facing. In addition, companies need to take into account the effects of COVID-19 on their businesses and regulatory disclosures, and we have highlighted certain significant considerations in this client alert.

On January 30, 2020, the Securities and Exchange Commission (“SEC”) proposed a series of new amendments to the Regulation S-K requirements. The proposed amendments seek to modernize, simplify, and enhance certain financial disclosure requirements primarily by reducing duplicative disclosure and focusing issuers’ efforts on material information. The proposal would eliminate Items 301 and 302, which deal with selected financial data and supplementary financial data, respectively. The SEC’s primary focus is on Item 303. This item addresses disclosure requirements in the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section of issuers’ periodic reports (i.e., Forms 10-K and 10-Q) and registration statements.

On August 21, 2019, the Securities and Exchange Commission (the “SEC”) (i) approved new guidance (the “Guidance”) regarding the proxy voting responsibilities of investment advisers under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and (ii) issued an interpretation and related guidance (the “Interpretation”) regarding the applicability of the federal proxy rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to proxy voting advice provided by proxy advisory firms. The Guidance discusses, among other things, the ability of investment advisers to establish a variety of different voting arrangements with their clients and matters they should consider when they utilize the services of a proxy advisory firm. Specifically, the Guidance clarifies how an investment adviser’s fiduciary duties to its clients and Rule 206(4)-6 of the Advisers Act relate to an investment adviser’s voting authority on behalf of clients, particularly where the investment adviser retains a proxy advisory firm. The Interpretation confirms the SEC’s historical position that proxy voting advice generally constitutes a “solicitation” under Rule 14a-1(l) of the Exchange Act and, as such, falls under the purview of the antifraud provisions of Rule 14a-9 of the Exchange Act. The Guidance and Interpretation will become effective upon publication in the Federal Register. The Guidance and Interpretation were issued after years of advocacy by members of Congress, corporations and others claiming that proxy advisory firms such as Institutional Shareholder Services and Glass Lewis & Co. wield too much power and a regulatory framework should be put in place to address issues related to the services provided by these firms such as conflicts of interest, accuracy of reports, transparency and oversight.

First open meeting under Chair Clayton includes unanimous approval of proposed revisions to SEC disclosure rules and forms

On October 26, 2016, the Commissioners of the Securities and Exchange Commission voted 2-1 to propose to require universal proxy ballots in contested elections. Proponents of universal proxies believe that the current federal proxy regime makes it too difficult for shareholders to mix and match their votes among all candidates, thereby disenfranchising shareholders and undermining corporate governance in the United States.  Universal proxies would include all management and dissident nominees on one proxy card from which shareholders would vote.  Under the current rules and proxy voting mechanics, a shareholder who desires to split votes generally must attend the shareholders meeting and vote by ballot. 

Nasdaq is now conducting a survey among market participants for a new rule that could prohibit directors receiving third party payments from being considered independent.

The SEC embraces regulatory simplification mandated by the FAST Act with two new rules that address the timing and cost challenges faced by smaller publicly traded companies.

This post discusses the SEC’s approval of two interim final rules mandated by the capital markets aspects of the Fixing America’s Surface Transportation Act, signed into law on December 4, 2015.  These rules address the timing and cost challenges faced by smaller publicly traded companies and are designed to ease disclosure requirements in connection with IPOs of emerging growth companies and certain registration statements filed by smaller reporting companies.