Andrew Freedman Quoted in Agenda on the SEC’s New Proposed Rules to Section 13D and 13G


Olshan Partner and Co-Chair of the firm’s Shareholder Activism practice Andrew Freedman was recently quoted in Agenda (subscription required) regarding his thoughts on the SEC’s new proposed rules to Section 13D and 13G and its impact on activist investors. Last week, the SEC proposed sweeping changes to the filing requirements under Section 13D and 13G that have been in effect for more than 50 years. When asked about the shortened window for activist stakeholders to disclose their stakes in companies to tackle threats such as proxy fights and wolf-pack activism, Andy believes, “[T]his was driven by a misguided perception on the SEC’s part that somehow because activist stake-building moves the market when disclosed, [and] that other shareholders have a right to early disclosure of any such activist stake-building. This misses the mark.” Andy went on to mention that, “Information asymmetry is a hallmark of a functioning market. At some point, between an activist’s decision to build a position in a company and when they file their 13D, there are going to be shareholders who sold who may later wish they hadn’t. It’s as if the SEC is somehow likening a shareholder’s position in a company as a form of material insider information.” Since companies tend to already know when investors are building aggressive positions, Andy pointed out that there “are so many other types of undisclosed company-related information that, if known by shareholders, would influence their decisions to buy or sell a company’s shares.”

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