Securities Law Blog

The Now Famous “He Didn’t Sign It” Defense Should Not Undercut Valid Powers of Attorney in Registration Statements

Corporate officers and directors are deemed to have signed a registration statement in reliance upon valid powers of attorney, but there may be a new concern.

The now famous “he didn’t sign it” defense should be beguiling to lawyers in all practice areas and, for securities lawyers in particular, a reminder to look at the power of attorney contained in or included with registration statements filed with the SEC. Pursuant to a power of attorney, a corporate officer or director may authorize and delegate a named attorney-in-fact (often the company’s chief executive or general counsel) to execute and file a registration statement on the individual’s behalf. A company must file the power of attorney establishing the authority of the attorney-in-fact as an exhibit to the registration statement or include the power of attorney on the signature page of the registration statement.

While we are not aware of an officer or director asserting the “he didn’t sign it” defense to an action predicated on an untrue or omitted statement of material fact in a registration statement in which the officer or director’s name was signed by an attorney-in-fact on their behalf pursuant to a power of attorney, there may be a new concern. We are aware, however, that a power of attorney can be deficient. The most common infirmities to a valid power of attorney are:

• the power of attorney for a particular SEC filing does not reserve the right to execute amendments and, therefore, a new power of attorney (or the signature of the principals) is necessary for any pre-effective or post-effective amendments;
• a company’s registration statement can incorporate by reference a power of attorney already on file with the SEC from a prior registration statement or filing, but the power of attorney is unacceptable if it does not specifically authorize the filing of the current registration statement; and
• the signature page to the registration statement must include the signatures required by the form to be acceptable and when the power of attorney is filed as an exhibit, it does not relieve the company from including the officer and director names in the body of the registration statement with the signature of the attorney-in-fact.

Proper powers of attorney should cover the specific filing being made by the company and any and all amendments to that filing, as well as all other documents in connection with the filing. The power of attorney, though electronically filed with a typed conformed signature in the document, should be manually executed by the officer or director and the original should be saved for at least five years. If the power of attorney is in the Signatures section in Part II of the registration statement (with an appropriate reference thereto in the exhibits index), the manually executed original should be saved for five years, and all amendments to the registration statement manually signed by the attorney-in-fact on behalf of the officer or director should likewise be saved. There are many valid business reasons to utilize a power of attorney and there is no legal reason why a corporate officer or director should not be deemed to have signed a registration statement in reliance upon a valid power of attorney.