SEC Amends “Accelerated Filer” and “Large Accelerated Filer” Definitions

On March 12, 2020, the SEC announced that it has adopted amendments to the “accelerated filer” and “large accelerated filer” definitions to “more appropriately tailor the types of issuers that are included in the definitions, thereby reducing unnecessary burdens and compliance costs for certain smaller issuers while maintaining investor protections.”

The amendments will exempt smaller reporting companies (SRCs) with less than $100 million in annual revenues from the requirement that their outside auditors attest to,… More

SEC Enforcement and COVID-19: Disclosure and Insider Trading Risks for Issuers

In response to the widespread outbreak of the COVID-19 pandemic in the United States, the U.S. Securities and Exchange Commission (SEC) has granted some flexibility to issuers with respect to their obligations to file periodic reports and deliver proxy and information statements to shareholders under the Securities Exchange Act.  On March 4, the SEC issued an exemptive order granting affected public companies, subject to certain conditions, an additional 45 days to file or deliver those materials. … More

SEC Proposes Amendments to Offering Exemptions

On March 4, 2020, the SEC proposed amendments to existing exemptions from the registration requirements under the Securities Act of 1933 to simplify, harmonize, and improve the existing regulatory framework and to promote capital formation while preserving or enhancing important investor protections.  Promoting capital formation continues to be a primary object of the SEC, as evidenced by the previously proposed amendments to the “accredited investor” definition. (See our IPO,… More

Signing up for a Spin Class?

Recent Amendments to FINRA Rules 5130 and 5131

While many people extol the virtues of a good spin class (particularly in January, following New Year’s resolutions), in the context of Initial Public Offerings, “spinning” has a severely negative connotation.  Spinning was a practice where a bank held back shares of a popular initial public offering to allocate to an executive officer or director of a current or potential investment banking client of the bank instead of placing those shares with investors through the standard public offering allocation process. … More

And the investment banks shall lead the way?

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

Highlights of the Recent SEC Proposal to Update the Accredited Investor Definition

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

House of Representatives Votes to Codify Insider Trading Laws

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

SEC Division of Enforcement Issues 2019 Annual Report

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

New ISS voting guidelines ramp up expectations for public companies

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,…
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Let’s talk about gun jumping . . .

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