Securities Law Blog

Earlier this month, the SEC’s Division of Corporation Finance announced it had expanded its policies to better accommodate public issuers seeking to raise capital and go-to-market faster.

Corporate partner Kenneth Silverman and litigation partner Kerrin Klein published an article in the Securities Regulation Law Journal, Winter 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 July 1, 2024 through September 30, 2024. "This quarter," the authors write, "the SEC proposed one new rule and approved seven final rules. The final and proposed rules released this quarter continue the SEC’s trend of increasing the scope and transparency of information available to investors."

Earlier this month, the Securities and Exchange Commission (SEC) settled charges against a public company for failing to disclose in its annual proxy statements the full extent of the executive compensation paid to its Chief Executive Officer.

According to the SEC’s order, the company failed to disclose approximately $1,000,000 worth of perquisites and other personal benefits provided to its Chief Executive Officer, including expenses associated with his authorized use of chartered aircraft for personal purposes. As a result, the company significantly understated the ...

Olshan corporate partners Kenneth Silverman and Honghui Yu authored an article in Bloomberg Law entitled “GameStop’s $3.5 Billion Windfall Shows Power of SEC Rule Mastery.” Their article highlights how public companies, with the right securities law strategies in place, can raise money quickly on the heels of viral news, with the rise in both retail investors and “influencer” investors. GameStop is a notable example of a public company that was able to raise billions of dollars through at-the-market offerings following a surge in the company’s stock price driven by viral social media posts. In total, GameStop has raised about $3.5 billion in gross proceeds. Ken and Honghui represented GameStop in its at-the-market offerings.

Corporate partner Kenneth Silverman and litigation partner Kerrin Klein published an article in the Securities Regulation Law Journal, Fall 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 April 1, 2024 through June 30, 2024. “This quarter,” the authors write, “the SEC proposed one new rule and approved two final rules. In relevant part, this quarter the SEC has largely focused on addressing the increased security threats and potential of criminal activity faced by the nation’s financial systems and its customers.”

Olshan litigation partner John Moon and corporate partner Kenneth Silverman authored an article in Bloomberg Law entitled “SEC Enforcement Sweep Shows It Takes Reporting Failures Seriously.” In the article, John and Ken discuss the Securities and Exchange Commission’s (SEC) recent settlement with 11 institutional investment managers, highlighting a potential shift toward stricter enforcement of Form 13F violations. They explain the implications of these settlements for foreign and domestic investment managers, shedding light on the importance of compliance with U.S. reporting requirements, and emphasize the SEC's renewed focus on Forms 13F and 13H reporting obligations, which demand increased attention from large institutional investors operating in U.S. capital markets. They also highlight the SEC’s lenience towards those delinquent filers that self-reported their violations and cooperated with the SEC’s investigation. "Regardless where an investor and their broker-dealer are physically located, the SEC maintains jurisdiction if they invest in US capital markets," John and Ken note. They explain that the SEC’s cross-border enforcement sends a strong message to the international investment community to remain diligent about regulatory filings.

Olshan litigation partner John Moon and corporate partner Kenneth Silverman authored an article in New York Law Journal entitled “SEC Enforcements Highlight Risk of Noncompliance—Gone Are 'You Pay Your Money and Takes Your Chance' Days in the U.S.” In the article, John and Ken discuss the significant amount of foreign investment in the United States, representing 20 percent of all U.S. securities and approximately 17 percent of all equity securities traded on U.S. stock markets. Because of such large figures, they advise that, while investment by foreign money managers in U.S. markets can indeed show high returns, investors must diligently navigate the nation’s complex regulatory requirements. “Recently, SEC concerns over the influence of large investors on the securities markets have manifested a robust sweep of enforcement actions,” John and Ken write. “The extra-territorial nature of the SEC’s jurisdiction over foreign money managers runs counter to our conceptions of jurisdiction that are generally based on the use of domestic wires or the mails, or where the defendant corporation is headquartered or registered.” They advise that foreign compliance teams and U.S. securities counsels must stay abreast of all laws—and any new reporting requirements the SEC may implement. “The costs of failing to do so can be extensive,” they explain. “If an investor is faced with delinquent filings, proactive self-reporting and cooperation with the SEC are critical tools for remediation.”

Corporate partner Kenneth Silverman and litigation partner Kerrin Klein published an article in the Securities Regulation Law Journal, Summer 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 January 1, 2024 through March 31, 2024. “This quarter,” the authors write, “the SEC proposed one new rule and approved nine final rules. In relevant part, the final and proposed rules continue the SEC’s trend of increasing the scope of information available to investors. The highlights of this latest round of rulemaking are the changes to SPAC regulations and the hotly contested climate-risk disclosures.”

Publicly traded companies making strategic pivots from their current primary business focus may be unintentionally becoming “shell companies” if they dispose or monetize their legacy business assets before, upon completion of, or shortly after their pivot. The NYSE is also considering suspensions for companies changing their primary business focus after listing.

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.”