On July 2, 2018, the SEC brought a settled cease-and-desist proceeding against The Dow Chemical Company for failing to disclose approximately $3 million in executive perquisites, including personal use of company aircraft, in its proxy statements over five years. The SEC concluded that Dow failed to adequately train key employees to ensure that the proper standard for perquisite disclosures was being applied and that Dow had inadequate processes and procedures to ensure proper reporting of perquisites.… More
On June 28, 2018, the SEC adopted amendments to its eXtensible Business Reporting Language, or XBRL, rules to require operating companies to use Inline XBRL format for financial statement information included in periodic and current reports and certain registration statements. The amendments also eliminate the requirement that companies post their financial statements in XBRL format on their websites.
To submit financial statements in Inline XBRL format,… More
Yesterday, the Securities and Exchange Commission approved changes to the definition of a “smaller reporting company,” or SRC, that will significantly increase the availability of the less burdensome, scaled disclosure requirements applicable to companies qualifying as SRCs . The amendments increase the public float threshold for qualification as an SRC from less than $75 million to less than $250 million, in each case regardless of the company’s revenues. In addition,… More
Every day it seems there is another outcry over excessive executive compensation at public companies. This year, for the first time, public companies are disclosing ratios of CEO compensation to median employee compensation, and both the media and politicians are quick to highlight pay ratios in excess of 1,000-to-one as evidence of everything that is wrong with executive compensation.
Yet these complaints have a certain air of unreality to them,… More
As noted in our earlier post Pre-IPO Companies can have disclosure obligations too, a recent Rule 701 enforcement action by the SEC has served as a reminder of the pitfalls that exist for private companies with increasing valuations and robust equity compensation programs. Happily, some relief is on the way based on a provision included in the recently enacted Economic Growth, Regulatory Relief, and Consumer Protection Act.… More
Perhaps in the spirit of the saying “if you can’t beat them, join them,” the Securities and Exchange Commission recently launched an initial coin offering website of its own – HoweyCoins.com. No, the SEC has not suddenly decided to join the coin offering craze. But the Office of Investor Education and Advocacy has launched this new mock site to illustrate the dangers of such offerings to retail investors. The site touts a coin investment opportunity in the travel industry and comes complete with many of the enticements common to the very offerings that the SEC is attempting to police,… More
Why You and Your Board Need to Adapt to Increased Expectations from Constituencies Old and New
Public companies are facing heightened expectations with respect to the social and environmental impacts of their business operations. Recent developments such as the emergence of the #MeToo movement and increasing public concern regarding issues ranging from climate change to gun control have highlighted the risks that exist in today’s social media-driven environment. When allegations of corporate missteps can instantly capture public attention,… More
Join us today at 12:30 p.m. Eastern time for our webinar on emerging expectations for public companies regarding corporate social responsibility. The program will feature our own Sarah Altschuller, the only US lawyer ranked by Chambers Global for business and human rights. Sarah is a true expert, and we can all learn from her expertise. More
Spotify made a big splash with its novel approach to “going public.” Rather than following the tried-and-true path of an initial public offering – where the issuer sells stock to the public through underwriters – Spotify pursued a “direct listing.” But did it really do anything different?
While it is true that Spotify did not directly sell any stock to the public, it did file a traditional form of registration statement,… More
In a series of recent public statements (most recently in February 2018), the SEC has encouraged companies to pursue relief under Rule 3-13 of Regulation S-X—the regulation that specifies the form and content of financial statements required by public companies. Pursuant to Rule 3-13, the SEC Staff may permit the omission of financial statements that are otherwise required under Reg S-X or the substitution of such required financial statements with other statements of comparable character.… More