SEC staff updates guidance on shareholder proposals

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

Everyone into the Pool!

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

I always feel like somebody’s watching me. . .

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

Guidance regarding implementation of Inline XBRL rules

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

SEC proposes rule changes intended to streamline disclosures of business operations, risk factors and legal proceedings

The SEC recently proposed revisions to Regulation S-K to streamline public companies’ disclosures of their business operations, risk factors and legal proceedings.  The proposed revisions affect Items 101(a) and (c), 103 and 105 of Regulation S-K.

Among other changes, the proposed rules would revise the requirements related to the general business description by adopting:

  • a more principles-based approach that will require each company to address matters material to its business,…
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SEC proposes amendments to “accelerated filer” and “large accelerated filer” definitions

Yesterday, the SEC announced that it is proposing amendments to the “accelerated filer” and “large accelerated filer” definitions to “reduce costs without harming investors for certain smaller public companies and, importantly, encourage more companies to enter our public markets.”

Last summer, the SEC adopted amendments to expand the number of smaller reporting companies that qualify for scaled disclosure.  Among the adopted amendments was an increase in the public float threshold for smaller reporting companies from $75 million to $250 million. … More

DOJ Criminal Division Publishes Guidance on Evaluating Corporate Compliance Programs

Last week, the U.S. Department of Justice (DOJ) Criminal Division released revised guidance on the “Evaluation of Corporate Compliance Programs.”  This latest guidance is important not only to help benchmark existing compliance programs but also to understand what DOJ will look for when making critical decisions affecting a company under investigation.  DOJ’s Fraud Section had released a prior version of this guidance in February 2017.  The 2019 guidance is notable in several respects,… More

SEC Announces Meeting to Consider Amendments to “Accelerated Filer” and “Large Accelerated Filer” Definitions

SEC announced amendmentsYesterday, the SEC announced that it would hold a public meeting on Thursday, May 9, 2019 to consider whether to propose amendments to the “accelerated filer” and “large accelerated filer” definitions to promote capital formation for smaller reporting companies.

Last summer, the SEC adopted amendments to expand the number of smaller reporting companies that qualify for scaled disclosure.  Among the adopted amendments was an increase in the public float threshold for smaller reporting companies from $75 million to $250 million. … More

UPDATE: SEC Adopts Streamlined Process for CTR Extensions

Just hours after our recent blog post regarding the need to use the traditional process for CTR extensions, the SEC announced the adoption of a new streamlined process for CTR extensions.

This streamlined process requires the submission of a one-page application by which a company can affirm that the most recently considered CTR application continues to be true, complete and accurate regarding the information for which the company continues to seek confidential treatment.  … More

Trap for the unwary: you still need to renew confidential treatment requests filed under the old rules

A confidential treatment order for information redacted from an exhibit is about to expire. Under SEC rules that took effect last week (see our prior blog posts here  and here), public companies can now redact the same type of information without prior SEC review, so the company doesn’t have to do anything, right?

Wrong.  The SEC has confirmed that its new rules for the redaction of confidential information from certain exhibits do not automatically extend orders for confidential treatment granted under the traditional application process.… More