Recent headlines have been filled with the news from Davos that effective July 1, 2020 Goldman Sachs will not underwrite companies that do not have at least one diverse board member. They plan to raise the target to two diverse board members starting in 2021. With four seats on its eleven member board held by women and a Lead Director who is Nigerian, Goldman is an example of board diversity and its Chairman and CEO,… More
The holidays came early in Washington, as on December 18, 2019, the Securities and Exchange Commission (SEC) gave investors the gift of a proposal to expand the definitions of “accredited investor” and “qualified institutional buyer”. This gift has been under consideration for years, as the SEC published a staff report examining the accredited investor definition in 2015 and a broader concept release on the same topic earlier in 2019. … More
Yesterday, the full House of Representatives approved H.R. 2534, otherwise known as the Insider Trading Prohibition Act. If passed by the Senate and signed by the President, this legislation would mark an important milestone in insider trading jurisprudence. For decades, the Securities and Exchange Commission (“SEC”) and Department of Justice (“DOJ”) have pursued insider trading violations through general anti-fraud provisions, which has resulted in extensive judge-made law and ambiguity as to when actors will be held liable for insider trading. … More
On November 6, 2019, the SEC Division of Enforcement published its annual report for fiscal year 2019. The report provides valuable insight, not only as to the Division’s performance over the past year, but also about its current priorities and where it will be focused in the near-term future. Overall, Enforcement’s program since 2017, when SEC Chairman Jay Clayton assumed leadership of the agency, has been shaped by five “core principles”: (1) focus on the retail investor;… More
Last week Institutional Shareholder Services updated its proxy voting guidelines for annual shareholder meetings to be held on or after February 1, 2020. The updates take a major step forward to advocate greater gender diversity on public company boards, express fresh opposition to super-voting shares and evergreen plan provisions, enhance support for independent board chairs, and make other important modifications.
- Gender diversity: As it signaled last year,…
WeWork, rebranded as The We Company earlier this year, officially withdrew its IPO registration statement on September 30, 2019. The company has had an unusually rocky ride from its August 14, 2019 public filing to an outcome that few, if any, would have predicted from one of the most high profile unicorns to seek capital in the public market. As the company moves forward with new co-CEOs, the abandoned (or delayed) IPO serves as a case study of the issues that private companies face under the scrutiny of regulators and public investors. … More
The SEC’s Division of Corporation Finance recently provided helpful clarity regarding the exclusion of certain shareholder proposals under Rule 14a-8. The guidance, Staff Legal Bulletin No. 14K, relates to the “ordinary business” exception and the proof of ownership requirement of the rule.
By way of background, Rule 14a-8 permits shareholders of a public company to submit proposals for a stockholder vote, and the company is generally required to include those proposals unless a specific exception applies.… More
The Securities and Exchange Commission announced recently that it is adopting new Rule 163B to allow all issuers to “Test-the-Waters” with potential investors whom they reasonably believe are Qualified Institutional Buyers (QIBs) and/or Institutional Accredited Investors (IAIs). In 2012, the JOBS Act allowed Emerging Growth Companies (EGCs) to engage in Testing-the-Waters discussions, but companies either too large or too seasoned to qualify as EGCs did not receive this benefit.… More
Issuers would be well-advised to take note of the SEC’s recently announced $200,000 settlement of an enforcement action brought against Florida-based TherapeuticsMD, Inc., less for the legal issues involved, which present a very straightforward application of Regulation FD, than as a reminder that regulators regularly review analysts’ reports and will not hesitate to investigate and prosecute apparent violations of disclosure rules.
The SEC’s enforcement action focused on two occasions during the summer of 2017 on which TherapeuticsMD executives provided non-public information to sell-side analysts regarding the status of the company’s efforts to achieve FDA approval for its then-leading drug candidate. … More
In 2018, the SEC adopted rules requiring the use of Inline eXtensible Business Reporting Language, often referred to as XBRL, for filings including financial statement information and fund risk/return summary information. The Inline XBRL requirements recently became effective (in connection with filing a Form 10-Q for a fiscal period ending on or after June 15, 2019) for operating companies that are large accelerated filers that prepare their financial statements in accordance with U.S.… More