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Securities Law Blog

The Securities Law Blog provides commentary and news on the latest securities law developments impacting established and emerging growth publicly-traded issuers and investment banks, as well as entrepreneurs and venture-backed private entities. Our blog closely follows SEC rulemaking in several key areas including public and private securities offerings, shareholder activism and equity investment, and mergers & acquisitions.

The authors of this blog are members of the Corporate/Securities practice of Olshan Frome Wolosky LLP.  Since our founding, this firm has been distinguished by responsive, independent and client-focused legal services provided by lawyers with a profound commitment to the companies they serve. This blog is an outgrowth of this representation of our clients in a wide range of capital market transactions.

Showing 38 posts in SEC.

SEC Issues Guidance on Proxy Voting Responsibilities of Investment Advisers and Interpretation Regarding Applicability of Proxy Voting Rules to Proxy Advisory Firm Voting Recommendations

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. Read More ›

The SEC Proposes a Philosophical Shift to Principles-Based Disclosure in Response to Increasingly Irrelevant, Outdated and Immaterial Information in Public Filings

While the SEC favors a more flexible principles-based approach to disclosure of business descriptions and risk factors as determined by a company’s management, a lack of bright-line, quantitative rules to specify when disclosure is required may lead to second guessing by regulators, among others. Read More ›

The SEC Encourages Public Company Borrowers to Address the Risks of LIBOR’s Phase-Out in Their Public Filings

The SEC staff will be actively monitoring the extent to which public companies and other market participants are identifying and addressing risks associated with the expected discontinuation of LIBOR, a common system of interest rates for financial transactions, past 2021. Read More ›

The SEC Looks for More Transparency in Influencer Marketing

The SEC’s Office of Investor Education and Advocacy warns investors to be skeptical of endorsements from famous influencers marketing new investment opportunities. Read More ›

The SEC Proposes to Extend the JOBS Act's "Testing the Waters" Provision to All Issuers, Regardless of Size, in All Types of Securities Offerings

The proposal would allow companies to more effectively consult with potential institutional investors to better identify acceptable offering terms in advance of a public offering, as compared to the current practice of repeated registration statement amendments to calibrate the public markets. Read More ›

Time To Use Rule 473(b) and Remove the Section 8(a) Delaying Amendment from Your Registration Statement

In order to avoid undue delay caused by the current partial government shutdown, issuers may wish to remove the “delaying amendment” on the face of their registration statements to become effective automatically after a 20-day statutory period following the filing. The SEC’s operations plan for the shutdown also includes this suggestion. Lack of the SEC’s normal review and clearance of registration statements raises policy questions. Read More ›

SEC Adopts Rules Opening the Door for Public Companies to Use Regulation A for Their Securities Offerings

Regulation A would be a logical choice for smaller, non-exchange traded public companies, particularly for broadly disseminated public offerings of their shares to “uplist” to Nasdaq and for subscription rights offerings to their shareholders. Read More ›

The SEC's Small-Cap Acquisition Anomaly

Smaller publicly-traded companies that do not meet the public float requirements for Form S-4 incorporation by reference face an expensive and time-consuming public M&A process; the SEC’s focus on capital formation by smaller public companies should not overshadow efforts to aid in their future growth through acquisitions. Read More ›

Airbnb Proposes Unique New Class of Sharing Economy Participant to Be Eligible for SEC Rule 701’s Registration Exemption

Acknowledging that there are substantial, but non-traditional relationships between workers and their 21st century companies, Airbnb makes its case to broaden the exemption from registration that allows private companies to issue compensatory equity to employees to also extend to contractors such as hosts on its network. Read More ›

U.S. Rep. Hensarling Says Aging Regulations Are Suffocating Startups and IPOs: It's Time to Breathe New Life Into Markets With JOBS Act 3.0

Rep. Jeb Hensarling’s op-ed in The Wall Street Journal highlights five key capital formation bills that are now being considered to build a steady stream of small businesses for strong long-term economic growth and to restore U.S. competitiveness. Read More ›

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