New SEC Guidance Addresses Disclosure Requirements for Breach Events

As the SEC has made clear on numerous occasions over the past year, cybersecurity will continue to be a major enforcement priority under the Commission’s new leadership.  As we have previously covered, one new area of potential enforcement activity that the SEC has warned about concerns the failure of public companies to make disclosures regarding material cyber events.  While the SEC had previously provided some guidanceto publicly traded companies about when to disclose such events,… More

Supreme Court Invalidates SEC Expansion of Who Can Be a Whistleblower Under Dodd-Frank Act

On Wednesday February 21, 2018, the United States Supreme Court rejected a Securities Exchange Commission regulation that sought to expand the definition of a whistleblower under the Dodd-Frank Act, and thereby resolved a split in the Circuit Courts.  In Digital Realty Trust v. Somers, the Court held that anti-retaliation protection afforded to a whistleblower under the Dodd-Frank Act is available only to an individual who provides information relating to a violation of the securities laws to the Securities and Exchange Commission before suffering adverse employment action. … More

Government Shutdown: SEC Impact

In light of the risk of an imminent government shutdown, now is a good time to review the SEC’s “Operations Plan under a Lapse in Appropriations and Government Shutdown.” While the Operations Plan only covers a total government shutdown and not a partial shutdown (which occurred in 2013), the Operations Plan notes that:

  • the SEC’s EDGAR system will remain fully functional as long as funding for the contractor remains available through permitted means;…
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Massachusetts Securities Division Files First Complaint Related to Initial Coin Offering

On January 17, 2018, the Massachusetts Securities Division Enforcement Section filed a complaint against the company Caviar and its founder Kirill Bensonoff for violations of the Massachusetts Uniform Securities Act in connection with an ongoing initial coin offering (ICO).

This is Secretary of the Commonwealth William F. Galvin’s first enforcement action related to an ICO. Last month, Secretary Galvin announced that the Massachusetts Securities Division would conduct a sweep of Massachusetts entities engaged in ICOs.… More

Cybersecurity 2018 – The Year in Preview: Cryptocurrencies and Blockchain

Bitcoin is white-hot. The cryptocurrency’s price has increased an astounding 2000% in 2017 alone.  The app for Coinbase, the most popular cryptocurrency exchange, held the #1 spot on Apple’s app store, unseating the likes of Facebook and Instragram.  Earlier this month the Chicago Exchange began offering trades in bitcoin futures, the first major exchange to do so (and futures contracts were up some 560% after one day of trading).… More

Massachusetts Announces ICO Sweep

The Massachusetts Securities Division has announced that it will conduct an exam sweep of Massachusetts entities engaged in initial coin offerings (ICOs).

In the announcement, released on Friday, Massachusetts Secretary of the Commonwealth William Galvin said that he views ICOs as securities that must be registered with the state.

“Blockchain may or may not change the way banks transfer money or the way credit payments are made,… More

SEC’s Cyber Unit Takes Aim at ICOs

For the second time in less than a month (click here for a prior enforcement action), the SEC’s newly created Cyber Unit has shut down an initial coin offering (ICO).  This time the ICO was for Munchee, Inc., a California-based developer of an iPhone application for people to review restaurant meals.  The recent enforcement activity follows several policy statements and warnings regarding ICOs.  … More

SEC Staff Issues New Guidance on Shareholder Proposals

On November 1, 2017, the SEC’s Division of Corporation Finance issued Staff Legal Bulletin 14I reflecting guidance ostensibly easing its prior views on the availability of no-action relief for certain shareholder proposals submitted under Rule 14a-8.  The guidance affects four topics under the rule:

  • the ordinary business exclusion (Rule 14a-8(i)(7));
  • the economic relevance exclusion (Rule 14a-8(i)(5));
  • proposals by proxy; and
  • the use of images and graphs in supporting statements.…
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Investor Concern Regarding Dual-class or Multi-class Stock Continues

On September 26, 2017, proxy advisory firm Institutional Shareholder Services (ISS) released the results of its annual Governance Principles Survey, which showed that 43% of surveyed investors consider multi-class capital structures with unequal voting rights inappropriate for a public company under all circumstances.  An equal percentage felt such structures may be appropriate in the presence of protections for low-vote shareholders.  Only 5% supported this structure without limitations. … More

SEC Provides Hurricane Relief

On September 28, 2017, the Securities and Exchange Commission announced regulatory relief for a broad class of companies and others affected by Hurricane Harvey, Hurricane Irma, and Hurricane Maria.  The SEC staff also indicated that it would be responsive to other issues that these parties may face if brought to the staff’s attention on a case-by-case basis.

The SEC issued an exemptive order that conditionally exempts affected persons from certain requirements of the federal securities laws for a period following the hurricanes. … More