To prosper, companies must be able to raise money when necessary in a timely and efficient manner, even when sources of capital are tight. Meanwhile, ever-changing laws and regulations require executives to reassess both enterprise and personal risks associated with many of their decisions and activities.
Publications
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11.02.2023SB 54 Increases Transparency in California’s Venture Capital IndustryUpdatesCalifornia Governor Gavin Newsom signed Senate Bill 54 into law on October 8, 2023, to take effect March 1, 2025, for all investments made during calendar year 2024. The law will require “covered entities” to report the demographic information of “founding team members” of all companies in which the covered entity has invested.
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02.02.2023New Legislation Affects Antitrust Venue and Foreign Subsidy DisclosuresUpdatesThe new Consolidated Appropriations Act, 2023 includes the Merger Filing Fee Modernization Act of 2022, which amends the amounts and tiers for Hart-Scott-Rodino Antitrust Improvements Act of 1976 filing fees as discussed in a prior Update. It also includes two important amendments to antitrust laws.
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01.30.20232023 Updates to HSR and Interlocking Directorate ThresholdsUpdates
The FTC recently announced its annual adjustments to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and interlocking directorate thresholds. Notably, the minimum HSR size-of-transaction threshold has increased from $101 million to $111.4 million. There is a new filing fee schedule resulting from the enactment of the Merger Filing Fee Modernization Act of 2022, which will significantly increase filing fees for transactions valued in excess of $500 million and decrease them for transactions valued under $161.5 million. The new HSR jurisdictional and filing fee thresholds will be effective as of February 27, 2023, while the revised interlocking directorate thresholds are already in effect.
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09.12.2022SEC's Proposed SPAC Rules & Market ReactionArticlesOn March 30, 2022, the Securities and Exchange Commission (SEC) proposed rules governing special purpose acquisition companies (SPACs).
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02.01.20222022 Cybersecurity Issues and Recommendations for ERISA Plan FiduciariesUpdatesNew cybersecurity developments and observations ... warrant prompt consideration by plan sponsors and other fiduciaries of employee benefit plans subject to ERISA.
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01.26.2022Chancery Court Applies Onerous Entire Fairness Standard in First SPAC-Related DecisionUpdatesThe Delaware Chancery Court recently sustained the legal viability of a putative shareholder class action brought against a SPAC’s directors, officers, controlling shareholder, and financial advisor based on an allegedly false and misleading proxy statement.
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01.25.2022FTC Announces 2022 Changes to HSR and Clayton Act ThresholdsUpdatesThe Federal Trade Commission recently announced that the reporting thresholds under Section 7A of the Clayton Act ... will be increased.
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12.09.2021The Infrastructure Investment and Jobs Act Creates a Network of Electric Vehicle Charging Stations, but Issues RemainUpdatesThe Infrastructure Investment and Jobs Act, signed into law by President Biden on November 15, 2021, has the potential to transform the surface transportation sector in the United States.
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2021The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and Executives - Sixth EditionLawyer PublicationsOur sixth edition of The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and Executives, provides a “plain English” guide for directors, officers, and other executives seeking to familiarize themselves with legal and other board and management issues facing public or soon-to-be-public companies.
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11.04.2021The Anti-Money Laundering Act of 2020: The Remarkable Expansion of the U.S. Government’s Subpoena Power Over Foreign Financial InstitutionsUpdatesOn New Year’s Day 2021, Congress passed the Anti-Money Laundering Act of 2020 (AMLA).
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10.04.2021AMLA 2020 Series Part 3: FinCEN Issues Notice of Proposed AML Rules for Antiquities DealersUpdatesOn New Year’s Day 2021, Congress passed the Anti-Money Laundering Act of 2020 (AMLA 2020).
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07.14.2021AMLA 2020 Series Part 1: New and Expansive Beneficial Ownership Reporting RequirementsUpdates
This first substantive installment in our multipart series addresses arguably the most significant implication of AMLA 2020: a new and expansive requirement to disclose corporate beneficial ownership, set out by the Corporate Transparency Act.
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07.14.2021Oregon OSHA Issues Emergency Heat Safety RulesUpdatesOn July 8, 2021, Oregon Occupational Safety and Health Administration (OSHA) adopted emergency rules implementing requirements for employers to protect workers from the dangers of high and extreme heat, including providing access to shade and cool water, cool-down breaks, training, and other measures.
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06.28.2021Supreme Court: “Generic Nature” of Misstatements in Securities Action May Help Defendants Defeat Class CertificationUpdatesIn a significant decision on securities class actions, the Supreme Court last week held that the generic nature of alleged misrepresentations will often be “important evidence of a lack of price impact” that can be used by defendants to defeat class certification
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04.12.2021The Anti-Money Laundering Act of 2020: A Survey of Key Provisions and Practice TakeawaysUpdatesOn New Year’s Day 2021, Congress overrode a presidential veto to pass the Anti-Money Laundering Act of 2020 (AMLA 2020), which amends and modernizes the Bank Secrecy Act (BSA).
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03.15.2021Struggling Multiemployer Pension Plans Receive a Lifeline Under the American Rescue Plan Act of 2021UpdatesThis update examines in detail each form of multiemployer pension plan relief under the ARPA, as well as potential impacts of the ARPA on employers participating in underfunded multiemployer pension plans.
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03.12.2021FTC Announces 2021 Changes to HSR and Clayton Act Thresholds, Temporarily Suspends Early TerminationUpdatesThe U.S. Federal Trade Commission (FTC) recently announced reporting thresholds under Section 7A of the Clayton Act, known as the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 (the Act), will decrease.
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03.03.2021IRS Clarifies Extended Cafeteria Plan ReliefUpdatesMuch of the previous relief that had been granted to cafeteria plans during the COVID-19 pandemic was set to expire after 2020.
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02.08.2021DOJ’s First False Claims Act Settlement Against PPP Borrower Signals Robust Fraud Enforcement AheadUpdates
As the government revives its Paycheck Protection Program (PPP) with hundreds of billions of dollars in additional loans available to small businesses, there are fresh signs that government fraud investigations and whistleblower litigation related to the loan program are ramping up.
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02.03.2021Deadlines Approaching for COVID-19 Business Interruption Claims: Don’t Forfeit Coverage!UpdatesPolicyholders with COVID-19 insurance claims may not be aware that insurance policies limit the time they have to bring a lawsuit against their insurance company.
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01.12.2021Portal Opens for New PPP Loans With New SBA Guidance and Application FormsUpdatesThe Small Business Administration (SBA) has announced that they will reopen their portal for Paycheck Protection Program (PPP) loans for eligible borrowers beginning the week of January 11, 2021, after being shut down since August 8, 2020, when the prior congressional authorization for PPP loans expired.
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12.24.2020Another Round of PPP Loans Approved by Congress, With Yet Additional Changes to the ProgramUpdatesThe U.S. Senate and House of Representatives, on December 21, 2020, approved H.R. 133, referred to as the “Consolidated Appropriations Act, 2021.”
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12.09.2020Employee Benefit Plan Developments—2020 Year in ReviewUpdatesEmployee benefits professionals have faced many challenges in 2020.
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12.07.2020Preparing for the 2021 Public Company Reporting SeasonUpdatesIn anticipation of the upcoming reporting season, we highlight rule changes, guidance, and trends for public companies to consider in preparing annual report and proxy statement disclosures in 2021.
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12.02.2020
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11.12.2020SEC Makes it Easier to Fundraise—Streamlines Exempt Offering RulesUpdatesThe U.S. Securities and Exchange Commission (SEC) recently announced that it adopted final rules to simplify the “patchwork” framework for exempt offerings under the Securities Act of 1933.
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10.06.2020SBA Announces New Guidance on Consent Requirements for Changes of Ownership of PPP Loan BorrowersUpdatesThe U.S. Small Business Administration (SBA) released a procedural notice (the Notice) on October 2, 2020, that describes the process and requirements that Paycheck Protection Program (PPP) borrowers and lenders must follow when ownership of the PPP borrower is changing.
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09.29.2020SEC Adopts Amendments to Modernize Shareholder Proposal RuleUpdates
The U.S. Securities and Exchange Commission on September 23, 2020, adopted final amendments to Rule 14a-8, which governs the process for shareholder proposals submitted for inclusion in a company’s proxy statement.
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09.17.2020Is Your Board Gender Diverse Yet? Washington Public Companies Reminded of Upcoming Board Diversity RequirementUpdatesWhen the Women on Corporate Boards Act (Section 1 of Substitute Senate Bill 6037) became effective on June 11, 2020, Washington became the second state (after California) to affirmatively address gender diversity on public company boards of directors in its corporate statute.
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09.02.2020SEC Modernizes Reg S-K Disclosure Rules for Business, Legal Proceedings, and Risk FactorsUpdatesThe U.S. Securities and Exchange Commission on August 26, 2020, approved the first significant amendments to the rules governing the description of business, legal proceedings, and risk factor disclosures in SEC filings in over thirty years.
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08.31.2020SEC Adopts Amendments to Expand Accredited Investor DefinitionUpdatesThe U.S. Securities and Exchange Commission adopted amendments on August 26, 2020, to update the definition of “accredited investor” in Rule 501(a) of the Securities Act of 1933.
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08.18.2020PIPE Transactions: Key Considerations for Issuers and InvestorsUpdatesDuring uncertain times, public companies may find themselves in need of additional capital, but a traditional follow-on underwritten public offering may be out of reach or considered too risky.
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08.11.2020SEC Amends Proxy Rules Relating to Proxy Advisers and Supplements Proxy Voting Guidance for Investment AdvisersUpdatesThe U.S. Securities and Exchange Commission on July 22, 2020, adopted final amendments to its proxy solicitation rules to codify the SEC’s longstanding view that proxy voting advice generally constitutes a solicitation within the meaning of the federal proxy rules and is subject to anti-fraud rules.
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08.10.2020Investor Focus on SustainabilityUpdatesCompanies across industries—from retail to high tech to financial services—are touting their sustainability initiatives to attract and retain customers and employees.
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08.10.2020New PPP Loan Forgiveness Guidance Issued in Advance of Opening of SBA’s Loan Forgiveness PortalUpdatesWhile debates in Congress continue regarding extending or providing additional COVID-19 relief legislation, the Small Business Administration (SBA), U.S. Department of Treasury (Treasury), and lenders under the Paycheck Protection Program (PPP) are preparing for the next wave of activity for PPP loans.
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07.22.2020Hart-Scott-Rodino Annual Report for FY 2019: Decrease in Second Requests Leading to Challenged DealsUpdates
The Hart-Scott-Rodino Annual Report Fiscal Year 2019, published July 8, 2020, by the Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ), summarizes FTC and DOJ actions conducted under the Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act, in fiscal year 2019, the period from October 1, 2018, through September 30, 2019.
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06.18.2020SBA Releases New PPP Loan Forgiveness Application Forms Paycheck Protection Program Flexibility Act GuidanceUpdatesThe Small Business Administration (SBA), on June 16, 2020, released new loan forgiveness application forms and corresponding instructions for borrowers seeking forgiveness of their Paycheck Protection Program (PPP) loans.
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06.09.2020DOJ Refines Guidance on Effective Corporate ComplianceUpdatesThe U.S. Department of Justice on June 1, 2020, released another update to its “Evaluation of Corporate Compliance Programs” (the 2020 Update).
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06.09.2020The Federal Reserve’s Main Street Lending Program: What Borrowers Need to Know (Updated June 9, 2020)Updates
This update amends our prior publication on June 5, 2020, and contains new information based on additional guidance provided by the Federal Reserve on June 8, 2020.
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06.08.2020Opportunity to Address Evolving Standards and Risk Management in the Pandemic AftermathUpdatesAs the United States and the rest of the world move toward reopening economies, businesses will begin to shift from survival mode to “back to business.”
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06.05.2020The Federal Reserve’s Main Street Lending Program: What Borrowers Need to KnowUpdates
This update amends our prior publication on May 4, 2020, titled Federal Reserve Announces Changes to Main Street Lending Program and contains new information based on additional guidance provided by the Federal Reserve on May 27, 2020.
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06.01.2020SEC Updates Rules for Financial Statements for M&AUpdates
The U.S. Securities and Exchange Commission on May 21, 2020, adopted amendments to Regulation S-X (Reg S-X) for financial statements related to acquisitions and dispositions of businesses.
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05.29.2020Proposed Legislation May Extend Period for PPP Loan Forgiveness—Meanwhile, SBA Releases Yet More GuidanceUpdatesThe U.S. House of Representatives, on May 28, 2020, passed with bipartisan support H.R. 6886, referred to as the Paycheck Protection Program Flexibility Act of 2020.
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05.27.2020DOL Finalizes Notice and Access Safe Harbor for Electronic Delivery of Retirement Plan Participant CommunicationsUpdatesThe U.S. Department of Labor (DOL) has issued a final rule establishing a new “safe harbor” method for satisfying ERISA and DOL’s requirements for electronic distribution of certain ERISA-governed retirement plan documents.
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05.21.2020IRS Notices Provide COVID-19 Relief Covering Section 125 Cafeteria Plans and Flexible Spending Account Benefit PlansUpdatesMany employers have sought to leverage or make changes to their employer-sponsored benefits to address economic and health-related burdens faced by their employees during the COVID-19 pandemic.
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05.08.2020US Department of Labor Issues Updated COBRA Model Notices and Related FAQSUpdatesThe U.S. Department of Labor (DOL) issued revised model general and election notices on Friday, May 1, 2020.
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05.01.2020Conflicted Transactions: Cleansing Process Only Effective if Procedures Are Rigorously FollowedUpdatesIn today’s difficult economic environment, many companies—including those in the portfolios of private equity and venture capital funds—are struggling financially. For some, a transaction in which a private equity sponsor or a venture capital investor has a significant interest may provide a lifeline for the troubled company.
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03.24.2020Board Oversight Is Critical in Crisis ManagementUpdatesThe coronavirus (COVID-19) outbreak and its possible impacts on corporations highlight the importance of the board of directors’ oversight function in times of crisis.
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03.24.2020Public Disclosures and Securities Compliance to Address in a Time of CrisisUpdatesThe immediate and possibly severe financial and business impacts of the coronavirus (COVID-19) outbreak have resulted in public companies closely reviewing their public disclosures and related securities compliance.
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03.23.2020Accessing and Maintaining Liquidity During the COVID-19 PandemicUpdatesCompanies across all industries are preparing to face the widespread economic effects of the coronavirus (COVID-19) pandemic. Making sure companies have access to liquidity during this time will be a key strategy in addressing the challenges posed by the pandemic, particularly as COVID-19 continues to disrupt financial markets and thrust economic conditions into greater uncertainty.
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03.20.2020COVID-19 Exclusions in Representation and Warranty Insurance Policies for M&A TransactionsUpdates
In response to the rapidly changing and unpredictable business environment resulting from the novel coronavirus (COVID-19) outbreak, underwriters of representation and warranty insurance (RWI) policies are introducing broad exclusions from business interruption or business downturn losses arising out of or relating to COVID-19, and in some cases, any related government or regulatory response.
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03.20.2020FTC Implements Temporary Hart-Scott-Rodino E-Filing System, Suspends Early Termination ProgramUpdatesDue to the developing coronavirus (COVID-19) pandemic, the Federal Trade Commission (FTC) has implemented a temporary e-filing system for the submission of filings under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 and suspended its program that allowed parties to request (and frequently be granted) early termination of the HSR waiting period.
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03.13.2020COVID-19: Public Company Annual Meeting ConsiderationsUpdates
As the effects of the coronavirus (COVID-19) continue to develop, public companies are faced with a variety of concerns, including the impact “social distancing” recommendations and restrictions will have on annual shareholder meetings.
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03.03.2020“See Something, Say Something”: Prompt Reporting of Criminal Antitrust Violations Is CriticalUpdates
When the DOJ is deciding whether to charge a company with a criminal antitrust violation, or agreeing to a deferred prosecution agreement (DPA), the effectiveness of a company’s antitrust compliance program is only one factor.
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02.27.2020“Reasonableness” Is in the Eye of the Beholder: Vague Contracts Clauses Invite LitigationUpdatesSchick, the shaving product company, recently announced it was abandoning its proposed $1.4 billion acquisition of rival startup Harry’s Razors
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01.30.2020FTC Announces 2020 Increases to HSR and Clayton Act ThresholdsUpdatesThe Federal Trade Commission (FTC) announced on January 28, 2020, the reporting thresholds under Section 7A of the Clayton Act, known as the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 (the Act), will be increased.
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12.10.2019Preparing for the 2020 Public Company Reporting SeasonUpdates
The U.S. Securities and Exchange Commission (SEC) issued rule updates and guidance in 2019 that are intended to simplify certain public reporting requirements, clarify the staff’s expectations with respect to no-action relief for certain shareholder proposals and significantly revise the staff’s process for responding to those no-action requests. In anticipation of the upcoming reporting season, we highlight rule changes, guidance and trends for public companies to consider in preparing annual report and proxy statement disclosures in 2020.
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11.14.2019US Department of Labor Proposes New “Notice and Access” Electronic Delivery Safe HarborUpdatesThe U.S. Department of Labor (DOL) issued proposed regulations on October 23, 2019, providing for a new electronic-delivery safe harbor applicable to certain required disclosures for ERISA-governed retirement plans.
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11.07.2019SEC Staff Provides Additional Guidance on Shareholder ProposalsUpdates
The U.S. Securities and Exchange Commission (SEC) has issued several important recent updates regarding shareholder proposals and the related no-action request process for companies to consider ahead of the 2019-2020 proxy season.
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10.23.2019IRS Finalizes Changes to 401(k) Hardship Distribution RulesUpdatesThe IRS issued final regulations on September 19, 2019, easing the 401(k) hardship distribution rules.
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10.22.2019The Ninth Circuit Abandons 35 Years of Precedent by Enforcing Arbitration Clause in ERISA Benefit PlanUpdatesThirty-five years after deciding that arbitration clauses in employee benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) were unenforceable, the U.S. Court of Appeals for the Ninth Circuit has reversed itself by approving the use of mandatory arbitration clauses and class action waivers in ERISA-governed benefit plans in Dorman v. Charles Schwab Corp.
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08.20.20192019 Corporate Governance Hot TopicsUpdates
The following update highlights recent corporate governance hot topics and trends for directors of public companies.
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04.29.2019SEC’s FAST Act Disclosure Simplification Amendments Effective May 2UpdatesThe Securities and Exchange Commission (SEC) recently adopted rule amendments to modernize and simplify certain disclosure requirements in Regulation S-K and related SEC rules and forms.
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03.04.2019FTC Announces 2019 Increases to HSR and Clayton Act ThresholdsUpdatesThe FTC announced on February 15, 2019, the reporting thresholds under Section 7A of the Clayton Act , known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976, will be increased.
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12.11.2018Preparing for the 2019 Public Company Reporting SeasonUpdatesDuring 2018, the SEC issued rule updates and guidance that are intended to ease certain public reporting requirements and clarify the SEC’s position with respect to the shareholder proposal process. While the SEC is taking steps aimed at decreasing public company disclosure burdens, the investor community is sharpening its focus on public company actions and reporting on environmental, social and governance issues. In anticipation of the upcoming reporting season, we highlight rule changes, guidance and trends for public companies to consider in preparing annual report and proxy disclosures in 2019.
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10.24.2018SEC 21(a) Report Warns Public Company Email Scam Victims of Bigger Problems Than Stolen MoneyUpdatesKnown by many names, including business email compromise fraud, CEO or CFO fraud, impersonation attacks, or “Man-in-the-Email” scams, cyber-related frauds involving spoofed or otherwise compromised business electronic communications continue to be an increasingly pervasive threat to businesses of all sizes, including public companies.
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10.04.2018INSIGHT: Ten Tips for Investor Relations WebsitesArticlesPublic companies use their investor relations websites to conveniently disseminate important corporate news and information, and many investors and other interested parties in turn rely on those websites as a primary source of such news and information. To continue reading the full article, click here.
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09.13.2018Federal District Court Upholds Securities Indictment for ICOs but Defers Final Howey Determination in United States v. ZaslavskiyUpdatesIn what is believed to be the first criminal case examining whether so-called “initial coin offerings” (ICOs) are securities under U.S. law, Judge Raymond J. Dearie of the Eastern District of New York refused to dismiss the indictment against Maksim Zaslavskiy for a deceptive virtual currency scheme and fraudulent ICOs by REcoin Diamond Reserve Club.
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08.13.2018Hart-Scott-Rodino Annual Report for Fiscal Year 2017: Increases in Filings, Decreases in Second Requests and Challenged DealsUpdates
The Hart-Scott-Rodino Annual Report Fiscal Year 2017, published earlier this year by the FTC and the DOJ, summarizes FTC and DOJ actions conducted under the Hart-Scott-Rodino Antitrust Improvements Act in fiscal year 2017.
This update was quoted in deallawyers.com "Antitrust: HSR Second Requests & Deal Challenges Decline in 2017," on 09.05.2018. -
07.19.2018A New Virtual (Meeting) Reality for Washington CorporationsUpdatesAmendments to the Washington Business Corporation Act (WBCA) that allow Washington corporations to hold “virtual” shareholder meetings became effective in June 2018.
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04.27.2018Ninth Circuit Establishes Negligence Standard for Section 14(e) Claims in Circuit-Splitting DecisionUpdatesRejecting the analysis of every other federal appellate court to consider the issue, the Ninth Circuit recently held that most claims filed under Section 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(e), do not require a showing of scienter.
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04.27.2018The Delicate Task: A Practice Guide to Investigating Allegations of Company-Internal MisconductArticles
This article surveys key investigation-related issues important to companies, including why investigations matter; balancing investigative objectives against business realities; key investigative steps (and pitfalls); how to avoid the "runaway investigation"; how to share investigative findings; and how to construct an effective remediation plan.
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03.22.2018U.S. Supreme Court Confirms State Courts Can Resolve Covered 1933 Act Class ActionsUpdatesOn Tuesday, a unanimous U.S. Supreme Court held that state courts have jurisdiction to hear “covered” class-action claims under the Securities Act of 1933, and that defendants may not remove such claims to federal court.
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03.08.2018FCPA Enforcement and Corporate Compliance: 3 Things to Know for 2018UpdatesLast year saw continued aggressive Foreign Corrupt Practices Act enforcement by the U.S. Department of Justice and all indicators are that investigations are not going to slow down in 2018.
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02.28.2018SEC Speaks 2018: Flexibility and Cooperation on Both SidesUpdatesAt this year’s PLI “SEC Speaks” conference held February 22-23, 2018, in Washington, D.C., the U. S. Securities and Exchange Commission’s senior leadership showcased its 2017 accomplishments, and previewed priorities for 2018 and beyond.
Highlighted in Law360's: "In Case you Missed It: Hottest Firms And Stories On Law360," on 03.02.2018. -
02.26.2018U.S. Supreme Court Refuses to Expand Definition of “Whistleblower” Beyond Express Definition in StatuteUpdatesThe United States Supreme Court last week held in Digital Realty Trust, Inc. v. Somers that when a whistleblower reports suspected violations of securities laws internally, but not to the SEC, the whistleblower is not entitled to the protections of the Dodd-Frank Act’s anti-retaliation provisions.
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02.23.2018SEC on Cybersecurity: Jay Clayton’s “Light Touch”UpdatesThe U.S. Securities and Exchange Commission (SEC) issued its first formal interpretative release on public company disclosure obligations relating to cybersecurity since the SEC Division of Corporation Finance’s guidance in 2011.
This update was republished in Bloomberg BNA's White Collar Crime Report on 03.16.2018, "New SEC Cybersecurity Guidance Reflects Clayton's 'Light Touch'," and Bloomberg's Big Law Business on 03.13.2018, "SEC on Cybersecurity: Jay Clayton’s “Light Touch." -
01.30.2018FTC Increases HSR and Clayton Act ThresholdsUpdatesThe Federal Trade Commission last week announced that the reporting thresholds under Section 7A of the Clayton Act, known as the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, will be increased.
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01.26.2018Hart-Scott-Rodino Annual Report for Fiscal Year 2016: Increases in Filings and Second Requests, Impact on Executive Stock Options/Restricted Stock AwardsUpdates
The Hart-Scott-Rodino Annual Report Fiscal Year 2016 , published last year by the FTC and the DOJ, summarizes FTC and DOJ actions conducted under the HSR Act in fiscal year 2016, the period from October 1, 2015, through September 30, 2016.
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01.2018Top 10 Practice Tips: Responding to SEC Comment LettersArticles
Lexis Practice Advisor
This practice note outlines 10 practice points for public companies to consider when responding to comment letters from the Securities and Exchange Commission (SEC). -
12.12.2017Preparing for the 2018 Public Company Reporting SeasonUpdates
In anticipation of the upcoming annual report and proxy season, we are highlighting new requirements and trends for public companies in 2018.
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11.02.2017Ninth Circuit Trims PSLRA Safe Harbor’s Protection for Forward-Looking StatementsUpdates
A recent decision of the U.S. Court of Appeals for the Ninth Circuit cut back on the protections afforded by the safe-harbor provision of the Private Securities Litigation Reform Act of 1995 for public companies whose forward-looking statements are alleged to be false or misleading.
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11.2017/12.2017‘Is That a Target on Your Back?’: Board Cybersecurity Oversight Duty After the Target SettlementArticles
The Corporate Governance Advisor, Volume 25, Number 6
In the wake of the onerous settlement imposed on Target Corporation arising from its data breach, the cyberattack against Equifax and its aftermath, the U.S. Securities and Exchange Commission’s (SEC’s) own questionable handling of its data breach, and ongoing data breach lawsuits against directors, public company directors are rightfully concerned about their cybersecurity oversight duty. -
10.03.2017SEC Issues New Guidance to Help Companies Prepare CEO Pay Ratio DisclosuresUpdates
The SEC recently issued new guidance to help companies prepare their pay ratio disclosures that provides some relief for companies—and further validates that these rules are highly unlikely to be deferred or reversed prior to the 2018 proxy season.
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09.07.2017In re Martha Stewart Living Omnimedia, Inc. Stockholder Litigation: MFW Provides Recipe for Protecting One-Sided Controller TransactionsUpdatesIn its opinion in In re Martha Stewart Living Omnimedia, Inc. Stockholder Litigation, issued in August 2017, the Delaware Chancery Court addressed a question left open under Kahn v. M&F Worldwide.
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08.18.2017Get Ready for Mandatory SEC Exhibit Hyperlinks Beginning September 1UpdatesThe Securities and Exchange Commission’s final rules requiring hyperlinking of exhibits to SEC filings will be effective for most public companies on September 1, 2017.
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07.10.2017SCOTUS Upholds Strict Statute of Repose on Federal Section 11 Securities ClaimsUpdatesIn a 5-4 decision in California Public Employees’ Retirement System (CalPERS) v. ANZ Securities, Inc., et al. (No. 16-373), 582 U.S. ___ (2017), the U.S. Supreme Court upheld, at the end of last month, a U.S. Court of Appeals for the Second Circuit decision dismissing as untimely a lawsuit filed by CalPERS against underwriters of public securities offerings by global investment bank Lehman Brothers.
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06.13.2017U.S. Agencies Step Up Insider Trading Enforcement Against Foreign Nationals, Particularly Chinese TradersUpdatesInvestigations and enforcement actions by the SEC and DOJ targeting potential illegal insider trading by foreign nationals, particularly by those in China, are increasing significantly.
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02.28.20172017 SEC Speaks: Changing Priorities Amid Leadership TransitionsUpdatesAt the annual “SEC Speaks” conference held February 23-24, 2017, in Washington, D.C., the U.S. Securities and Exchange Commission’s senior leadership reviewed the agency’s efforts in 2016 and previewed future trends.
This update was also published in Law360 on 02.27.2017, "SEC Speaks '17: Changing Priorities Amid Agency Transitions." -
02.10.2017 (Revised)Recent Whistleblower Protection Actions by SEC and Congress Add Risk to Severance AgreementsUpdatesThe SEC’s recent enforcement actions addressing severance agreement language that may violate whistleblower protections under the federal securities laws were the subject of an article by Perkins Coie attorneys Luis Mejia, Stewart Landefeld, Eric DeJong and Ann Marie Painter.
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01.31.2017FTC Increases HSR and Clayton Act ThresholdsUpdatesThe Federal Trade Commission (FTC) recently announced that the reporting thresholds under Section 7A of the Clayton Act, known as the Hart-Scott-Rodino (H‑S‑R) Antitrust Improvements Act of 1976, will be increased.
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01.19.2017CFIUS: President-elect Trump’s Potential Big Stick for China and Foreign TradeUpdatesOn the campaign trail, President-elect Trump adopted a contentious approach towards foreign trade, focusing on Chinese “theft of American trade secrets” and suggesting, at times, potential isolationism for U.S. businesses.
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01.04.2017India Amends Capital Gains Tax Treaty With SingaporeUpdatesThe Government of India amended its double taxation avoidance agreement (DTAA) with Singapore on December 30, 2016.
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2016The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and Executives - Fifth EditionLawyer PublicationsOur fifth edition of The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and Executives, provides a “plain English” guide for directors, officers and other executives seeking to familiarize themselves with legal and other board and management issues facing public or soon-to-be-public companies.
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12.01.2016Preparing for the 2017 Public Company Reporting SeasonUpdates
In anticipation of the upcoming annual report and proxy season, we are highlighting new requirements and trends that may impact public companies in 2017.
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11.28.2016What Employers Should Know About Texas Judge Halting New FLSA RegulationsUpdatesLast week, the U.S. Department of Labor’s pending regulation raising the minimum salary levels for “exempt” white collar employees was blocked by a federal district court judge in the Eastern District of Texas.
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11.07.2016Changing Proxy Rules: SEC Proposes to Require Universal Proxy CardsUpdatesThe SEC, by a two-to-one vote on October 26, 2016, proposed amendments to its proxy rules to require universal proxy cards in contested director elections at annual meetings of listed U.S. public companies.
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2016The IPO Handbook
Second Edition, Merrill Corporation
An initial public offering is the realization of a dream for many entrepreneurs, executives, board members and stockholders, a singular achievement that demonstrates their success in building a strong business and creating value for owners, employees and customers. View The IPO Handbook. -
10.03.2016Issuer Reporting and Disclosure Remains Focus of SEC and Other RegulatorsUpdatesIn a recent speech, SEC Enforcement Director Andrew Ceresney confirmed the SEC’s continued pursuit of investigations and enforcement actions relating to issuer reporting and disclosure, an area that remains a high priority for the SEC and other regulators.
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08.30.2016HSR 2015 Annual Report: Filings Up, Second Requests Down and ESO/RSU ImplicationsUpdatesThe Hart-Scott-Rodino Annual Report Fiscal Year 2015, published by the Federal Trade Commission and the U.S. Department of Justice, summarizes FTC and DOJ actions conducted under the Hart-Scott-Rodino Antitrust Improvements Act in fiscal year 2015, which ended September 30, 2015.
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05.24.2016SEC Continues to Turn the Screw on Non-GAAP Financial Disclosures With Updates to Compliance & Disclosure InterpretationsUpdatesContinuing the SEC’s recent focus on companies’ use of non-GAAP financial measures, the staff of the SEC Division of Corporation Finance issued updated guidance on May 17, 2016 that addresses compliance issues under Regulation G and Item 10(e) of Regulation S-K.
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04.07.2016DOJ Seeks to Boost Voluntary Disclosures Through FCPA Pilot ProgramUpdatesIn a move that follows long-standing complaints from the corporate community and the FCPA defense bar concerning the government’s vague assurances of “cooperation credit” in FCPA resolutions for self-reporting companies, on April 5, 2016, DOJ officials announced a new one-year FCPA “pilot program” with a Guidance that outlines a concrete set of standards defining what constitutes cooperation and what credit companies can expect to earn for that cooperation.
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03.07.2016Preparing for the SEC’s Increased Pursuit of Compliance OfficersUpdatesThe SEC’s recent aggressive enforcement posture against chief compliance officers has raised many concerns, including whether the SEC’s actions are actually chilling robust compliance efforts.
This update was featured in Today's General Counsel on 03.17.2016 as "Is SEC Monday Morning Quarterbacking, By Targeting Compliance Officers?" -
02.23.2016Practical Guidance on FAST Act Changes to JOBS Act and SEC Disclosure RequirementsUpdatesTucked into the 490 pages of the Highway Transportation Bill that President Obama signed into law in December 2015, known as the Fixing America’s Surface Transportation Act (FAST Act) and which largely deals with transportation and infrastructure funding, are several securities law-related provisions.
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02.22.2016SEC Speaks 2016: Enforcement Agenda Goes Beyond DisclosureUpdatesAt the annual “SEC Speaks” conference held February 19-20, 2016, in Washington, D.C., the U.S. Securities and Exchange Commission’s senior leadership reviewed the agency’s efforts and priorities in 2015 and previewed upcoming trends for 2016 and beyond.
This Update was also published in Law360 in February 2016. -
01.27.20162016 Changes in Hart-Scott-Rodino Reporting Thresholds, Clayton Act Section 8 Interlocking Directorates ThresholdsUpdatesThe Federal Trade Commission (FTC) announced on January 21, 2016 that the reporting thresholds under Section 7A of the Clayton Act, known as the Hart-Scott-Rodino (H‑S‑R) Antitrust Improvements Act of 1976 (the Act), will be increased.
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12.30.2015Oregon Supreme Court Upholds Delaware Corporation’s “Exclusive-Forum” BylawUpdates
The Oregon Supreme Court unanimously held that a Delaware corporation’s “exclusive-forum” bylaw, which required that all litigation related to corporate governance be pursued exclusively in the Delaware Court of Chancery, was enforceable under both Delaware and Oregon law . . .
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12.10.15Hart-Scott-Rodino 2014 Annual Report: Increase in Filings, Decrease in Second Requests and Implications for Executive Stock OptionsUpdatesThe Hart-Scott-Rodino Annual Report Fiscal Year 2014, published by the Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ), summarizes FTC and DOJ actions conducted under the Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act, in fiscal year 2014, the period from October 1, 2013 through September 30, 2014.
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12.04.2015M&A Transactions: Affordable Care Act Due Diligence ConsiderationsUpdatesThe Affordable Care Act (ACA) has significantly changed the legal landscape for employer-sponsored health plans by adding reporting obligations, benefit mandates, fees, notices and potential penalties for plans that do not meet specific coverage and cost requirements.
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11.16.2015Proxy Access Update—Preparing for the 2016 Proxy SeasonUpdatesProxy access predominated corporate governance issues for the 2015 proxy season, with over 100 proposals submitted on the topic, compared to 18 in 2014.
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10.13.2015Washington's Amended LLC Statute—Should You Amend Your LLC Agreement?UpdatesWashington state approved significant amendments to its Limited Liability Company Act earlier this year that will become effective on January 1, 2016.
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10.08.2015Dodd-Frank Executive Compensation Update: SEC Adopts CEO Pay Ratio Disclosure RulesUpdatesThe Securities and Exchange Commission (SEC) recently adopted final rules implementing one of the last four remaining executive compensation requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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10.05.2015Don’t Burst My Bubble! IRS Provides Clarity for F ReorganizationsUpdatesRecently, the Internal Revenue Service issued final regulations addressing reorganizations, commonly referred to as “F reorganizations,” under Section 368(a)(1)(F) of the Internal Revenue Code (the Code).
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09.28.2015SEC’s Increased Cybersecurity Enforcement and How to Reduce Your RisksUpdatesThe SEC’s recent activity is part of a larger regulatory enforcement trend that should serve as a warning to all public companies that they would be wise to review and revise their cybersecurity policies, procedures and practices to ensure that they are adequate in today’s changing environment.
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09.14.2015Activist Funds Must Comply with HSR Premerger Reporting RulesUpdatesThe Federal Trade Commission (FTC) filed a complaint in August 2015 against three affiliated activist hedge fund companies and Third Point LLC, their management company, for acquiring voting securities in Yahoo! Inc. without complying with the filing and waiting requirements of the Hart-Scott-Rodino Act (HSR Act).
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09.10.2015Corporate Executives Beware: DOJ’s Six Key Areas for More Aggressive PursuitUpdatesThe U.S. Department of Justice—widely criticized for the perceived lack of cases brought against corporate executives— on September 9, 2015 issued to all U.S. attorneys a new directive designed to hold more individuals accountable for illegal corporate conduct.
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09.04.2015Delaware Court’s Finding of $148 Million Fraud by Dole CEO and General Counsel Offers Major Lessons in Take-Private DealsUpdatesThe Delaware Chancery Court ordered Dole Food Co. Inc. CEO David Murdock and General Counsel Michael Carter to pay Dole shareholders $148 million for fraud in connection with the company’s 2013 take-private deal. The August 27, 2015 decision is one of the largest awards ever to shareholders in a deal-related lawsuit.
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07.31.2015SEC Proposes Rules to Implement Dodd-Frank Act Executive Compensation ClawbackUpdatesThe Securities and Exchange Commission (SEC) recently proposed another long-awaited set of rules to implement the additional clawback policy required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
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06.04.2015Worldwide CEO-CFO Cyber Scam: Prevention and Recovery TipsUpdatesA simple yet highly effective and increasingly common cyber scam, based on social engineering and playing on fear, the desire to be helpful and other emotions, has caused U.S. companies of all sizes to lose millions of dollars in recent months.
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06.02.2015SEC Proposes Executive Pay-for-Performance Disclosure RulesUpdatesThe Securities and Exchange Commission recently proposed rules that would require public companies to disclose the relationship between executive compensation actually paid and the company’s financial performance.
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04.20.2015Is the New Idaho Benefit Corporation Act Right for Your Company?UpdatesIdaho recently joined the ranks of the District of Columbia and 26 other states that have passed benefit corporation legislation. The Idaho Benefit Corporation Act, S.B. 1076, becomes effective July 1, 2015, and provides new Idaho corporations with the ability to incorporate as benefit corporations. The law also provides existing Idaho corporations the ability to elect to become a benefit corporation.
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03.30.2015Omnicare: Good and Bad News for Security Issuers Offering Statements of OpinionUpdatesSecurities issuers breathed a collective sigh of relief last week when the U.S. Supreme Court ruled in Omnicare Inc. et al. v. Laborers District Council Construction Industry Pension Fund et al. that Section 11 of the Securities Act does not apply strict liability to statements of opinions.
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03.04.2015SEC Proposes Dodd-Frank Hedging Policy Disclosure RulesUpdatesThe Securities and Exchange Commission (SEC) recently released long-awaited proposed rules, as mandated by Section 955 of the Dodd-Frank Act, that would require a public company to disclose whether the company permits its employees, officers or directors to purchase financial instruments or otherwise engage in transactions that “hedge” their exposure to risk related to the company’s equity securities that they hold.
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02.23.20152015 SEC Speaks Conference: SEC to Balance Broad Enforcement Agenda and Initiatives with Focus on Core MissionUpdatesThe U.S. Securities and Exchange Commission (SEC) touted an expansive regulatory agenda at this year’s “SEC Speaks” conference, held February 20-21, 2015, in Washington, D.C.
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02.12.2015Proxy Access Update—Director of SEC Division of Corporation Finance Remarks on Decision to Suspend No-Action Relief Based on Rule 14a-8UpdatesOn February 10, 2015, Keith Higgins, Director of the SEC Division of Corporation Finance, provided his informal views on the Division’s controversial decision to “express no views” on the application of Exchange Act Rule . . .
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02.10.2015SEC Proposes Rules to Implement JOBS Act Relief From Exchange Act Registration RequirementsUpdatesIn December 2014, the Securities and Exchange Commission (SEC) proposed rules to implement Title V and Title VI of the Jumpstart Our Business Startups Act (JOBS Act), which permit early stage companies to defer registration . . .
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01.21.20152015 Changes in Hart-Scott-Rodino Reporting Thresholds, Clayton Act Section 8 Interlocking Directorates ThresholdsUpdatesThe Federal Trade Commission (FTC) announced January 15, 2015 that the reporting thresholds under Section 7A of the Clayton Act, known as the Hart-Scott-Rodino (H-S-R) Antitrust Improvements Act of 1976 (the Act), will be increased.
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12.22.2014U.S. v. Flakeboard and SierraPine: HSR “Gun-Jumping” Results in $5 Million PenaltyUpdatesOn November 7, 2014, the U.S. Department of Justice (DOJ) filed a complaint and consent decree in U.S. District Court for the Northern District of California requiring Flakeboard America Limited, Flakeboard’s parent companies and SierraPine to pay nearly $5 million to resolve the DOJ’s allegations that the parties engaged in illegal premerger coordination (“gun-jumping”) in violation of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and a conspiracy in restraint of trade in violation of Section 1 of the Sherman Act.
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07.02.2014Hart-Scott-Rodino 2013 Annual Report: Filings Decreased, Transactions Investigated Increased and Enforcement Continues for Corporate Officers' and Directors' Stock AcquisitionsUpdatesOn May 21, 2014, the Federal Trade Commission and the Department of Justice published the Hart-Scott-Rodino Annual Report Fiscal Year 2013 (for the period from October 1, 2012 to September 30, 2013).
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06.26.2014Halliburton: SCOTUS Reaffirms Fraud-on-the-Market Presumption, Allows Attack at Class Cert StageUpdatesOn Monday the Supreme Court issued its much anticipated decision in Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317, 2014 WL 2807181 (U.S. June 23, 2014), rejecting all pleas to overturn the fraud-on-the-market presumption of reliance established in Basic Inc. v. Levinson, 485 U.S. 224 (1988).
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06.12.2014New Simplified Conversion Process for Washington Corporations and Limited Liability CompaniesUpdates
Starting June 12, 2014, Washington law allows for the “conversion” of Washington corporations and limited liability entities into a variety of other business entities in Washington and other states through the simple adoption of a plan of conversion and the filing of articles of conversion with the Secretary of State.
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02.18.2014SEC Relief for "M&A Brokers:" Not Required to Register as Broker-DealersUpdatesThe Chief Counsel of the SEC’s Division of Trading and Markets recently issued an important no-enforcement letter regarding the status of a person engaged in effecting transactions in connection with the transfer of ownership of a privately held company. This SEC letter is notable not only for the conclusions that it reaches but also for the fact that it follows a significant speech by the same SEC staff lawyer regarding the same and related broker-dealer status questions.
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01.28.20142014 Changes in Hart-Scott-Rodino Reporting ThresholdsUpdatesThe Federal Trade Commission (FTC) recently announced that the reporting thresholds under Section 7A of the Clayton Act, known as the Hart-Scott-Rodino (H-S-R) Antitrust Improvements Act of 1976 (the Act), will be increased.
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10.29.2013Crowdfunding Leaps Closer to Becoming a RealityUpdatesThe Securities and Exchange Commission (SEC) took a giant step in fulfilling its rulemaking obligation under the 2012 Jumpstart Our Business Startups (JOBS) Act last week when it released proposed Regulation Crowdfunding.
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10.01.2013Financial Reform Act: SEC Proposes CEO Pay Ratio Disclosure RulesUpdatesRecently, the SEC, by a vote of 3 to 2, proposed long-delayed and controversial rules to implement the “CEO pay ratio” disclosure mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposed rules, voted in on September 18, 2013, would require U.S. public companies to disclose the median annual total compensation of all employees and the ratio of that median to the annual total compensation of the company’s CEO.
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09.23.2013Revisions to SEC Rule 506 Permitting General Solicitation Effective September 23, 2013UpdatesOn September 23, 2013 the new Securities and Exchange Commission (SEC) rules permitting general solicitation and advertising of private securities offerings pursuant to the Jumpstart Our Business Startups Act of 2012 (JOBS Act) go into effect.
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08.22.2013PCAOB Proposes Significant Changes to Auditor’s Report and Responsibilities for Annual Reports Filed With the SECUpdatesAs a result of ongoing efforts to improve the informational value of the auditor’s reporting model, on August 13, 2013 the Public Company Accounting Oversight Board (PCAOB) proposed two new auditing standards for public comment that would expand the scope of the auditor’s report on a company’s audited financial statements and require the auditor to perform an evaluation of other information included in the company’s annual report filed with the SEC.
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08.20.2013Virtual Currency: Government Scrutiny Continues to GrowUpdatesRiding the coattails of an August 6, 2013 federal court ruling that alleged Ponzi-schemer Trendon Shavers’ Bitcoin-based investment scheme constituted an investment contract, and therefore is a “security” under the federal securities laws, various federal and state lawmakers have aligned their attention to issues affecting the virtual currency market.
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08.09.2013Court Maintains Bitcoin-Related Investment Scheme Is a Security Under the Federal Securities LawsUpdatesIn response to the SEC’s first civil complaint arising from online virtual currency trading, alleged Bitcoin Ponzi schemer Trendon Shavers recently challenged the district court’s authority to hear the case.
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08.09.2013Unscrambling the Eggs: FTC and DoJ Challenges to Non-HSR-Reportable DealsUpdatesOn July 22, 2013, the Federal Trade Commission challenged Solera Holdings’ acquisition of Actual Systems of America, Inc. (ASA), a competing provider of software used by the automotive recycling industry.
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07.16.2013Federal Merger Enforcement Increases to Highest Level in Five YearsUpdatesOn April 30, 2013, the Federal Trade Commission and the Department of Justice published their Hart-Scott-Rodino Annual Report Fiscal Year 2012 for the period from October 1, 2011 to September 30, 2012. The annual report summarizes the actions of the Federal Trade Commission and Department of Justice that were conducted under the Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act, in fiscal year 2012.
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07.11.2013JOBS Act: SEC Adopts Rules to Permit General Solicitation and Advertising for Private OfferingsUpdatesWhen enacted on April 5, 2012, Title II of the Jumpstart Our Business Startups Act of 2012 (JOBS Act) endeavored to lift the long-standing ban on general solicitation and advertising for private securities offerings under Rule 506 and Rule 144A, so long as the securities are sold only to accredited investors under Rule 506 or qualified institutional buyers (QIBs) under Rule 144A.
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06.28.2013 (updated from 04.11.2007)Top 10 Issues to Consider When You Are Sued: Issue #8: Disclosing Litigation and Reserving for Litigation LossesUpdatesDetermining when and how to account for loss contingencies is an important decision for companies that have been sued. Reserving funds for possible litigation losses may significantly affect reported earnings. Worse, failing to book appropriate reserves may lead to restatements of earnings, which could invite an SEC investigation or shareholder litigation. Apart from reserves, the mere decision whether to disclose pending litigation in financial statements can also have major financial and legal ramifications.
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06.21.2013Revlon “Ring-Fencing” Settlement: Greater Risk of SEC Enforcement Activity in Going Private Transactions?UpdatesOn June 13, 2013, the Securities and Exchange Commission announced the settlement of administrative proceedings against Revlon, Inc. In the settlement order, the SEC asserted that the company hid information regarding a 2009 “going private transaction” from its independent board members and minority shareholders in violation of Section 13 of the Securities Exchange Act of 1934 and Rule 13e-3 thereunder.
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06.03.2013SEC Answers Frequently Asked Questions About Conflict Minerals Disclosure — FinallyUpdatesThe Securities and Exchange Commission’s (the Commission or SEC) Division of Corporation Finance provided answers to questions regarding the commission’s rules adopted in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring certain public companies to disclose on a new Form SD their use of conflict minerals originating in the Democratic Republic of the Congo (the DRC) or an adjoining country.
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03.06.2013Supreme Court Holds Securities Fraud Class Certification Does Not Require Showing of Materiality, With Strong Dissents Questioning the Fraud-on-the-Market TheoryUpdatesIn its long-awaited decision in Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, No. 11-1085 (U.S. Feb. 27, 2013), the U.S. Supreme Court held that plaintiffs in a securities-fraud class action do not need to establish the materiality of alleged misrepresentations in seeking class certification.
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11.27.2012What’s New in Executive Compensation for the Upcoming Proxy Season: Compensation Committee and Adviser Independence, ISS Guidelines and Shareholder LitigationUpdatesPublic companies preparing for the upcoming 2013 proxy season will need to keep in mind a number of new developments related to executive compensation.
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11.14.2012New FCPA Guidance by DOJ & SEC: Important, But No Sea ChangeUpdatesOn November 14, 2012, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) issued their long-anticipated Resource Guide regarding the agencies’ enforcement of the Foreign Corrupt Practices Act (FCPA).
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10.31.2012Insurance Coverage for Businesses Affected by Superstorm SandyUpdatesMany businesses throughout the United States—and possibly worldwide—may experience the effects of the devastating superstorm that hit the Eastern United States on October 29 and 30, 2012. Early estimation indicates that the storm caused upwards of $20 billion in property damage and another $10 billion to $30 billion in lost business.
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09.28.2012Delaware Safe Harbor for Controlling Stockholders in a Third-Party Merger: Pro Rata Consideration to All Stockholders and a Diligent Sale ProcessUpdatesWhen a company with a controlling stockholder seeks to sell itself to a third party, the rights of the controlling stockholder and its obligations to minority stockholders are not always clear, tempting plaintiffs to test the boundaries of the controlling stockholder’s duties.
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09.10.2012JOBS Act: SEC Proposes Rules Allowing General Solicitation and Advertising for Private Offerings and Sales of Securities Under Rule 506 and Rule 144AUpdates
The SEC recently issued long-awaited proposed rules to remove existing general solicitation and advertising prohibitions for private offerings and sales of securities under Rule 506 and Rule 144A under the Securities Act of 1933, as amended. These proposed rules implement Section 201(a) of the Jumpstart Our Business Startups Act (JOBS Act) enacted earlier this year. The SEC's proposed amendments leave intact the existing ability of a company to conduct a Rule 506 offering (under Rule 506(b)) without engaging in general solicitation or advertising.
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09.05.2012SEC Adopts Conflict Mineral Disclosure RulesUpdatesThe Securities and Exchange Commission recently adopted final disclosure and reporting rules as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act requiring certain public companies to disclose on a new Form SD their use of conflict minerals originating in the Democratic Republic of the Congo (the DRC) or an adjoining country.
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06.21.2012Hart-Scott-Rodino Filings Increased 24% in 2011; FTC Continues to Enforce HSR Act in Connection With Corporate Officer's and Director's Acquisitions of Company StockUpdates
On June 13, 2012, the Federal Trade Commission and the Department of Justice published their Hart-Scott-Rodino Annual Report Fiscal Year 2011 for the period from October 1, 2010 to September 30, 2011. The Annual Report summarizes Federal Trade Commission and Department of Justice actions conducted under the Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act, in fiscal year 2011. The number of HSR filings in fiscal 2011 increased by 24% over the number of filings in 2010. And the agencies continue to enforce the HSR Act's notification requirements with respect to acquisitions of company stock by corporate officers and directors, often in an inadvertent "failure to file" situation.
This Update provides key highlights of the Annual Report and offers practical advice.
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05.25.2012AOL Gets Its Day in Court (Finally) and Is Awarded Washington Sales Tax RefundUpdatesOn May 9, 2012, the Washington State Board of Tax Appeals granted summary judgment to AOL, Inc., holding that AOL's purchases of services permitting its customers to connect with AOL's data center and the Internet were not subject to retail sales tax. AOL Inc. v. Wash. Dep't of Revenue, No. 11-076 (Wash. B.T.A. May 9, 2012). The procedural lessons of this case may be as important in Washington tax practice as the substantive case.
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03.30.2012JOBS Act Heralds New Era for Startup and Emerging Growth Company FinancingUpdatesAs forecast, on March 27 the U.S. House passed the Senate's amended version of the Jumpstart Our Business Startups Act (the JOBS Act), clearing the way for President Obama to sign the bill into law, which he is expected to do in the coming days.
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03.29.2012Supreme Court Rejects Ninth Circuit Rule on Tolling for Short-Swing Trading ClaimsUpdatesIn Credit Suisse Securities (USA) LLC v. Simmonds, No. 10-1261, ___ U.S. ___, 2012 WL 986812 (Mar. 26, 2012), the U.S. Supreme Court unanimously rejected the Ninth Circuit's 30-year-old rule that tolls the statute of limitations for short-swing profit claims under Section 16(b) of the Securities Exchange Act of 1934 until the insider discloses his transactions, typically in an SEC Form 4.
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02.28.2012Delaware Court Reaffirms Fiduciary Duties Owed by Manager of a Limited Liability CompanyUpdatesIn a recent decision by the Delaware Court of Chancery, Auriga Capital Corp. v. Gatz Properties, LLC, C.A. 4390-CS (Del. Ch. Jan. 27, 2012), the court strongly reaffirmed that managers of a limited liability company owe traditional fiduciary duties to the limited liability company and its minority members unless such duties are explicitly reduced or eliminated by the terms of the limited liability company's operating agreement.
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02.13.2012Medical Device Company Smith & Nephew Resolves FCPA Charges for Unlawful Incentive Payments to Greek PhysiciansUpdatesThe U.S. Department of Justice announced on February 6, 2012 that medical device company Smith & Nephew Inc. has agreed to pay over $22 million to settle Foreign Corrupt Practices Act allegations that it paid government-employed doctors in Greece to use its products.
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01.31.2012Hart-Scott-Rodino Reporting Thresholds to Increase, Clayton Act Section 8 Interlocking Directorates Thresholds IncreasedUpdatesThe Federal Trade Commission recently announced that the reporting thresholds under Section 7 of the Clayton Act, known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976, will be increased.
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01.04.2012Financial Reform Act: SEC Finalizes Rules to Exclude Value of Primary Residence from “Net Worth” for Determining Accredited Investor StatusUpdatesThe Securities and Exchange Commission recently finalized its rules to conform the definition of “accredited investor” to the requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
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12.08.2011A Holiday Gift From Congress To Entrepreneurs: Legislation To Ease The Process Of Raising CapitalUpdatesFour bills designed to help entrepreneurs raise capital are pending before Congress. Three of the bills were passed by the U.S. House of Representatives and sent to the Senate in early November with nearly unanimous bipartisan support. The fourth bill, HR 2167 - Private Company Flexibility and Growth Act, remains before the House of Representatives.
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11.10.2011Reminder: Filing Deadline Is December 1 Under New SEC Large Trader Reporting RulesUpdatesThe Securities and Exchange Commission (the "SEC") recently adopted Rule 13h-1 of the Securities Exchange Act of 1934 (the "Exchange Act") and related Form 13H, establishing new reporting and filing requirements for "large traders" of securities in U.S. markets.
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09.16.2011Proxy Access Update: Remaining SEC Shareholder Proposal Rules Will Become Effective for 2012 Proxy SeasonUpdatesThe SEC recently announced that it will not seek a rehearing or Supreme Court review of the decision by the U.S. Court of Appeals for the D.C. Circuit vacating SEC Rule 14a-11 on proxy access, which would have required companies subject to the Exchange Act’s proxy rules to include in their proxy materials shareholder nominees for the board of directors in some circumstances.
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07.26.2011D.C. Circuit Court Vacates Securities and Exchange Commission Proxy Access RuleUpdatesOn July 22, 2011, the U.S. Court of Appeals for the D.C. Circuit issued its highly anticipated opinion in the challenge to SEC Rule 14a-11 brought by the Business Roundtable and the U.S. Chamber of Commerce. Rule 14a-11 would have required companies subject to the Exchange Act’s proxy rules to include in their proxy materials shareholder nominees for director who met specified conditions. In the strongly worded opinion, written by Judge Ginsburg, the court vacated Rule 14a-11, characterizing the SEC proxy access rule as “arbitrary and capricious” and stating that the SEC had failed “adequately to assess the economic effects” of Rule 14a-11. The court did not address the constitutional challenges raised by the plaintiffs under the First Amendment.
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06.27.2011DOJ's Revised Policy Guide Shows Greater Willingness to Pursue Conduct-Based Remedies Rather Than InjunctionsUpdatesThe Department of Justice, Antitrust Division, recently updated its Policy Guide to Merger Remedies, the first update since 1994.
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05.26.2011The Financial Reform Act: SEC's New Whistleblower Rules Redefine Reporting LandscapeUpdates
This Update was republished as an article in the Securities Reform Act Litigation Reporter
On May 25, 2011, in a 3-2 vote, the U.S. Securities and Exchange Commission (“SEC”) adopted its final rules (“Rules”), as required under Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act” or the “Act”). The Rules implement the SEC’s hotly anticipated new whistleblower bounty program that rewards individuals who provide the SEC with information leading to successful enforcement actions that exceed $1 million in monetary sanctions. Eligible whistleblowers can earn a payout of 10% to 30% of any monetary sanctions collected because of the tipster's information. -
05.18.2011Health Care Fraud Enforcement Trends Highlighted at American Bar Association ConferenceUpdatesThe American Bar Association held a Health Care Fraud Conference on May 11-13, 2011 in which high level officials from both the Department of Justice (“DOJ”) and Health and Human Services (“HHS”) described the new tools and tactics the government is utilizing to combat health care fraud. The government's new campaign will increase the amount of scrutiny that hospitals, pharmaceutical manufacturers, medical device companies and individual providers face.
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05.05.2011Government to Exclude Pharma CEO from Federal Health Programs Based on Corporation's ConvictionUpdatesThe Department of Health and Human Services (HHS) recently announced that it will seek to exclude Howard Solomon, CEO of pharmaceutical company Forest Laboratories Inc., from participation in federal health programs (such as Medicare and Medicaid) based solely on the corporation’s criminal conviction.
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03.31.2011Supreme Court Addresses Materiality in Securities Fraud CasesUpdatesIn Matrixx Initiatives, Inc. v. Siracusano, No. 09-1156 (U.S. Mar. 22, 2011), the U.S. Supreme Court unanimously held that a plaintiff can establish the materiality (for purposes of claims under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5) of adverse events experienced by users of pharmaceutical products without showing that the incidence of harm from those adverse events was statistically significant.
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03.11.2011Hart-Scott-Rodino Filings Increased 63% in 2010UpdatesOn February 15, 2011, the Federal Trade Commission and the Department of Justice published their Hart-Scott-Rodino Annual Report for Fiscal Year 2010 for the period from October 1, 2009 to September 30, 2010. The Annual Report summarizes Federal Trade Commission and Department of Justice actions conducted under the Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act, in fiscal year 2010. The number of filings in fiscal 2010 increased by 63% over the number of filings in 2009, after two consecutive years in which the number of filings reported to the agencies had declined.
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03.08.2011Federal Labor Law Protects Nonunion EmployeesUpdatesThis well-established principle surprises many nonunion employers who mistakenly think that the federal law protecting union activities, the National Labor Relations Act ("NLRA"), does not apply to them. The reality is that the NLRA protects nonunion employees in exactly the same way it protects employees engaged in union activities.
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2011The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and ExecutivesLawyer Publications
RR Donnelley (Fourth Edition, 2011)
Understanding the many SEC, NYSE, Nasdaq and state law issues that affect their companies can be a bewildering task for directors and officers. To help with this is the just released fourth edition of The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and Executives, a "plain English" guide for directors and executives seeking to familiarize themselves with legal matters facing public companies. -
02.17.2011The Financial Reform Act: SEC Adopts Final Say-on-Golden Parachute Rules—Practical AdviceUpdatesThe final rules require companies to include disclosure regarding certain golden parachute arrangements in proxy statements relating to proxy solicitations seeking shareholder approval of a merger or similar significant corporate transaction, as well as in other types of SEC filings.
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02.17.2011The Financial Reform Act: SEC Adopts Final Say-on-Pay and Say-on-Frequency Rules— Practical AdviceUpdatesThis update summarizes the key aspects of the final rules on the say-on-pay and say-on-frequency votes and provides practical advice on steps companies can take in anticipation of the upcoming proxy season.
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02.08.2011Financial Reform Act: SEC Proposes Rules to Exclude Value of Primary Residence from “Net Worth” for Determining Accredited Investor StatusUpdatesThe Securities and Exchange Commission recently proposed a new rule to conform the definition of “accredited investor” to the requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act. In addition, the SEC’s proposed rules also clarify the treatment of debt secured by the property in the calculation of net worth.
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02.02.2011Hart-Scott-Rodino Thresholds to Increase, Interlocking Directorates Thresholds IncreasedUpdatesThe Federal Trade Commission (FTC) recently announced that the reporting thresholds under Section 7 of the Clayton Act, known as the Hart‑Scott-Rodino Antitrust Improvements Act of 1976 (the Act), will be increased. The Act requires all parties to certain transactions, including mergers and acquisitions that meet or exceed the Act's jurisdictional thresholds, to notify the FTC and the Antitrust Division of the Department of Justice of their intentions and to wait a designated period of time before consummating those transactions.
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11.03.2010Fair Warning on Fair Disclosure! SEC Settles its Third Regulation FD ActionUpdatesThe SEC recently settled a Regulation FD action against Office Depot and several of its executives. This Update summarizes the key issues addressed in this action and offers practical guidance.
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11.02.2010The Financial Reform Act: SEC Issues Proposed Say-on-Pay RulesUpdatesThe SEC recently issued proposed rules to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that mandate shareholder advisory votes on executive compensation (the say-on-pay vote), on the frequency of the say-on-pay vote, and on golden parachute compensation arrangements, as well as related disclosure requirements.
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10.27.2010Hart-Scott-Rodino Filings Decreased in 2009 but Enforcement is UpUpdatesEarlier this month, the Federal Trade Commission and the Department of Justice published their Hart-Scott-Rodino Annual Report for Fiscal Year 2009 for the period from October 1, 2008 to September 30, 2009. The Annual Report summarizes Federal Trade Commission and Department of Justice actions conducted under the Hart-Scott-Rodino Antitrust Improvements Act, or HSR Act, in fiscal 2009.
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10.14.2010The Financial Reform Act: Defining a "Family Office" for Exemption StatusUpdatesOn October 12, 2010, the Securities and Exchange Commission proposed a new rule, based on requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, defining “family offices” that will be excluded from regulation under the Investment Advisers Act of 1940.
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10.05.2010New Legislation Eliminates Capital Gains Tax for Certain New Investments in Small Businesses Made Before January 1, 2011UpdatesOn September 27, 2010, President Obama signed into law the Creating Small Business Jobs Act of 2010 (the “Act”). Among other provisions, the Act excludes from gross income for regular income and alternative minimum tax purposes 100% of the capital gains (subject to a per issuer limitation described below) of non-corporate taxpayers from investments in qualified small business stock made after September 27, 2010 and before January 1, 2011. For investments in qualified small business stock made after December 31, 2010, only 50% of the capital gains generally will be excluded from gross income.
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09.24.2010Investment Advisers, Take Note! Amendments to Form ADV Part 2 and Other Changes Resulting From the Financial Reform Act are ImminentUpdatesOn July 28, 2010, the Securities and Exchange Commission adopted amendments to Part 2 of Form ADV, the form used by investment advisers to register with the SEC and state securities regulators. These amendments are effective for filings made on or after October 12, 2010. Also affecting advisers are changes made as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Financial Reform Act, which President Obama signed into law on July 21, 2010. Both the SEC's recent action and the Financial Reform Act make a variety of changes to the Investment Advisers Act of 1940.
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08.26.2010Three + Three = Proxy Access for 2011: SEC Approves Rule Amendments, Generally Effective for the 2011 Proxy Season, to Allow Shareholders Right to Nominate DirectorsUpdatesAt yesterday's open meeting of the Securities and Exchange Commission (SEC), a split Commission approved rule amendments to permit shareholders to nominate directors for corporate boards.
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08.25.2010HSR Reporting Relief or Increased Burden? Proposed Changes to Hart-Scott-Rodino Premerger Notification Rules May Increase Reporting Burden for Investment Firms and Their ManagersUpdatesThe Federal Trade Commission recently announced and asked for comments about proposed changes to the Hart-Scott-Rodino (HSR) premerger notification rules and report form.
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08.16.2010The Financial Reform Act: New Offices of Minority and Women Inclusion Will Require Government Agencies to Focus on DiversityUpdatesOn June 30, 2010, the House of Representatives approved the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, a comprehensive and expansive set of financial reforms widely thought to be the toughest changes to financial regulation in the United States since the Great Depression.
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07.29.2010Perkins Coie Announces the Revised Edition of the Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's Executive Compensation Disclosure RulesLawyer PublicationsPerkins Coie is pleased to announce the publication of a new edition of the Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's Executive Compensation Disclosure Rules, a publication written by Perkins Coie attorneys and published by RR Donnelley.
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07.21.2010The Financial Reform Act: Financial Reform Legislation Imposes New Requirements on Private Funds and Their AdvisersUpdatesOn June 30, 2010, the House of Representatives approved the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, a comprehensive and expansive set of financial reforms widely thought to be the toughest changes to financial regulation in the United States since the Great Depression.
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07.21.2010The Financial Reform Act: New Corporate Governance, Executive Compensation and Proxy Voting Provisions Apply to All Public CompaniesUpdatesCongress has approved the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and President Obama has signed it into law.
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06.29.2010New Washington Limited Partnership Law Effective (in Part) July 1, 2010UpdatesLast year, Governor Christine Gregoire signed into law the Uniform Limited Partnership Act, or ULPA. ULPA modified Washington's existing limited partnership statute, which was based on the Revised Uniform Limited Partnership Act, or RULPA. ULPA became effective for new limited partnerships on January 1, 2010, but generally takes effect for existing limited partnerships, with certain significant exceptions, on July 1, 2010.
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06.16.2010Amendments Add Clarity to the Dissolution and Winding Up of Washington Limited Liability CompaniesUpdatesOn June 10, 2010, amendments to Washington's Limited Liability Company Act, which address the dissolution of a Washington limited liability company, took effect.
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05.04.2010Significant Tax Change in Washington State: Business & Occupation Tax Extended to Corporate DirectorsUpdatesOn April 23, 2010, Governor Christine Gregoire signed into law Second Engrossed Substitute Senate Bill 6143, which extends Washington's business and occupation (B&O) tax to corporate directors beginning July 1, 2010.
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04.29.2010New FTC/DOJ Guidelines Provide Increased Transparency for Horizontal Merger ReviewUpdatesOn April 20, 2010, the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice jointly released their proposed revisions to the Horizontal Merger Guidelines for public comment.
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04.06.2010NASDAQ Eliminates Duplicative Press Release and Notification RequirementsUpdatesOn March 15, 2010, the Securities and Exchange Commission approved Nasdaq's proposed rule change to modify its requirements pertaining to public disclosures by listed companies. In an effort to eliminate duplicate disclosures, the Nasdaq rule change will allow companies to make a public announcement by filing a Form 8-K, where required by SEC rules, or by issuing a press release.
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03.31.2010Image is Everything: SEC Brings Second Regulation FD Action in Six MonthsUpdatesContinuing its focus on Regulation FD, the SEC filed an action in early March against Presstek, Inc., a manufacturer and distributor of high-technology digital imaging equipment, and its former CEO, Edward J. Marino.
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03.04.2010Seeking Shareholder Engagement: SEC Amends e-Proxy Rules to Increase FlexibilityUpdatesThe Securities and Exchange Commission recently adopted amendments to the e-proxy rules in an effort to increase shareholder participation in the voting process. Data indicates that, since the adoption of the e-proxy model, participation by retail shareholders has been lower when those shareholders receive only the Notice of Internet Availability rather than a full set of proxy materials.
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02.25.2010SEC Proposes Amendments to the Stock Repurchase Safe Harbor and Requests CommentsUpdatesThe Securities and Exchange Commission has proposed amendments to clarify and modernize Rule 10b-18 of the Securities Exchange Act of 1934 that governs public companies' repurchases of their common stock. The SEC is accepting comments to these proposed amendments through March 1, 2010. This Update summarizes the key issues in the proposed amendments and alerts you to the opportunity to make comments on the proposal.
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12.30.2009New Requirements No Longer "Option"-al! February 1, 2010 Deadline and Final Regulations on Return and Information Statement Requirements for ISOs and ESPPsUpdatesThe Internal Revenue Service recently issued new final regulations addressing the return and information statement requirements applicable to exercises of incentive stock options, or ISOs, and transfers of shares purchased under an employee stock purchase plan, or ESPP. The IRS has waived the requirements under the new regulations for ISO exercises and transfers of ESPP shares that occur during 2009.
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12.22.2009Happy Holidays From the SEC! New Rules Require Enhanced Compensation and Governance Disclosure: Our Top 10 Tips for the Upcoming Proxy SeasonUpdatesThe Securities and Exchange Commission recently adopted final rules to require enhanced compensation and corporate governance disclosure for public company proxy statements and other SEC filings. The final rules reflect changes that clarify, and in some instances broaden, the proposed rules issued on July 17, 2009. The SEC designed these amendments to improve corporate disclosures and allow shareholders to make more informed voting and investment decisions.
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12.16.2009Amendments to NYSE Corporate Governance Requirements Are Effective for 2010 Annual Reports and Proxy StatementsUpdatesOn November 25, 2009, the Securities and Exchange Commission approved in their entirety the proposed amendments to the corporate governance requirements of the NYSE Listed Company Manual. These amendments will become effective January 1, 2010.
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01.08.2009Exon-Florio/CFIUS: Does Your Transaction Present National Security Considerations?UpdatesThe U.S. Treasury Department, chair of the Committee on Foreign Investment in the United States ("CFIUS"), recently published guidance on the types of transactions previously reviewed by CFIUS that have presented national security considerations ("Guidance"). The Guidance is intended to provide insight into how CFIUS identifies the national security effects of covered transactions and may assist parties considering whether to file a voluntary notice of a transaction with CFIUS [1]. This is an important determination because, although filing a CFIUS notice is voluntary, the parties may be forced to unwind a transaction where no filing was made if the President later determines it poses national security risks.
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12.02.2009End-of-the-Year Actions May Be Needed for Compliance With Code Sections 162(m) and 409AUpdatesPublic companies should take steps to determine whether any amendments may be required to new and outstanding compensatory arrangements in light of Section 162(m) of the Internal Revenue Code and certain transition relief under Revenue Ruling 2008-13.
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11.30.2009SEC Settles its First Regulation G Enforcement Action: How to Avoid Your Own Enforcement ActionUpdatesOn November 12, 2009, the SEC announced the settlement of its first Regulation G enforcement action. Regulation G prohibits the presentation of non-GAAP financial measures in a misleading way and requires companies to present—alongside the non-GAAP financials—the most directly comparable GAAP measures and a clearly understandable reconciliation of the GAAP and non-GAAP measures.
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10.16.2009SEC Delays Implementation of Proxy Access for Shareholder Board Nominations After Receiving Extensive CommentsUpdatesThe Securities and Exchange Commission in June 2009 proposed amendments to the federal proxy rules to expand access to the board of directors nomination process for eligible shareholders.
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10.05.2009What's This? A Regulation FD Enforcement Action?UpdatesLast week's settlement of a Reg. FD action by the SEC against the CFO of American Commercial Lines (ACL) seems like a throwback to an interrupted line, to the enforcement actions from 2002 to 2005 that slowed to a crawl with the "Siebel II" action in late 2005.
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09.24.2009The Consumer Financial Protection Agency Act of 2009: Welcome to the World of Financial Services Regulation!UpdatesThis month, Congress will begin to address the proposed Consumer Financial Protection Agency Act of 2009, known as the CFPAA, which is one piece of the dramatic financial regulatory reform that Barney Frank, Chairman of the House Financial Services Committee, introduced in July 2009.
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09.10.2009Congressional Action on Executive Compensation: Senate to Take Up Bill on Say-on-Pay and Compensation Committees as Congress Returns From Its August RecessUpdatesOn July 31, 2009, the House of Representatives, with the support of the Obama Administration, passed H.R. 3269, the Corporate and Financial Institution Compensation Fairness Act of 2009, proposed legislation that would require all publicly traded companies to seek a nonbinding "say‑on-pay" vote of shareholders on executive compensation packages annually and in acquisition transactions.
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09.08.2009In a Leveraged Buyout With a Controlling Stockholder, Loyal Directors Must Actively Negotiate: Louisiana Municipal Police Employees' Retirement System v. FertittaUpdatesA recent decision by the Delaware Court of Chancery reinforces the responsibility of a board of directors to assertively defend the interests of the noncontrolling stockholders when negotiating with a controlling stockholder in order to satisfy the board's duty of loyalty.
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08.25.2009First Circuit Denies Work Product Protection to Tax Accrual WorkpapersUpdatesA recent full court First Circuit decision held that the taxpayer's tax accrual workpapers are not protected under the work product privilege and must therefore be released to the Internal Revenue Service.
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08.03.2009SEC Seeks More Sunlight—Proposes to Expand Compensation and Governance Disclosure for 2010 Proxy SeasonUpdatesThe Securities and Exchange Commission (SEC) recently released new proposed rules concerning compensation and corporate governance disclosure for public company proxy statements and other SEC filings.
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07.28.2009SEC Proposal Would Expand Compensation and Governance Disclosure for 2010 Proxy SeasonUpdatesThe Securities and Exchange Commission recently released new proposed rules concerning compensation and corporate governance disclosure for public company proxy statements and other SEC filings. The SEC intends these proposed amendments to improve corporate disclosures and allow shareholders to make more informed voting and investment decisions.
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07.27.2009Where Are My Votes? SEC Approves NYSE Amendment to Eliminate Discretionary Broker Voting in Director ElectionsUpdatesOn July 1, 2009, the Securities and Exchange Commission (SEC), in a 3-to-2 vote, approved a proposed amendment to New York Stock Exchange (NYSE) Rule 452 that will prohibit discretionary broker voting in director elections.
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07.20.2009SEC Proposes Proxy Access for Shareholder Board Nominations and Makes Extensive Request for CommentsUpdatesOn June 10, 2009, the Securities and Exchange Commission proposed amendments to the federal proxy rules to expand access to the board of director nomination process for eligible shareholders.
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06.23.2009Ready or Not? Widespread Regulation of Hedge Funds and Other Private Pools of Capital Could Be ComingUpdatesThe Obama Administration has proposed sweeping new regulations that would overhaul the U.S. financial regulatory system, including a proposal published June 17, 2009 that would require investment advisers of hedge funds and other private pools of capital whose assets under management exceed some unspecified, but modest, threshold to register with the Securities and Exchange Commission under the Investment Advisers Act of 1940.
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05.28.2009New Accounting Treatment for Contingencies in M&A TransactionsUpdatesThe Financial Accounting Standards Board recently issued Staff Position No. 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, which provides new guidance that changes the accounting treatment of contingent assets and liabilities in mergers and acquisitions and other business combinations under FASB Statement No. 141 (revised 2007), Business Combinations.
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04.29.2009Lyondell Chemical Corp. v. Ryan: Delaware Supreme Court Holds Board's Accelerated Process for Sale of Company Did Not Constitute Bad Faith Breach of Revlon DutiesUpdatesIn Lyondell Chemical Corp. v. Ryan, C.A. 3176 (Del. Mar. 25, 2009), the Delaware Supreme Court, acting en banc, reversed the decision of the Delaware Court of Chancery and granted summary judgment to Lyondell's board of directors, dismissing the claim that it failed to act in good faith in conducting the sale of its company through an accelerated negotiation process. The Court reaffirmed important principles governing a board's Revlon duties in connection with the sale of a company and directors' good faith performance of those duties.
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04.02.2009In re Citigroup Inc. Shareholder Derivative Litigation: Delaware Court of Chancery Confirms Existing Principles of Delaware Law Despite Financial ClimateUpdatesIn a decision that affirms existing Delaware law, the Delaware Court of Chancery in In re Citigroup Inc. Shareholder Derivative Litigation, No. 3338-CC, 2009 WL 481906 (Del. Ch. Feb. 24, 2009), upheld the business judgment rule and its protection of directors' business decisions in the face of worldwide economic losses. The court dismissed all but one facet of the case, which alleged Caremark violations against Citigroup directors due to Citigroup's losses in the subprime lending market.
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03.23.2009Delaware Supreme Court: Corporate Officers Have Same Fiduciary Duties as Corporate Directors; Common Law Shareholder Ratification Clarified: Gantler v. StephensUpdatesIn Gantler v. Stephens, C.A No. 2392, 2009 WL188828 (Del. Jan. 27, 2009), the Delaware Supreme Court affirmed a principle of corporate law that had been implied in prior decisions: officers of Delaware corporations owe the same fiduciary duties of care and loyalty to the corporation and its shareholders as directors owe. The Court also resolved contradictory prior opinions on the common law doctrine of shareholder ratification by limiting the doctrine to approval of board action that is not otherwise required to be approved by shareholders in order to be effective.
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03.17.2009Sarbanes-Oxley Act Section 404(b) Reminder: Non-Accelerated Filers Must File Auditor Attestation Report on Internal Control Over Financial Reporting for Fiscal Years Ending on or After December 15, 2009UpdatesUnless the SEC grants another extension, a non-accelerated filer must provide its first auditor attestation report under Section 404(b) of the Sarbanes-Oxley Act in its SEC annual report for the fiscal year ending on or after December 15, 2009. A "non-accelerated filer" is a company that did not have a public float of $75 million or more on the last business day of its most recently completed second fiscal quarter.
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03.11.2009The SEC Speaks in 2009: Our Top TakeawaysUpdatesIn February 2009, at the annual SEC Speaks conference in Washington, D.C., senior staff of the U.S. Securities and Exchange Commission reviewed significant actions of the previous year and identified top priorities for the year to come. This update lists our top takeaways from the conference that may have an impact on your business.
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03.02.2009Economic Stimulus Bill Provides First-Time Homebuyers With Expanded Tax CreditUpdatesThe American Recovery and Reinvestment Act of 2009, commonly referred to as the Stimulus Bill, was signed into law on February 17, 2009 and contains an expanded tax credit for first-time homebuyers who make qualifying purchases prior to December 1, 2009.
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02.23.2009Economic Stimulus Bill Provides Energy Tax Incentives and Relaxes Tax Rules for BusinessesUpdatesThe American Recovery and Reinvestment Act of 2009, commonly referred to as the Stimulus Bill, signed into law on February 17, 2009, contains renewable energy tax incentives, defers realization of certain cancellation of debt income, suspends certain restrictions on the deductibility of original issue discount, and limits S corporation built-in gain recognition.
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02.13.2009Proxy Season Reminder: Public Companies Should Consider Updating the Advance Notice Provisions in Their BylawsUpdatesProxy statement preparation and planning for annual meetings of stockholders are in full swing. Along with proxy season comes the possibility that stockholders may submit proposals or nominations for consideration at the annual meeting.
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02.10.2009D&O Insurance in a Year of UncertaintyUpdatesWhile the downturn in the economy has adversely affected the sellers of directors’ and officers’ liability insurance – much as it has companies in all sectors of the economy – investing in D&O insurance is still a wise course of action. This Update offers nine suggestions for ensuring that a company’s directors and officers are adequately protected in this environment against potential liabilities that D&O insurance normally would pay.
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02.2009Second Circuit Says No Cutback on Corporate Criminal Liability – Decision Underscores the Importance of Corporate Compliance ProgramsUpdatesIn a closely watched case, the Second Circuit Court of Appeals has refused to cut back on traditional standards for corporate criminal liability. The Association of Corporate Counsel, the U.S. Chamber of Commerce and other groups had asked the court to depart from a century of judicial precedent holding corporations broadly liable for criminal acts committed by employees. The groups argued that such broad vicarious criminal liability was counterproductive and asked the court to bar corporate criminal liability unless prosecutors could show that the corporation lacked an effective compliance program.
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01.20.2009Are You Ready for E-Proxy? Eight Lessons Learned From the 2008 E-Proxy SeasonUpdatesThe 2009 proxy season marks the first year in which all public companies must comply with the Securities and Exchange Commission's e-proxy rules. These rules were effective for large accelerated filers, and on a voluntary basis for all other companies, as of January 1, 2008. The experience of early adopters in 2008 provides valuable insight for companies implementing the e-proxy rules for the first time, as well as those companies that are looking for ways to improve their e-proxy experience over last year. The lessons learned will help companies better anticipate challenges, establish informed expectations, and identify strategies for the upcoming proxy season. This Update provides background information on e‑proxy rules and offers our "Top 8" lessons learned from the 2008 e-proxy season.
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11.18.20082007 Hart-Scott-Rodino Act Statistics ReleasedUpdatesThe Federal Trade Commission and the Department of Justice recently released their Hart-Scott-Rodino Annual Report for Fiscal Year 2007 for the period from October 1, 2006 to September 30, 2007.
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10.2008SEC Enforcement Division Releases Internal Enforcement ManualUpdatesOn October 6th, the Securities Exchange Commission (SEC) released its Enforcement Division manual to the general public for the first time.
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10.16.2008Hexion v. Huntsman: Delaware Court of Chancery Interprets "Material Adverse Effect" and "Knowing and Intentional Breach" of Merger AgreementUpdatesIn a decision that amplifies how Delaware courts analyze material adverse effect clauses in merger agreements and examines what constitutes bad faith by a buyer, the Delaware Court of Chancery in Hexion Specialty Chemicals, Inc. v. Huntsman Corp., C.A. No. 3841-VCL, 2008 WL 4457544 (Del. Ch. Sept. 29, 2008), dealt the buyer, Hexion Specialty Chemicals, Inc., a stunning blow.
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10.03.2008SEC Adopts Amendments to Rules and Forms for Foreign Private IssuersUpdatesThe SEC recently adopted amendments to rules and forms affecting foreign private issuers.
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10.01.2008Corporate Minutes: Best Practices Create Best EvidenceUpdatesA greater emphasis on corporate record keeping under the Sarbanes-Oxley Act of 2002 and related regulations, shareholders’ heightened expectations of directors and the intense scrutiny of director conduct in litigation, including option backdating cases, are increasingly placing corporate minutes in the spotlight.
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09.30.2008Delaware Decision Puts Former Directors' Advancement Rights at RiskUpdatesProtection of directors from the expense of litigation is a key issue for both companies and directors. Most corporate bylaws make indemnification of directors to the fullest extent allowed by law mandatory.
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09.15.2008Amendments to Form D Are Effective; Electronic Filing Required SoonUpdatesEarlier this year, the SEC amended its rules to revise the information required to be furnished on Form D and, after a transition period, to require the form to be filed electronically.
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09.08.2008SEC Releases Guidance on the Use of Websites to Provide Information to InvestorsUpdatesThe SEC recently issued an interpretive release regarding the use of company websites to disclose information to investors. This new guidance focuses on four main topics:
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08.22.2008SEC Extends Deadline for Non-Accelerated Filers to Provide Auditor Attestation Report on Internal Control Over Financial Reporting Under Sarbanes-Oxley Section 404UpdatesThe SEC recently approved a one-year extension of the date on which non-accelerated filers must begin to comply with the auditor attestation report on internal control over financial reporting required by Section 404(b) of the Sarbanes-Oxley Act of 2002.
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06.19.2008Practice Tips: Auditors and Internal InvestigationsUpdatesAuditors today routinely request information about internal investigations.
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06.04.2008Important Reminder: Deadline Approaching for Amending Deferred Compensation Arrangements Under Section 409AUpdatesThe deadline is fast approaching for amending deferred compensation arrangements that are subject to Section 409A of the Internal Revenue Code.
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05.30.2008Delaware Bankruptcy Court Revisits "Deepening Insolvency" LiabilityUpdatesIn addition to running businesses and fulfilling their ordinary fiduciary duties, in recent years, officers and directors of financially troubled companies have had to worry about potential "deepening insolvency" claims.
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03.21.2008IRS Clarifies New Adverse Position on Section 162(m) Performance-Based Compensation Exception and Provides Transition ReliefUpdatesThe IRS recently issued Revenue Ruling 2008-13, which clarifies the IRS's new position with
respect to the applicability of the performance-based compensation exception for purposes of Section 162(m) of the Internal Revenue Code and grants transition relief to provide public companies an opportunity to review outstanding compensation plans, agreements and other arrangements in light of the IRS's new position. -
02.14.2008The SEC Speaks in 2008: Our Top 10 TakeawaysUpdatesAt the annual SEC Speaks conference in Washington, D.C., last week, senior staff of the U.S. Securities and Exchange Commission reviewed significant SEC actions from the previous year and identified their top priorities for the year to come.
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02.07.2008SEC Permits Smaller Public Companies to Use Form S-3 Registration Statements for Primary Offerings of SecuritiesUpdatesThe SEC recently amended the eligibility requirements for companies to use Form S-3 registration statements to facilitate more efficient capital market access by smaller public companies.
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01.22.2008SEC Adopts Amendments to Rules 144 and 145UpdatesThe Securities and Exchange Commission recently finalized amendments to Rules 144 and 145 under the Securities Act of 1933, which will become effective on February 15, 2008. The amendments apply to securities acquired before or after February 15, 2008.
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01.18.2008Preparing for "E-Proxy Season": A Practical Guide to the New E-Proxy RulesUpdates
In 2007 the Securities and Exchange Commission adopted amendments to the proxy rules that will require companies to post their proxy materials on a publicly available Internet website. Proxy materials include proxy statements, proxy cards, information statements, annual reports to security holders, notices of shareholder meetings, additional soliciting materials, and any amendments to such materials. The e‑proxy rules do not apply to proxy materials relating to business combination transactions.
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10.29.2007Back to Writing Basics: SEC Says Executive Compensation Disclosure Needs Better Analysis, Clarity and OrganizationUpdatesThe Securities and Exchange Commission recently reviewed the executive compensation disclosure of 350 companies under its new rules adopted in 2006. Following this review, the SEC issued comment letters to the companies reviewed and then issued a report that follows the general themes that run throughout these comment letters.
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10.29.2007Expanded Deferred Compensation Relief: IRS Fully Extends Section 409A Documentation Deadline and Certain Transition Relief Through 2008, Delays Effective Date of Final Regulations and Provides W-2 and Other GuidanceUpdatesLast week the IRS issued Notice 2007-86, which delays until January 1, 2009 the deferred compensation final regulations of Internal Revenue Code Section 409A and generally provides expanded relief and guidance. The IRS also separately issued Notice 2007-89, which generally extends for the 2007 tax year prior IRS guidance to employers and other service providers regarding reporting and withholding obligations for annual deferrals of compensation and amounts includible in gross income due to Section 409A violations. This update summarizes key aspects of both notices and provides practical guidance.
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09.12.2007Limited Deferred Compensation Relief: IRS Partially Extends Section 409A Documentation Deadline and Provides Guidance — but Employers Must Still Take Some Actions by December 31, 2007UpdatesOn September 10, 2007, the IRS issued Notice 2007-78 providing limited relief and guidance for the deferred compensation tax rules of Internal Revenue Code Section 409A, including a limited extension until December 31, 2008 of the deadline to adopt documents that comply with Section 409A. This update summarizes the key aspects of the notice and offers practical tips for employers and other service recipients.
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08.30.2007FTC v. Whole Foods: Watch Your Language!UpdatesLast week, a federal court released a public version of its 93-page opinion providing its reasons for denying the Federal Trade Commission's challenge to Whole Foods Markets' acquisition of organic grocer Wild Oats.
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08.29.2007Delaware Courts Reject Deepening Insolvency Cause of ActionUpdatesThe Delaware Supreme Court recently issued a long-awaited decision on whether a cause of action asserting deepening insolvency exists under Delaware law.
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07.23.2007IRS Confirms Tax Consequences of New Vesting Restrictions on Fully Vested StockUpdates
The IRS recently issued Revenue Ruling 2007-49, which provides guidance on the tax consequences of certain transactions involving new vesting restrictions on fully vested stock. This update provides a brief background on Section 83 of the Internal Revenue Code, summarizes the key highlights from the revenue ruling and offers practical tips.
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07.18.2007New Tools Will Help Companies Comply With Sarbanes-Oxley Act Section 404 Internal Control Over Financial Reporting: SEC Guidance and Proposed PCAOB Auditing StandardUpdates
The SEC recently published an interpretive release providing guidance on compliance with Section 404 of the Sarbanes-Oxley Act of 2002. The SEC separately finalized rule amendments relating to internal control over financial reporting and defining the term “material weakness.” The guidance became effective on June 27, 2007, and the amendments to the rules will be effective August 27, 2007. The SEC also proposed a new definition for the term “significant deficiency.”
This Update summarizes key highlights of the SEC's interpretive guidance, the SEC's new and proposed rules and PCAOB Auditing Standard No. 5.
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06.07.2007IRS Narrows Definition of "Covered Employees" for Purposes of the $1 Million Limitation on Deducting Executive CompensationUpdates
This week the IRS issued guidance on identifying "covered employees" for purposes of Section 162(m) of the Internal Revenue Code in response to the SEC's recent amendments to its executive compensation disclosure rules. This Update summarizes the key highlights from this IRS guidance.
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05.29.2007The Board of Directors in the Age of InvestigationUpdates
Directors of public companies are being called on to supervise independent investigations with increasing frequency. The ongoing furor over stock option backdating is simply the most recent illustration of this trend. Countless boards are finding themselves in a position of conducting independent investigations in order to identify improprieties and respond to concerns from regulators, prosecutors, auditors, shareholders and others.
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05.17.2007Supreme Court to Address Scheme Liability TheoryUpdatesThe U.S. Supreme Court recently agreed to determine whether a legal theory known as “scheme liability” can be used to sue for securities fraud entities that, until now, have largely been protected from liability.
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04.16.2007Deferred No Longer! IRS Issues Section 409A Final Regulations Adding Generally Modest – but Helpful – ReliefUpdates
Last week the IRS issued the long-awaited final regulations under Section 409A of the Internal Revenue Code, which generally provides that amounts deferred under a "nonqualified deferred compensation plan" are currently includible in taxable income if not subject to a substantial risk of forfeiture, unless the plan meets specified design and operational requirements. Failure to comply with the applicable requirements of Section 409A can result in significant income tax consequences, including a 20% additional tax imposed on the employee or independent contractor.
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03.20.2007Better Late Than Never? SEC Releases Guidance on Amended Regulation S-K for Current Proxy SeasonUpdates
Last week the SEC Division of Corporation Finance released much-anticipated new Staff guidance on the rest of its new proxy disclosure requirements under amended Regulation S-K, completing its interpretations of the new rules and complementing its guidance on the new executive compensation disclosure requirements released in January 2007. This new SEC Staff guidance addresses a wide variety of topics covering a diverse set of specific circumstances and replaces or revises prior Staff interpretation of Items 201, 403, 404, and 407 of Regulation S-K as previously published in the SEC's Manual of Publicly Available Telephone Interpretations and its supplements.
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03.09.2007Perkins Coie Announces the Revised February 2007 Edition of the Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's New RulesUpdatesPerkins Coie is pleased to announce a revised version of the Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's New Rules, a publication written by Perkins Coie attorneys that provides a complete, plain English explanation of the SEC's executive compensation and related disclosure requirements.
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02.28.2007Now Are You Ready for the New Rules? Special Preview of the Revised February 2007 Edition of the Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's New RulesUpdatesThe Securities and Exchange Commission amended its new executive officer and director compensation disclosure rules in December 2006 and released Staff guidance on these rules in 2007. The substantial changes to the rules will likely increase the attention and scrutiny the SEC, investors and the public apply to proxy statements and annual reports during ongoing proxy and annual reporting seasons. The revised edition of the Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's New Rules provides an overview of the most significant changes and requirements through mid-February 2007 under the new rules and guidance and offers practical advice to help companies understand, and comply with, the new disclosure requirements.
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02.05.2007Shareholder Inspection Demands Surge: Be ReadyUpdates
In 2006 a record number of unhappy shareholders fought in Delaware courts to enforce their demands to inspect corporations' books and records. What caused this dramatic increase? Delaware courts frequently chastised shareholders for failing to use this powerful fact-gathering tool before bringing derivative suits. Many states, including Washington and Delaware, also recently expanded shareholders' statutory inspection rights.
In this Update we highlight two recent Delaware cases, Polygon and Shamrock, that identify important defenses available to corporations responding to inspection demands, and provide practical advice.
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01.24.2007Who Is Your Constituency? Pending Washington State Bill Could Impact Fiduciary Duties of Directors of Washington CorporationsUpdatesRecently introduced Washington House Bill 1111 and its Senate counterpart, Senate Bill 5294, would add Washington to the list of states with so-called "constituency statutes." If adopted, these bills will significantly change the standards of conduct that apply to directors of corporations organized in the State of Washington.
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01.09.2007Are You Ready for the New Rules? Perkins Coie Announces the Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's New RulesUpdatesPerkins Coie is pleased to announce the Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's New Rules. This handbook is the most practical, plain English guide available for public company management, directors and general counsel on the SEC's new requirements for public company disclosure and reporting of executive and director compensation and related issues.
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01.05.2007Second Circuit Applies Stringent Standard for Class Certification in IPO LitigationUpdatesIn a decision with potentially far-reaching effects, the United States Court of Appeals for the Second Circuit recently toughened the standard for granting class certification under Rule 23 of the Federal Rules of Civil Procedure. In In re Initial Public Offering Securities Litigation, No. 05-3349-cv (Dec. 5, 2006), the court reversed an order granting class certification in six consolidated securities fraud actions brought by thousands of investors against major investment banks alleging that they had inflated market prices and received secret commissions when underwriting IPOs. This decision may affect all areas of law influenced by class actions, including employment, antitrust, consumer protection and product liability.
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12.22.2006Happy Holidays From the SEC! Change to New Compensation Disclosure Rules for Stock and Option Awards Effective for Upcoming Proxy SeasonUpdatesThe Securities and Exchange Commission just announced that it has amended its new executive officer and director compensation disclosure rules, effective immediately. The FASB requires companies to recognize the costs of equity awards over the period in which an employee must provide service in exchange for the award under Statement of Financial Accounting Standards No. 123 (revised 2004) Share-Based Payment. The new SEC amendments will more closely align the reporting of equity awards in the Summary Compensation Table and the Director Compensation Table to the amounts that are disclosed in the financial statements under FAS 123R.
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12.19.2006Department of Justice Revises Factors Affecting Decision to Indict CompaniesUpdatesThe Department of Justice recently announced that it will revise some controversial policies outlined in a document known as the Thompson Memorandum. The new policies will place procedural limits on attempts by the Department of Justice to require companies under investigation to waive the attorney-client privilege. The policies will also bar federal prosecutors from considering as a factor in charging decisions whether a company is advancing attorneys' fees to employees or other corporate agents. These widely anticipated changes respond to strong criticism of the Thompson Memorandum from many sources and are designed to preempt legislation introduced by Arlen Specter, the outgoing chair of the Senate Judiciary Committee.
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12.18.2006Supreme Court Agrees to Revisit Application of Per Se Rule Against Resale Price MaintenanceUpdatesOn December 7, 2006, the U.S. Supreme Court granted certiorari in Leegin Creative Leather Products v. PSKS, Inc., a potential landmark case challenging the long-standing "Dr. Miles" doctrine condemning resale price maintenance and minimum vertical price fixing as per se violations of Section One of the Sherman Act.
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12.04.2006Financial Reporting Reminder for 2007: Accounting for Uncertain Income Tax Positions Under FIN 48UpdatesPublic companies, and other companies that need audited financial statements, must begin accounting for uncertain income tax positions under a new rule: Financial Accounting Standards Board Interpretation No. 48, which was released in July, and is effective for fiscal years beginning after December 15, 2006. Most reporting companies will implement the new rule for their first quarter 2007 financial statements.
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09.05.2006Sunlight for Executive Pay - SEC Overhauls Executive Officer and Director Compensation and Related Disclosure RulesUpdatesThe federal securities laws require clear, concise and understandable disclosure about the amount and type of all compensation paid to chief executive officers and other highly compensated executives of public companies. In recent years widespread and increasing interest in executive pay and the perceived inadequacy of current disclosure spawned frequent front-page headlines and heated rhetoric from members of Congress and shareholder advocates. The Securities and Exchange Commission recently adopted comprehensive amendments to its executive officer and director compensation disclosure rules. The new rules retain the combined tabular and narrative format, but attempt to elicit a clearer, more complete picture of all compensation paid to specified executive officers and to directors. The SEC also significantly revised disclosure rules for financial transactions and relationships between companies and executive officers, directors, significant shareholders, and their respective family members, as well as with respect to director independence and other corporate governance matters. Companies must make all disclosures under the new rules in plain English. These changes affect disclosures in proxy and information statements, annual and periodic reports, and registration statements, as well as Form 8-K reporting of compensation arrangements.
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08.08.2006Examining Your Options - Practical Guidance on Stock Option "Backdating" and Related Issues and Their Impact on Upcoming SEC ReportsUpdatesPublic company executives and directors are in the crosshairs again, this time over stock option "backdating" and related issues. According to media reports, more than 80 companies have announced investigations into or deficiencies with their option granting practices, and at least 19 public company executives have been fired or have resigned as a result of option granting issues.
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07.28.2006Decision in Washington Derivative Case Highlights Benefits of Good Governance PracticesUpdatesIn a decision generally protective of directors and officers, a Seattle federal district court recently held that shareholders who seek to bring derivative claims under Washington law must meet requirements similar to those imposed under Delaware law. In re Cray, Inc., 431 F. Supp. 2d 1114 (W.D. Wash. 2006).
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07.14.2006Website Posting of SEC and Corporate Governance Materials -- Required Postings and Practical AdviceUpdatesIn recognition of the central role of the Internet in today's global economy, many companies rely on their corporate websites as basic information sources and marketing tools for business partners, customers and the general public. In light of increased attention to corporate governance matters and recent SEC and stock exchange corporate governance requirements, public companies typically create within their corporate websites a separate page devoted to investor relations, and many companies also create separate pages devoted exclusively to corporate governance matters, such as information about the board of directors and committees.
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06.26.2006Document Retention - What You Need to Know NowUpdatesA carefully conceived and well-implemented document retention policy has long been an important component of an effective corporate compliance program. Recent events have made reviewing and updating corporate document retention policies a priority for most companies.
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06.21.2006Delaware Supreme Court's Disney Decision Affirms the Business Judgment Rule and Endorses Compensation Committee Best Practices — "Quantify. Discuss. Document."UpdatesIn the Delaware Supreme Court's recent opinion in the Disney case, Justice Jacobs provided better "best practices" advice for compensation committee decision making (and by analogy, board and other board committee decision making) than we may have seen in decades. The court also rejected the argument that making a decision in the absence of adequate information and deliberation amounts to bad faith.
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06.15.2006Third Time's a Charmer: Perkins Coie Announces Third Edition of The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and ExecutivesUpdatesPerkins Coie is pleased to announce the third edition of the most practical, plain English guide available for public company corporate governance in the post-Sarbanes-Oxley world: The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and Executives.
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05.03.2006Client Update: Corporate Political ActivityUpdatesFor some time, the federal campaign finance law has restricted the ways that corporations can encourage or direct political action, by executives and lobbyists, intended to promote company legislative objectives or enhance its goodwill. Of particular concern to the Federal Election Commission has been what is known as "corporate facilitation."
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04.19.2006United States Supreme Court Closes Loophole for Filing Class Action Securities Fraud Lawsuits in State CourtUpdatesIn a significant decision favorable to defendants in securities fraud lawsuits, Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 126 S. Ct. 1503 (2006), the United States Supreme Court has unanimously decided to close a loophole that plaintiffs' lawyers have used to bring securities fraud lawsuits in state court. This loophole existed as a result of how some appellate courts had interpreted the language of the Securities Litigation Uniform Standards Act of 1998 (SLUSA).
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04.10.2006More Relief for Smaller Public Companies? Advisory Committee Makes Sweeping RecommendationsUpdatesIn early 2006, the SEC's Advisory Committee on Smaller Public Companies issued an exposure draft of its "final report," which makes recommendations that would dramatically reduce the cost of Sarbanes-Oxley compliance for smaller issuers, including "scaling" SEC regulation for the smaller capitalization companies that represent over 80% of all public companies, but only 6% of total market capitalization, and a new private offering exemption. The Advisory Committee will send its report to SEC Chairman Cox on April 23, 2006.
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03.30.2006Sunlight for Executive Pay — SEC Proposes Substantial Changes to Executive Compensation and Related Disclosure Rules and Clarifies Current RulesUpdatesThe federal securities laws already require clear, concise and understandable disclosure about the amount and type of all compensation paid to chief executive officers and other highly compensated executives of public companies. In recent years widespread and increasing interest in executive pay and the perceived inadequacy of current disclosure spawned frequent front-page headlines and heated rhetoric from members of Congress and shareholder advocates.
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01.26.2006Hart-Scott-Rodino Reporting Thresholds to Increase Effective 2/17/06UpdatesThe Federal Trade Commission recently announced that the reporting thresholds under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 will be increased, effective February 17, 2006. The Act requires all parties to mergers or acquisitions that meet or exceed the Act's jurisdictional thresholds to notify the FTC and the Antitrust Division of the Department of Justice and wait a designated period of time before consummating the merger or acquisition. The 2000 amendments to the Act require the FTC to revise the Act's jurisdictional and filing fee thresholds annually, based on the change in gross national product. Certain related thresholds and limitation values in the H-S-R rules will also be adjusted. The increased thresholds will apply to all transactions that close on or after February 17, 2006.
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01.19.2006In the Penalty Box or Skating By? New Guidelines Shape SEC EnforcementUpdatesIn recent years the SEC has dramatically increased the size of civil penalties it seeks from companies accused of violating the federal securities laws. Critics questioned the SEC's lack of standards for determining such penalties and argued that the SEC's approach simply heaped additional punishment on the very same shareholders who were victimized by the company's violations.
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01.12.2006More Help for Smaller Public Companies — SEC Changes Periodic Reporting Deadlines and Creates Large Accelerated Filer CategoryUpdatesThe SEC recently approved final rules that create a new category of large accelerated filers and maintain current periodic reporting deadlines for smaller public companies. This Update summarizes the key highlights from the final rules and offers practical guidance.
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01.11.2006SEC Proposal Exempts Compensation Arrangements From the Tender Offer Best-Price RuleUpdatesThe Securities and Exchange Commission recently proposed amendments to its tender offer "best-price rule," which it adopted in 1986 to prevent discriminatory tender offers by requiring that the highest price paid to any security holder in a tender offer must be paid to all other tendering security holders. Several court decisions interpreting the SEC's best-price rule have created uncertainty about whether compensatory and other arrangements made with a target company's officers, employees, directors and shareholders in an acquisition structured as a tender offer will be deemed tender offer consideration that is subject to this rule.
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12.28.2005Valuing Private Company Stock for Compensation Purposes - Practical GuidanceUpdatesInternal Revenue Code Section 409A, along with recent changes in financial accounting rules, has significantly increased the focus of private companies on accurately valuing their common stock for purposes of granting options and other equity incentive awards. Section 409A has upped the ante by imposing severe tax consequences on individuals for certain stock-based compensation that does not comply with the new deferred compensation tax rules, including stock options granted with an exercise price that is less than the fair market value of the company's common stock on the grant date.
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12.20.2005Deadline Approaching for Several Transition Relief Amendments to Nonqualified Deferred Compensation PlansUpdatesThe deadline is rapidly approaching for amending nonqualified deferred compensation plans subject to Internal Revenue Code Section 409A to reflect certain transition relief provisions provided by IRS Notice 2005 1. If your plan has taken advantage of any of the following forms of transition relief, it must be amended by December 31, 2005.
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11.14.2005More Help for Smaller Public CompaniesUpdatesThe new compliance and disclosure requirements for internal control over financial reporting enacted by the SEC under Section 404 of the Sarbanes-Oxley Act of 2002 disproportionately burden smaller public companies because of the relatively fixed cost of designing effective controls and demonstrating they are in place. Recognizing this disparity, the SEC has sought guidance on how smaller companies can effectively implement and test their internal controls and on whether and how Section 404 requirements and deadlines should be revised for smaller companies.
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10.14.2005A Neer Miss for CFOs and CEOs — Federal Court Finds No Private Right of Action Under Sarbanes-Oxley Section 304UpdatesIn the first case to directly address the question, a federal district court has held that private parties have no right to enforce Section 304 of the Sarbanes-Oxley Act of 2002. Neer v. Pelino, No. 04-CV-04791-SD (E.D. Pa. Sept. 27, 2005). Instead, the court held that only the SEC can enforce Section 304.
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10.05.2005IRS Issues Section 409A Proposed Regulations - One-Year Extension for Many, but Not All, Deferred Compensation Compliance RequirementsUpdatesThe IRS has issued proposed regulations that expand the guidance available for complying with the deferred compensation tax rules of Section 409A of the Internal Revenue Code. Section 409A generally provides that amounts deferred under a nonqualified deferred compensation plan are currently includible in income if not subject to a substantial risk of forfeiture, unless the plan meets specified design and operational requirements. Failure to comply can result in significant federal income tax consequences, including a 20% additional tax.
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09.13.2005Too Fine a Point? Court Dismisses SEC Regulation FD EnforcementUpdatesA judge in the U.S. District Court for the Southern District of New York recently dismissed the SEC's first Regulation FD enforcement action to be tested in federal courts. In dismissing the action against Siebel Systems and two of its officers, the Court took the SEC to task for its overly aggressive enforcement of Regulation FD.
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09.09.2005SEC Adopts Major Securities Offering ReformUpdatesThe SEC recently approved final rules that significantly modify the registration, communications and offering processes under the Securities Act of 1933, as amended. The new rules will be effective December 1, 2005. The most significant changes include:
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08.26.2005Delaware Court — Disney Directors Breached "Aspirational Ideals" of Good Corporate Governance, but Not Their Fiduciary DutiesUpdatesIn early August 2005, the Delaware Court of Chancery issued its opinion after a widely publicized three-month trial in In re The Walt Disney Company Derivative Litigation, absolving Disney's directors of liability in connection with the 1995-1996 hiring and firing of former Disney president Michael Ovitz. Ovitz received a severance package of approximately $140 million after his unsuccessful 14-month tenure at Disney.
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08.18.2005SEC Clarifies Two Important Exemptions From Section 16(b) Short-Swing Profit LiabilityUpdatesThe Securities and Exchange Commission recently amended Rules 16b-3 and 16b-7 under the Securities Exchange Act of 1934, to clarify that Rule 16b-3 may be relied on to exempt officer and director securities transactions from Section 16(b) short-swing profit recovery, even if the transactions are not compensatory in nature, and Rule 16b-7 may be relied on to exempt stock reclassifications, even if they involve securities with different risk characteristics or change the percentage ownership of the holders.
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08.11.2005California Supreme Court Invalidates Contractual Waivers of Jury TrialsUpdatesIn a decision that broadens the right to a jury trial for parties in California, the California Supreme Court recently held that California courts cannot enforce predispute waivers of the right to a jury trial . The case, Grafton Partners L.P. v. Superior Court, No. S123344 (Cal. Aug. 4, 2005), applies retrospectively to all existing contracts governed by California law and will significantly affect dispute resolution efforts by parties to such contracts.
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07.01.2005U.S. Supreme Court Reverses Criminal Conviction of Arthur Andersen in Enron ScandalUpdatesIn a unanimous decision, the U.S. Supreme Court recently reversed Arthur Andersen's criminal conviction for violating a federal witness tampering statute by encouraging its employees to shred Enron documents pursuant to a document retention policy. Arthur Andersen LLP v. United States, 125 S. Ct. 2129, 2005 WL 1262915 (U.S. May 31, 2005). In doing so, the Supreme Court avoided direct evaluation of the conduct that led to the accounting firm's conviction.
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06.30.2005Delaware Court Rejects $2.9 million Settlement Agreement in Executive Compensation and Corporate Waste Case: in re The Fairchild Corporation Shareholder Derivative LitigationUpdatesThe Delaware Court of Chancery recently rejected as inadequate a proposed settlement in a derivative action brought against directors and officers of the Fairchild Corporation. This Update highlights the key issues in the Court's rejection and offers practical guidance.
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06.15.2005New Rules Force Research Analysts to Stay Home When Investment Bankers Hit the RoadUpdatesThe SEC recently approved new rules adopted by the New York Stock Exchange and National Association of Securities Dealers to limit conflicts of interest between the selling and research arms of investment banks. Under these rules, research analysts at investment banks may not participate in road show meetings relating to an investment banking services transaction or communicate with current or prospective customers while investment banking personnel or company management is present.
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05.24.2005One Size Fits All Is Good for Socks, Bad for SOX – New Guidance on Section 404 Internal Control ReportsUpdatesThe Staff of the Securities and Exchange Commission, the SEC itself and the Public Company Accounting Oversight Board (PCAOB) each issued separate statements last week with guidance for companies implementing Section 404 of the Sarbanes-Oxley Act of 2002. This Update highlights some of the key concepts emphasized by the SEC and the PCAOB in last week's guidance and provides practical advice.
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05.13.2005Advising the Board of Directors in Acquiring a BusinessUpdatesAttorneys in the Perkins Coie Corporate Finance Group recently authored an article titled "Advising the Board of Directors in Acquiring a Business" that was published in Insights: the Corporate & Securities Law Advisor. Authorizing significant acquisitions can create legal risks for directors, and directors who authorize acquisitions that prove unsuccessful can be subject to litigation.
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04.22.2005Supreme Court Decision Should Help Discourage Abusive Securities Litigation Cases: Dura Pharmaceuticals Inc. v. Broudo Rejects Ninth Circuit's Position on Loss Causation for Securities Fraud ClaimsUpdatesThe pattern is familiar. A public company makes some positive announcements about a product. After some time passes, the company announces bad news about the product, leading to a decline in the stock price.
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04.15.2005SEC Delays Compliance Dates for Stock Option Expensing Under FAS 123R and Issues GuidanceUpdatesThe SEC has adopted a new rule that delays required stock option and other share plan expensing under the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (FAS 123R), for most public companies until their first fiscal year beginning after June 15, 2005; the compliance date for small business issuers is their first fiscal year beginning after December 15, 2005.
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04.11.2005Don't "Go with the Flow" - In Flowserve, SEC Brings First Regulation FD Enforcement Action for Reaffirmation of Earnings GuidanceUpdatesIn March 2005 the SEC announced its settlement of a Regulation FD enforcement action against Flowserve Corporation, the company's CEO and its director of investor relations (IR). In the Flowserve Regulation FD enforcement action, the SEC has, for the first time: Asserted that a company violated Regulation FD by affirming, as opposed to announcing changes to, previous earnings guidance; and Included enforcement against an IR professional.
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03.25.2005Help May Be on the Way for Smaller Public CompaniesUpdatesThe SEC is forming an Advisory Committee on Smaller Public Companies. The Committee will assess the effect of the Sarbanes-Oxley Act and other securities regulations on smaller public companies and will recommend appropriate changes to the SEC, based on the following objectives: protecting investors; examining whether the current regulations impose costs on smaller companies proportionate to their benefits; identifying methods to minimize costs and maximize benefits; and facilitating capital formation by smaller companies.
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03.08.2005SEC Releases Annual Reporting Reminders: Division of Corporation Finance Staff AlertUpdatesThe SEC's Division of Corporation Finance has released a Staff Alert for companies completing their upcoming annual reports on Form 10-K that highlights existing requirements and reiterates previously articulated positions. Although the Staff Alert is not a rule, regulation or an official statement of the SEC, and was not approved by the Commission, it provides valuable insight into the staff's views on the annual reporting requirements and signals where the staff may focus attention.
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03.03.2005Relief for Smaller Public Companies and Foreign Private Issuers on Sarbanes-Oxley Section 404 Compliance: SEC Extends Compliance Deadlines for Implementation of Internal Control Over Financial Reporting RequirementsUpdatesThe SEC has again extended the compliance dates for its "internal control" regulations implementing Section 404 of the Sarbanes-Oxley Act as they apply to non-accelerated filers (public equity float of less than $75 million) and foreign private issuers. Companies in these groups will now be required to comply with these requirements for the first time for fiscal years ending on or after July 15, 2006.
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02.11.2005Board Self-Evaluations: Do the Benefits Outweigh the Potential Pitfalls?UpdatesNew York Stock Exchange listing standards require boards of listed companies to conduct self‑evaluations at least annually to determine whether the board and its committees are functioning effectively. Although Nasdaq Marketplace Rules are silent on board self‑evaluations, a growing number of companies are considering such evaluations as a matter of best practices.
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02.08.2005Sentencing Guidelines on Compliance Programs – A "Silk Purse" for Corporate DirectorsUpdatesWhat is a director's duty for corporate legal compliance? Recent amendments to the United States Organizational Sentencing Guidelines can help directors and their advisors answer that important question.
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01.19.2005Happy New Year? Recent Securities Litigation Settlements Highlight Increasing Risks to Corporate DirectorsUpdatesThe Sarbanes-Oxley Act and recent changes in Securities and Exchange Commission and stock exchange requirements have imposed ever greater responsibilities on corporate directors. As these additional responsibilities expose directors to increasing risks, companies have struggled to attract and retain qualified candidates to serve as independent directors.
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12.28.2004Treasury and IRS Issue First Round of Guidance on New Tax Rules for Deferred CompensationUpdatesOn December 20, 2004, the Treasury Department and the Internal Revenue Service issued Notice 2005-1 providing the first installment of guidance for the deferred compensation provisions of the American Jobs Creation Act of 2004, which are contained in new Section 409A of the Internal Revenue Code.
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12.27.2004Alan Beller, Director of the SEC's Division of Corporation Finance, Shares Views on Disclosure, Internal Control Attestations and 1933 Act ReformUpdatesIn late November 2004, Alan Beller attracted a packed audience of attentive securities lawyers, in-house company counsel and accountants attending the Federal Regulation of Securities Subcommittee meeting at the American Bar Association's Business Section Fall Meeting in Washington, D.C. The topic? The latest on current and emerging securities law developments.
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12.21.2004FASB Issues Final Statement Requiring Stock Option ExpensingUpdatesThe FASB has published FASB Statement No. 123 (revised 2004), Share-Based Payment, which requires that the compensation cost relating to stock options, stock appreciation rights, restricted stock or units, employee stock purchase plans and other share-based payment transactions, measured based on the fair value, be recognized in financial statements. FAS 123(R) replaces FAS 123, Accounting for Stock-Based Compensation, and supersedes APB 25, Accounting for Stock Issued to Employees.
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12.08.2004SEC Gives Smaller Accelerated Filers Extra Time to File Sarbanes-Oxley Internal Control ReportsUpdatesThe SEC has issued an exemptive order granting smaller accelerated filers up to an additional 45 days to include in their annual reports the management's report on internal control over financial reporting and the related auditor's report on management's assessment of internal control over financial reporting, both of which are required under SEC rules implementing Section 404 of the Sarbanes-Oxley Act of 2002. Although this postponement does not, for example, apply to Fortune 100 companies, like General Electric or Procter & Gamble, its practical effect will be to provide some additional time for many small- and mid-cap companies, including Nasdaq-listed technology and biotech companies, to complete management's assessment of internal control over financial reporting and for their auditors to complete their reports on management's assessment.
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11.23.2004NYSE Amends Listing Standards to Clarify Corporate Governance RequirementsUpdatesThe Securities and Exchange Commission recently approved and made effective amendments to the New York Stock Exchange corporate governance standards, Section 303A of the NYSE Listed Company Manual, primarily to clarify standards that were adopted last year. This Update summarizes the amendments and offers practical guidance.
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11.19.2004SEC Postpones Final Acceleration of Periodic Report Filing Dates for Accelerated FilersUpdatesThe SEC has postponed for one year the final phase-in period for acceleration of the due dates of quarterly and annual reports required to be filed under the Securities Exchange Act of 1934 by "accelerated filers." The SEC has also conformed requirements concerning financial statements contained in registration statements and proxy statements to apply the postponed phase-in period.
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10.29.2004SEC Proposes Securities Offering ReformUpdatesAt an open meeting on October 26, 2004, the SEC announced proposals that would result in significant changes to the registered offering process under the Securities Act of 1933, as amended. The SEC proposed changes in three areas: communications related to registered securities offerings, liability timing issues and improved shelf registration processes. The SEC has not yet released the text of the proposed rules, which release will trigger commencement of the 75-day comment period.
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10.26.2004The End of "Other Information" as we know it — Changes to Form 10-Q Eliminate Item 5(a) for Voluntary Reporting of Other InformationUpdatesThe SEC release adopting the new Form 8-K rules also included revisions to Form 10-Q. Calendar-year companies preparing their first quarterly reports on Form 10-Q since the effectiveness of these new rules should be aware that the revisions have consequences relating to the voluntary reporting of information not otherwise required to be reported on Form 10-Q.
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10.25.2004Congress Restores Deductibility of State and Local Sales and Use TaxesUpdatesOn October 22, 2004, President Bush signed into law the American Jobs Creation Act of 2004 (the "Act"). The Act partially restores the federal income tax deduction for state and local sales and use taxes that was eliminated by Congress in 1986.
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10.22.2004Governor Schwarzenegger Signs Revised California Disclosure Act – AB 1000 Terminates Some Conflicts With SEC Rules, but Continues to Require Filings From Public Companies Doing Business in CaliforniaUpdatesCalifornia has enacted AB 1000, effective September 27, 2004, which amends California's Corporate Disclosure Act to clarify the requirements of the original Act and conforms many of its provisions to SEC reporting requirements for public companies. California adopted the original Act in the aftermath of Sarbanes-Oxley to require public companies doing business in California to file certain corporate data with the California Secretary of State's office.
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10.22.2004President Bush Signs Bill Providing Tax Relief to U.S. Manufacturers and Temporary Tax Incentive to Reinvest Foreign Earnings in the United StatesUpdatesToday, President Bush signed the American Jobs Creation Act of 2004 (H.R. 4520) into law. The $145 billion corporate tax package contains a range of international tax reforms, corporate tax breaks and tax incentives that are intended to make United States manufacturing, service and high-technology businesses and workers more competitive and productive both in the United States and abroad.
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10.20.2004Deferred No Longer? Congress Imposes Significant New Restrictions on Deferred CompensationUpdatesCongress recently approved the American Jobs Creation Act of 2004 (H.R. 4520), which includes provisions that impose significant new restrictions on deferred compensation. If these restrictions are not satisfied, deferred compensation amounts are taxable when vested and subject to tax penalties. President Bush is expected to sign the Act, but as of October 19th has not done so. This Update highlights the Act's key changes to deferred compensation requirements and offers practical guidance.
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10.18.2004United States Supreme Court Hears Challenges to Federal Sentencing GuidelinesUpdatesBusinesses often turn to the United States Sentencing Guidelines for guidance in designing effective corporate compliance and ethics programs. The relevant parts of the guidelines, known as the Organizational Sentencing Guidelines, include detailed criteria for effective corporate compliance and ethics programs.
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10.13.2004SEC Demands Full Disclosure of Executive CompensationUpdatesAn SEC enforcement action against General Electric and an ongoing SEC investigation of Tyson Foods reflect increased SEC scrutiny of disclosure relating to executive compensation. This Update summarizes the enforcement action and the pending investigation and offers practical guidance.
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09.17.2004Keeping Your Options Open: Highlights From the IRS Final Regulations on Incentive Stock Options and Practical GuidanceUpdatesIn August 2004, the Internal Revenue Service issued final regulations relating to incentive stock options (ISOs). Although the final regulations are similar to the proposed ISO regulations published last year, the final regulations contain important guidance and changes relating to a number of issues affecting ISOs.
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09.16.2004The Impact of Sarbanes-Oxley on Private CompaniesUpdatesThe Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") is an assortment of reforms designed to protect investors by imposing financial reporting, disclosure and corporate governance requirements on public companies. Sarbanes-Oxley was enacted with Enron and WorldCom – two large public companies – in mind.
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09.08.2004Securities and Corporate Governance Litigation Group Update: Seventh Circuit Limits Safe Harbor for Forward-Looking StatementsUpdatesThe Private Securities Litigation Reform Act of 1995 established a safe harbor for forward-looking statements. A company cannot be liable for making a forward-looking statement if, among other factors, the statement "is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement."
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08.31.2004Improving Board Decisionmaking in Post-Sarbanes-OxleyUpdatesEnron, WorldCom, and similar corporate failings were economic disasters. To the general public, and to Congress, they evidenced ethical lapses or failures of board oversight.
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08.23.2004Amended Form 8-K: Practical Guidance on Reporting Material Agreements to Help You Meet the Real-Time Reporting ChallengeUpdatesThe SEC's recent amendments to Form 8-K, which are effective for reportable events that occur on or after August 23, 2004, expand the number of reportable events and accelerate the filing deadline for most items to four business days. For events that occur prior to August 23, 2004, companies should analyze their reporting obligations using prior Form 8-K and report information as required under that version of the form (although Form 8-Ks filed on or after August 23 must use the new item numbers, even if the information reported corresponds to the requirements of the prior Form 8-K).
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07.22.2004Securities and Corporate Governance Litigation Group Update: Delaware Supreme Court Clarifies Distinction Between Derivative and Direct Stockholder ClaimsUpdatesIn recent years there has been an upsurge in the number of stockholder derivative lawsuits. This type of lawsuit differs fundamentally from a securities class action.
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07.08.2004When Not to File: HSR's "Investment Only" Exemption—Is an Important Exemption Narrowing?UpdatesThe recent United States v. Manulife Financial Corporation case is an important reminder of the traps for the unwary under the "investment only" exemption under the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). The case, which was recently settled by Manulife, shows how narrowly the antitrust enforcement agencies (the Federal Trade Commission and the U.S. Department of Justice) construe this exemption. Understanding the scope of the exemption is important as M&A activity continues to increase.
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04.20.2004Recent NASD Rule 2790 Restricts the Purchase and Sale of Securities from Initial Public Offerings by MembersUpdatesWhile the Securities and Exchange Commission and self-regulatory organizations like the stock exchanges and Nasdaq have been preoccupied over the past two years with disclosure and governance reforms mandated by the Sarbanes-Oxley Act of 2002, a recently adopted National Association of Securities Dealers rule, Rule 2790, is designed to help reform the initial public offering market, which is showing increasing signs of life. The new NASD rule generally prohibits NASD members from selling equity securities from IPOs to any account in which NASD members, broker-dealers or other "restricted persons" have a beneficial interest. Compliance with the rule became mandatory on March 23, 2004.
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04.02.2004MD&A Trends and Uncertainties—What Should a Company Disclose?UpdatesIn the SEC's recent focus on the quality of management's discussion and analysis, or MD&A, disclosure, it has re-emphasized the need to identify and analyze material trends, demands, commitments, events and uncertainties that could impact a company's liquidity, financial condition or operating results. This disclosure, the SEC believes, is critical to understanding a company's reported financial information and the extent to which reported information is indicative of future results or financial condition.
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03.30.2004SEC Amends Form 8-K to Expand Required Disclosure and Accelerate Filing DeadlineUpdatesThe SEC has adopted amendments to Form 8-K in response to the "real time issuer disclosure" mandate in Section 409 of the Sarbanes-Oxley Act of 2002. Amended Form 8-K is intended to provide investors with more and faster disclosure of important corporate events.
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03.24.2004Securities and Corporate Governance Litigation Alert: Delaware Chancery Court Issues Ruling on Corporate Opportunity Doctrine In re eBay Inc. Shareholders LitigationUpdatesOn January 23, 2004, Chancellor Chandler of the Delaware Court of Chancery held that eBay directors may be liable for usurping a corporate opportunity. In this derivative action, eBay shareholders allege that certain of eBay's directors improperly received allocations of shares in hot IPOs being underwritten by Goldman Sachs in order to induce such eBay directors to steer business to Goldman Sachs.
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03.04.2004SEC Extends Dates for Implementation of Sarbanes-Oxley Section 404: Compliance for Internal Control Over Financial ReportingUpdatesThe SEC is extending the compliance dates for its regulations relating to "internal control" rules implementing Section 404 of the Sarbanes-Oxley Act as they apply to selected groups of companies. As announced on February 24, 2004: Accelerated filers with fiscal years ending between June 14, 2004 and November 14, 2004 do not need to comply with these requirements for the current fiscal year, as they were previously required to do.
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02.19.2004SEC Issues Interpretive Guidance on Item 201(d) Equity Compensation Plan Information Table and Item 601(b) Filing RequirementsUpdatesIn response to an American Bar Association request for guidance, the SEC recently issued interpretive guidance and clarifications addressing equity compensation plan disclosure issues under Regulation S-K, Items 201(d) and 601(b). The SEC's interpretive guidance and clarifications included: Guidance on aggregation of narrative description and filing of non-shareholder-approved individual equity compensation arrangements; Treatment of a non-shareholder-approved amendment to add more securities to a shareholder-approved plan; Disclosure required for assumed equity compensation plans; and Proper location for the equity compensation plan information disclosure required by Item 201(d).
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02.17.2004Securities and Corporate Governance Litigation Alert: Court Rules That Insurance Carrier May Rescind D&O Insurance Policy After Securities LawsuitUpdatesThe stock market bubble and crash from 1998 to 2001 and the ongoing stream of corporate scandals like Enron, WorldCom and Tyco have put corporate governance under the microscope. The actions of business leaders are now at the lowest levels of trust and highest levels of scrutiny in recent memory.
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01.14.2004SEC Urges Management to Pick Up the Drafting Pen: MD&A Drafting Tips Based on New SEC Interpretive ReleaseUpdatesEffective December 29, 2003, the Securities and Exchange Commission issued detailed interpretive guidance regarding disclosure in Management's Discussion and Analysis (MD&A), developed from the SEC's recent experiences, including enforcement actions and its 2002 review of the annual reports and MD&A disclosure of the Fortune 500 companies. We previously provided a checklist based on the SEC's preliminary review of those filings.
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12.31.2003SEC Adopts Changes to Rule 10b-18 Stock Repurchase "Safe Harbor"UpdatesThe SEC recently amended the stock repurchase safe harbor rule under Rule 10b-18 of the Securities Exchange Act of 1934, which provides an issuer with a safe harbor from liability for repurchases of its common stock if the issuer complies with the rule’s manner, timing, price and volume conditions. The amendments to Rule 10b-18 simplify and update the safe harbor provisions to reflect market changes that have developed since Rule 10b-18’s adoption in 1982, and require more rapid and regular disclosure of issuer repurchases.
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12.10.2003Amendments to Federal Sentencing Guidelines Increase Risks and Highlight Areas of Concern for Corporate Compliance ProgramsUpdatesJudges use the Federal Sentencing Guidelines to determine sentences for individuals and corporations convicted of federal crimes. Corporate managers and their advisors can use the Sentencing Guidelines to identify areas of risk, focus compliance programs and underscore to employees the consequences of improper behavior.
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12.08.2003SEC Proposes New Rules Granting Shareholders Greater Opportunity to Nominate DirectorsUpdatesThe Securities and Exchange Commission has proposed a highly controversial set of rules granting shareholders greater ability to nominate directors through a company's proxy process by requiring a company to include in its proxy materials information on director candidates nominated by eligible shareholders. Many commentators immediately criticized the proposed rules, citing the potential to turn annual meetings into contested elections, divert management's attention and corporate resources from the company's business, and allow special interest groups to elect directors who may not represent the best interests of all the company's shareholders.
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12.04.2003Happy New Year? The SEC Adopts New Rules Requiring Nominating Committee DisclosureUpdatesLast week the SEC released final rules – effective January 1, 2004 – that require public companies to disclose nominating committee procedures and procedures for shareholder communications with directors. These new rules harmonize with the recently finalized NYSE and Nasdaq nominating committee requirements and represent the SEC's latest step in its ongoing effort to make board operations more transparent to shareholders.
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12.01.2003SEC Adopts Final Nasdaq Corporate Governance RulesUpdatesThe Securities and Exchange Commission recently approved the Nasdaq Stock Market's corporate governance rules, which finalize Nasdaq corporate governance proposals made over the last 18 months. The most significant changes from Nasdaq's most recent corporate governance rule proposals include: Amending the "bright line" tests for director independence, including: A narrower definition of "family member," and Expanded application of the relationships that preclude a finding of independence to apply not only to directors, but also to family members.
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12.01.2003SEC Approves Final NYSE Corporate Governance StandardsUpdatesThe Securities and Exchange Commission recently approved the New York Stock Exchange's corporate governance listing standards, which finalize NYSE corporate governance proposals made over the last 18 months. The most significant changes from NYSE's most recent proposal (in April 2003) include: Accelerating of the effectiveness dates relating to board and committee independence requirements.
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11.17.2003Perkins Coie Announces Second Edition of The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and ExecutivesUpdatesPerkins Coie is pleased to announce the publication of the post-Sarbanes-Oxley second edition of The Public Company Handbook: A Corporate Governance and Disclosure Guide for Directors and Executives. Increasing Importance of Director Continuing Education We have designed this practical and easy-to-digest guide for directors and executives of public companies. This book has a particular relevance at a time when both the NYSE and Nasdaq, as part of their corporate governance initiatives, strongly encourage – some say mandate – continued director education.
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10.22.2003SEC and DOJ Clarify Sarbanes-Oxley: Section 906 Certifications Not Required for Forms 6-K, 8-K and 11-K and Section 404 Not Applicable for Form 11-KUpdatesEarlier this month, Allan Beller of the Securities and Exchange Commission and Mark Corallo of the Department of Justice announced that neither current reports on Forms 6-K and 8-K nor employee benefit plan reports on Form 11-K are required to include the certifications mandated by Section 906 of the Sarbanes-Oxley Act of 2002. This announcement was made via telephone interviews and teleconference, and we do not know whether or when this conclusion will be announced in writing.
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10.16.2003SEC Staff Releases Report on Hedge FundsUpdatesOn September 29, 2003, following a 16-month study, the SEC staff released a report containing recommendations for changing the regulatory framework of the largely unregulated hedge fund industry. The staff's recommendations are not likely to result in rulemaking that would materially affect a hedge fund's trading strategies, and the SEC has not yet established a time line for the rule proposal that will inevitably result.
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09.23.2003SEC Clarifies (and Tightens) Requirements for Pre-Approval Policies for AuditUpdatesIn publishing responses to a series of frequently asked questions (FAQ), the SEC's Office of the Chief Accountant has provided guidance about pre-approval policies and other matters relating to the SEC's auditor independence rules adopted in January 2003. Those rules became effective in May 2003 and, among other things, require a company's audit committee to pre-approve all audit and non-audit services provided by the company's auditors.
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09.16.2003Silence - and a Poker Face - are Golden: SEC's Schering-Plough Enforcement Action Shows SEC's Enforcement Focus on Nonverbal CuesUpdatesThe SEC has followed through on its promise to continue to focus enforcement efforts on Regulation FD and selective disclosure with its September 9, 2003 charges against Schering-Plough Corporation and its former CEO, Richard J. Kogan. In the most subtle of its FD enforcement actions, the SEC brought charges arising from both verbal and nonverbal selective disclosure of material, nonpublic information about Schering's earnings.
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08.20.2003SEC Proposes New Disclosure Requirements Related to Director Nominations and Shareholder Communications With DirectorsUpdatesOn August 8, 2003, the Securities and Exchange Commission (SEC) proposed changes to the proxy rules that would expand disclosure regarding (a) the nominating committee and the process of nominating directors and (b) the process by which shareholders are able to communicate with a company's board of directors. The proposals do not require substantive changes by a company with respect to its nomination or shareholder communication processes; rather the proposals require disclosure of the details of the processes.
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07.18.2003SEC's Division of Corporation Finance Recommends Major Changes to Proxy Rules Concerning the Nomination and Election of DirectorsUpdatesOn July 15, 2003, the Securities and Exchange Commission (SEC) released a report prepared by its Division of Corporation Finance recommending major changes to SEC proxy rules relating to the nomination and election of directors. For the first time, Corporation Finance is recommending that shareholders be provided access to company proxy materials to nominate directors.
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07.07.2003Revisiting the Regulation of Non-GAAP Financial Information and Disclosure of Earnings Information: The SEC Publishes GuidanceUpdatesThe Securities and Exchange Commission (SEC) recently responded to a variety of Frequently Asked Questions (FAQ) regarding Regulation G and related rules (in effect since March 28, 2003).
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06.26.2003Delaware Court Warns Directors and Officers on Oversight of Executive Compensation: In re The Walt Disney Company Derivative LitigationUpdatesOn May 28, 2003, the Delaware Court of Chancery issued a ruling that could expose directors of The Walt Disney Company (Disney) to personal liability for asserted breaches of their fiduciary duties in the hiring and subsequent termination of Michael Ovitz as Disney president—decisions that resulted in an alleged $140 million payout for a year's work.
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06.26.2003Practical Guidance on Section 302 and Section 906 Certifications From the SEC's Final Rules ReleaseUpdatesOn June 5, 2003 the SEC released its final rules amending the certification requirements under Sections 302 and 906 of the Sarbanes-Oxley Act. These final rules require companies to include the Section 302 and Section 906 certifications as exhibits.
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06.26.2003SEC Adopts Final Rules Relating to Management's Report on Internal Control Over Financial ReportingUpdatesOn June 5, 2003, the Securities and Exchange Commission (SEC) posted its final rules for management's report on "internal control over financial reporting" and the related "attestation" by the issuer's outside auditors. Of the many detailed features of Sarbanes-Oxley and its implementing rules, few strike non-accountants as more technical and obscure than those relating to "internal controls."
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05.30.2003Section 404 Internal Controls and Section 302/906 Certifications: SEC Adopts Final RulesUpdatesThe Securities and Exchange Commission (SEC) voted at its open meeting on Tuesday to adopt final "internal control" rules implementing Section 404 of the Sarbanes-Oxley Act. The SEC also voted to adopt final rules regarding Section 302 and 906 certification of disclosures in periodic reports.
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05.28.2003Insiders Must Begin Electronic Filing and Issuers Must Begin Website Posting of Section 16 Forms 3, 4 and 5 by June 30, 2003UpdatesIn early May, the Securities and Exchange Commission adopted final rules that require, no later than June 30, 2003:
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05.15.2003Whistleblower Provisions of the Sarbanes-Oxley Act - Some Practical ConsiderationsUpdatesThe Sarbanes-Oxley Act of 2002 contains two very different provisions addressing corporate "whistleblowers." This Update describes both:
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05.07.2003NYSE Amends Corporate Governance Rule ProposalsUpdatesOn April 4, 2003, the New York Stock Exchange (NYSE) amended and replaced its August 16, 2002 and March 12, 2003 proposed corporate governance listing standards. The SEC is currently soliciting comments on the proposed rules, which may become effective as early as mid-May 2003. Material changes include:
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05.05.2003SEC Issues Final Rule to Implement Audit Committee Requirements of Section 301 of Sarbanes-OxleyUpdatesThe SEC has adopted a final rule to implement the audit committee requirements of Section 301 of the Sarbanes-Oxley Act of 2002 (Sarbanes). The new Securities Exchange Act rule, Rule 10A-3, directs NYSE, Nasdaq and other national securities exchanges or associations (Exchanges) to require listed issuers to comply with audit committee requirements relating to:
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04.30.2003NASDAQ Refines Director and Committee Rule ProposalsUpdatesThe Nasdaq Stock Market recently issued several revised rule proposals regarding director independence, audit committee composition and function, and related corporate governance issues. This Update summarizes these proposals, which include only a few changes from the original rule proposals discussed in our October 18, 2002 Update.
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04.22.2003Current Issues Checklist Based on Recent 10-K Filing Season and SEC's Fortune 500 ReportUpdatesThe SEC's 2002 "Fortune 500" review of annual reports, coupled with our and our clients' recent 10-K filing season, indicates that the SEC will continue to focus on the following critical disclosure areas in the coming year's periodic reports:
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04.16.2003Document Retention and Destruction Post-Arthur Andersen: What Can You Destroy?UpdatesOn October 16, 2002, the former Big Five accounting firm, Arthur Andersen, LLP, received the maximum criminal penalties - a $500,000 fine and five years' probation - for destruction of documents relating to its client, Enron. Why should this concern you? All companies must and do destroy documents.
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04.14.2003NASDAQ Eases Delisting Risk for Minimum Bid Price NoncomplianceUpdatesIn January 2002, Nasdaq adopted a "pilot program" offering relief for noncompliance with minimum bid price requirements for continued listing on the Nasdaq SmallCap Market. The pilot program lengthens the compliance or "grace" periods for Nasdaq-listed issuers whose shares trade below $1 per share and face the possibility of delisting.
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03.27.2003NYSE Amends Proposals Regarding Director IndependenceUpdatesThe New York Stock Exchange (NYSE) submitted amended and restated listing standards proposals relating to director independence to the Securities and Exchange Commission (SEC) on March 12, 2003. The amended and restated proposals:
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03.25.2003SEC Proposes Amendments to CEO and CFO Certifications Under Sarbanes-OxleyUpdatesThe SEC recently proposed amendments that would require companies to provide the officer certifications under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as exhibits to periodic reports. Importantly, the SEC also indicated that Section 906 certifications should be provided as exhibits to periodic reports pending the adoption of final rules.
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02.14.2003IRS Issues Proposed Regulations Providing Guidance on the Treatment of Noncompensatory Partnership OptionsUpdatesThe IRS has issued proposed regulations under Sections 721 and 704(b) of the Internal Revenue Code regarding the federal income tax treatment of noncompensatory options or warrants issued by a partnership. The proposed regulations generally provide that no gain or loss will be recognized by either the issuing partnership or the option holder on issuance or exercise of the option. This treatment is also applicable to convertible debt and convertible preferred equity of a partnership. The proposed regulations do not address the treatment of compensatory options issued by a partnership.
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02.14.2003SEC Issues Final Rule Requiring Enhanced MD&A Disclosure of Off-Balance Sheet Arrangements and Aggregate Contractual ObligationsUpdatesThe Securities and Exchange Commission (SEC) has adopted final rules requiring public companies to include in Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A):
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02.14.2003Update on President Bush's Dividend Exclusion ProposalUpdatesOn January 7, 2003, President Bush, as part of his overall economic stimulus package, announced a proposal that would, among other things, exclude dividends from taxable income, (the "Proposal"). Following this announcement, on January 14, the Treasury Department published a summary fact sheet explaining the Proposal and highlighting how it would stimulate economic growth.
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02.12.2003SEC Issues Final Rule Requiring "Up-the-Ladder" Reporting for Attorneys; Extends Comment Period Regarding "Noisy Withdrawal" Requirement and Proposes AlternativeUpdatesThe SEC has adopted a final rule implementing Section 307 of the Sarbanes-Oxley Act of 2002. Section 307 directs the SEC to issue a rule addressing minimum ethical standards for attorneys who appear and practice before the SEC representing issuers.
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02.05.2003Financial Experts and Codes of Ethics: SEC Adopts More Realistic Final RulesUpdatesIn a substantial departure from its proposed "financial expert" definition, the SEC has adopted a more realistic final definition of "audit committee financial expert." The SEC final rules adopted pursuant to Sections 406 and 407 of the Sarbanes-Oxley Act of 2002 will require a public company to disclose, for fiscal years ending on or after July 15, 2003:
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02.05.2003SEC Issues Final Rules Governing Non-GAAP Financial InformationUpdatesThe Securities and Exchange Commission (SEC) has issued final rules for public companies' disclosure of non-GAAP financial measures. The new rules, which implement Sections 401(b) and 409 of the Sarbanes-Oxley Act, adopt new "Regulation G," and amendments to Regulation S-K and Form 8-K. Under these new rules a company must:
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02.04.2003SEC Finalizes Rules Prohibiting Insider Trading During Pension Fund Blackout PeriodsUpdatesOn January 28, 2003, the SEC published final rules implementing Section 306(a) of the Sarbanes-Oxley Act of 2002, which generally prohibits insider trading during pension plan blackout periods. These rules became effective on January 26, 2003; however, the requirement to file notices of blackout periods with the SEC on Form 8-K is not effective until 60 days after publication of the rules in the Federal Register. For blackout periods occurring between January 26, 2003 and February 25, 2003, reporting companies should furnish blackout notices to directors and executive officers as soon as reasonably practicable. Blackout notices are not required for currently effective blackout periods that started before January 26, 2003.
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01.29.2003IRS Issues Temporary Regulations Permitting Mergers Into Limited Liability Company Subsidiaries to Qualify as Tax-Free Statutory MergersUpdatesThe IRS has issued temporary regulations that treat the merger of a target corporation into a wholly owned limited liability company (an "LLC") of an acquiring corporation as a tax-free reorganization described under Internal Revenue Code Section 368(a)(1)(A) (a "direct merger"), provided the shareholders of the target corporation receive stock in the acquiring corporation sufficient to satisfy the judicially created "continuity of interest" requirement. The new rules treat the transaction as if the target corporation merged directly into the acquiring corporation. In the past, there was considerable uncertainty as to whether this transaction would qualify as a tax-free reorganization, except in narrow circumstances.
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01.18.2003SEC Proposes Rules to Implement Sarbanes-Oxley's Audit Committee Independence RequirementsUpdatesLast week, the SEC released proposed rules to implement the audit committee independence and whistleblower provisions of Section 301 of the Sarbanes-Oxley Act of 2002. Sarbanes-Oxley (Sec. 301) requires the SEC to adopt final rules by April 26, 2003, directing all national securities exchanges and national securities associations ("SROs"), including NYSE and Nasdaq, to prohibit the listing of any security of an issuer that is not in compliance with the audit committee requirements set out in Section 301. The proposed rules cover:
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01.14.2003SEC Proposes Rules Requiring Electronic Filing and Web Site Posting of Section 16(a) ReportsUpdatesThe Securities and Exchange Commission has proposed rules that will require public companies' officers, directors and principal shareholders who are subject to Section 16(a) of the Securities Exchange Act of 1934 to electronically file their Forms 3, 4 and 5 beneficial ownership reports. The rules will also require public companies to post these reports on their Web sites.
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01.10.2003SEC Proposes Safe Harbor to Exclude Certain Research and Development Companies From Investment Company Act of 1940UpdatesThe SEC recently proposed Rule 3a-8 under the Investment Company Act of 1940 (1940 Act), which would exempt certain bona fide research and development companies from investment company status under the 1940 Act. Proposed Rule 3a-8:
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01.06.2003SEC Proposes Amendments to Rule 10b-18 Stock Repurchase "Safe Harbor"UpdatesThe Securities and Exchange Commission has proposed amendments to the timing, price and volume conditions of Rule 10b-18, the Exchange Act rule that governs public companies' repurchases of their common stock. The proposed changes provide companies with more flexibility in their stock buybacks, especially in times of extreme market disturbance.
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12.16.2002SEC Proposes Requiring "Up-the-Ladder" Reporting and "Noisy Withdrawal" for AttorneysUpdatesThe SEC has proposed a rule implementing Section 307 of the Sarbanes-Oxley Act of 2002. Section 307 directs the SEC to issue a rule addressing minimum ethical standards for attorneys who practice and appear before the SEC representing issuers.
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12.11.2002SEC Brings First Enforcement Actions Under Regulation FDUpdatesThe Securities and Exchange Commission announced on November 25, 2002, its first enforcement actions related to violations of Regulation FD. The SEC imposed cease-and-desist orders on Raytheon Company and its CFO, Siebel Systems, Inc., and Secure Computing Corporation and its CEO.
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11.19.2002SEC Proposes Rule Requiring Enhanced MD&A Disclosure of Off-Balance Sheet Arrangements, Contractual Obligations and Contingent Liabilities and CommitmentsUpdatesOn November 4, 2002, the Securities and Exchange Commission proposed an amendment to Item 303 of Regulation S-K that would require a registrant to include in Management's Discussion and Analysis of Financial Condition and Results of Operations:
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11.18.2002SEC Proposes Rules Governing Non-GAAP Financial InformationUpdatesOn November 5, 2002, the Securities and Exchange Commission (SEC) proposed new "Regulation G," as well as amendments to certain existing rules, that would require public companies to provide specific disclosure when releasing proforma or non-GAAP financial information, including reconciling that information to GAAP.
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11.13.2002SEC Proposes Rules Regarding Restrictions on Insider Trading During Pension Fund Blackout PeriodsUpdatesSection 306(a) of the Sarbanes-Oxley Act of 2002 prohibits insider trading during pension fund blackout periods. During an open meeting on October 30, 2002, the SEC discussed proposed rules clarifying the scope and operation of the statutory trading restrictions. The SEC then posted the proposed rules on its Web site on November 7, 2002, and will accept comments for 30 days following publication of the proposed rules in the Federal Register.
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11.06.2002New Disclosure Requirements for Publicly Traded Companies Doing Business in California: The California Corporate Disclosure ActUpdatesOn September 28, 2002, Governor Gray Davis signed the California Corporate Disclosure Act (the "Disclosure Act"). The Disclosure Act becomes effective on January 1, 2003, and will require more frequent and, for public corporations, additional disclosure by California corporations and foreign corporations qualified to transact business in California.
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11.04.2002SEC to Act on NYSE and NASDAQ Proposed Rules Requiring Shareholder Approval of Equity Compensation PlansUpdatesNYSE and Nasdaq recently filed with the SEC final proposed rules (which the SEC has published for a brief comment period) that will require shareholder approval of most equity compensation plans and eliminate discretionary broker voting of proxies on these plans. The rules will be effective immediately upon SEC approval, which is expected as soon as mid to late November 2002.
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11.01.2002Financial Experts, Internal Controls, Codes of Ethics and Improper Audit Influence: SEC Proposes New Batch of Sarbanes-Oxley RulesUpdatesOn October 22, the SEC posted proposed rules to implement Sections 404, 406 and 407 of the Sarbanes-Oxley Act of 2002. The proposed rules cover:
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10.24.2002"Rapid and Current" Disclosure and Form 8-K Proposals: Where Have the SEC's 8-K Proposals Gone?UpdatesWhat is the status of the SEC's June 17, 2002 8-K proposals? Have they been withdrawn? Overturned by the Sarbanes-Oxley Act of 2002? This Update answers those questions and summarizes Perkins Coie's comment letter to the Securities and Exchange Commission (SEC).
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10.18.2002NASDAQ Corporate Governance ProposalsUpdatesLast week the Nasdaq Stock Market delivered to the SEC several new and revised Nasdaq rule proposals, for publication in the Federal Register for public comment. These proposals reflect Nasdaq's continued response to the SEC's request made in February 2002 for corporate governance reform of Nasdaq listed companies.
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09.06.2002Recent SEC Final Rules: CEO and CFO Certification of Periodic Reports and Disclosure Controls; Accelerated Form 4 and Annual and Quarterly Report Filing DeadlinesUpdatesLast week the SEC adopted final rules under Sections 302 and 403 of the Sarbanes-Oxley Act of 2002:
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09.05.2002NYSE Files Proposed Final Corporate Governance Rules With SECUpdatesThe Board of the New York Stock Exchange (NYSE) submitted its proposed final listing and corporate governance rules to the Securities and Exchange Commission (SEC) on August 16, 2002, following a two-month comment period in which NYSE received more than 300 comment letters. NYSE's Board largely adopted the final recommendations of its Corporate Accountability & Listing Standards Committee, with some refinements to reflect the Sarbanes-Oxley Act and comment letters received during the comment process.
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08.12.2002Executive Compensation and the Sarbanes-Oxley Act of 2002UpdatesThis Perkins Coie LLP Update summarizes the impact of the Sarbanes-Oxley Act of 2002 on public company executive compensation and makes practical suggestions for complying with the Act. The following provisions of the Act affect executive compensation arrangements and benefits:
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08.02.2002Practical Recommendations for Section 906 CertificationUpdatesThis Perkins Coie Update summarizes the requirements of Section 906 certification and provides practical recommendations regarding the manner of filing and form of the certification and the Section 906 certification process.
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07.31.2002Sarbanes-Oxley Act of 2002UpdatesPresident Bush signed the Sarbanes-Oxley Act of 2002 into law on July 30, 2002, creating the most radical redesign of federal securities laws since the 1930s. Some provisions are effective immediately, while others will be effective as soon as the SEC adopts the relevant rules, which it must do within mandated time periods ranging from 30 days to one year. One of the two CEO/CFO certification requirements appears to be effective immediately, while the second CEO/CFO certification requirement will be effective no later than August 29, 2002.
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07.15.2002Listing Standards and Requirements of the BBX v. OTCBB v. NASDAQ SmallCap MarketUpdatesThe NASD, acting through its subsidiary, The Nasdaq Stock Market, Inc. ("Nasdaq"), recently filed a proposal with the Securities and Exchange Commission to transform the OTC Bulletin Board Service ("OTCBB") from a dealer-driven quotation service into a marketplace of listed stocks called the Bulletin Board Exchange ("BBX").
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07.01.2002SEC Proposes to Restructure Form 8-K and Accelerate Form 8-K FilingsUpdatesFor the first time in 25 years, the Securities and Exchange Commission plans to significantly restructure Form 8-K. Under the SEC's June 17, 2002 proposal, a reporting company would be required to disclose many events on Form 8-K that currently are not required to be disclosed or are included only in annual or quarterly reports. If adopted, the new rules would require Form 8-K disclosure of the following events:
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05.17.2002SEC Proposes New "Application of Critical Accounting Policies" Section in MD&AUpdatesOn May 10, 2002, the Securities and Exchange Commission (SEC) proposed an amendment to Regulation S-K that would require companies to add a new section, "Application of Critical Accounting Policies," to Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) included in annual reports, registration statements, and proxy and information statements. This new section would contain disclosure about:
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05.15.2002Preparing Your Business for Sale (…Or How to Sell it Faster and for More Money)UpdatesThis update is designed to help the owners of a "closely held" business facilitate its sale and increase the price they receive from its sale. By a "closely held" business, we mean a business owned by a relatively small number of people – often members of an extended family.
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04.11.2002Breaking Off Negotiations Becomes Trickier in California. Could a Recent California Ruling Affect Your Business?UpdatesOn March 19, 2002, a California Court of Appeal issued an opinion that could dramatically change pre-closing negotiations under California law. In Copeland v. Baskin Robbins U.S.A., the court ruled that "a contract to negotiate an agreement is distinguishable from a so-called 'agreement to agree' and can be formed and breached just like any other contract." The court also stated that the measure of damages in such cases is "not damages for the party's lost expectations under the prospective contract but damages caused by the injured party's reliance on the agreement to negotiate...[which] encompasses the plaintiff's out-of-pocket costs in conducting the negotiations. . . [and] may or may not include lost opportunity costs."
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03.01.2002New SEC Disclosure Requirements for Equity Compensation PlansUpdatesThe Securities and Exchange Commission has adopted final rules requiring increased disclosure of a company's equity compensation plans, with a focus on heightened disclosure of nonshareholder-approved plans. Below is a summary of the new disclosure and filing requirements. The published release regarding the new rules can be found at the SEC Web site (http://www.sec.gov/rules/final/33-8048.htm).
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09.01.2000SEC Introduces New Fair Disclosure RuleUpdatesOn August 10, 2000, the Securities and Exchange Commission (SEC) adopted Regulation FD (Fair Disclosure) in order to promote the full and fair disclosure of information by issuers. Regulation FD, which will become effective on October 23, 2000, targets the perceived problem of "selective disclosure"--when a company makes material nonpublic information available to selected persons, such as securities analysts or institutional investors, who could be expected to trade on the basis of such information before the information is disclosed to the general public.
Presentations
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08.31.2022
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03.13.2018Considerations for Your Annual Meeting: A Nuts-and-Bolts PerspectiveWebinarsPerkins Coie LLP and Computershare Trust Company presented a webinar on key legal and corporate governance issue facing public companies.
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06.11.2015SEC Hot Topics InstituteSpeaking EngagementsThis seminar examined the latest developments and trends, provided insight into what lies ahead and impart practical, actionable guidance on the crucial issues facing today's corporate and securities law practitioners and finance professionals.
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06.11.2015SEC Hot Topics InstituteSpeaking EngagementsPanel Presentation on SEC and DOJ Enforcement Issues Sponsored by the Society of Corporate Secretaries and Governance Professionals
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01.14.2014Public Companies Seminar Series: Preparing for the 2014 Proxy and Annual Reporting SeasonSeminarsSeminar and panel discussion focused on preparing attendees for the 2014 proxy and annual reporting season.
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02.25.2010M&A Strategies for Technology Companies: Is 2010 the Time?SeminarsDoubletree Arctic Club / Seattle, WA