In response to Russian President Vladimir Putin’s decision to invade Ukraine in February, the U.S. government announced sweeping sanctions against Russia. As the conflict nears the three-month mark, businesses around the world are continuing to address compliance with these sanctions. To that end, the SEC recently issued guidance on how companies affected by the Russian invasion of Ukraine should disclose how the conflict is affecting their operations, including the impact of evolving sanctions.

The guidance, posted by the Division of Corporation Finance on May 2, 2022, advises impacted companies to consider disclosure about a variety of topics, including, if material, whether they have  direct or indirect operations, investments, or employees in Russia, Ukraine, or Belarus that may be affected by the war; whether they have material direct or indirect reliance on goods in Ukraine, Russia, or countries supportive of Russia; whether the war is having or is expected to have material impacts on a company’s supply chain; or whether the company has material business relationships, assets, or other connections to Russia, Ukraine, or Belarus.

The Division further advised that impacted companies’ disclosures of their financial results may need to reflect information related to the sanctions, such as whether they have impaired corporate assets, inventory valuation, or ability to collect on contracts. The SEC further noted that companies should disclose any material issues related to increased cybersecurity risks or volatility in commodity trading prices regardless of whether they have operations in Russia, Belarus or Ukraine.

Despite the wide-ranging categories of information the Division advised companies to consider in making disclosure decisions, it cautioned that the list was not exhaustive. Companies should also consider less obvious potential material risks and impacts, such as the impact that business in Russia or Ukraine may have on the behavior of its customers. They should also be aware of MD&A requirements and disclose known uncertainties that are reasonably likely to have a material impact on the company’s results of operations or financial condition.

The ever-changing regulatory and enforcement environment created by the Russian invasion poses unique risks for companies seeking to navigate the global landscape, both in terms of their actions and their public-facing statements. Now more than ever, it is important for companies that have been or could be materially impacted by the conflict in Ukraine to continue to monitor and analyze developments, including indirect, material effects of the resulting sanctions or Finland’s decision to join NATO.  Companies should understand not just the scope of the sanctions as they currently stand, but also monitor potential further sanction developments, and their potential direct and indirect impact on all aspects of the business and industry.

We have issued client alerts on related U.S. sanctions, which are available here.

Posted in International, SEC Enforcement, Securities Regulatory
Tags: confidentiality, Cybersecurity, cybersecurity risks, disclosures, enforcement, public company disclosures, sanctions, SEC, SEC Enforcement, SEC’s Division of Corporation Finance, U.S. sanctions, Ukraine, volatility
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Photo of Frank Zarb Frank Zarb

Frank Zarb is a partner in our Corporate Department and a member of the Capital Markets Group, where he concentrates his practice on equity finance and a wide range of regulatory matters under U.S. federal securities laws.

He counsels public and private companies…

Frank Zarb is a partner in our Corporate Department and a member of the Capital Markets Group, where he concentrates his practice on equity finance and a wide range of regulatory matters under U.S. federal securities laws.

He counsels public and private companies, hedge funds and family offices, and market intermediaries and other financial institutions on a wide range of transactional and securities regulatory compliance matters including:

  • Equity investments and dispositions in public and private companies
  • Public company registration, disclosures and preparation of periodic reports
  • Tender offers, equity lines, proxy contests, SPACs, and other highly regulated transactions
  • Regulation M, Regulation SHO, Forms 13F and 13H, insider trading and other trading issues
  • Corporate governance and stock exchange listing standards
  • Federal and state proxy requirements as well as shareholder proposals and communications
  • Regulation of financial intermediaries, including trading of public and private equity, and complex and novel trading structures
  • Advocating with the SEC on behalf of a market intermediary related to back-office processing matters.

Frank’s practice is both domestic and international, beginning with his experience in senior positions with the Securities and Exchange Commission. As a member of the staff of the SEC’s Office of International Corporate Finance, Frank advised U.S. companies seeking to do business in the EU, Asia and the Middle East, as well as companies from those regions doing business in the U.S., or otherwise seeking to comply with the U.S. securities laws.  In the Office of Chief Counsel, he focused on federal proxy rules, and supervised a team of staff members that provided guidance in the course of proxy season.

Prior to joining the Firm, Frank was deputy general counsel/chief securities counsel for Bristol Myers Squibb Co. in a new position required by the SEC. Prior to joining Bristol-Myers, Frank was a corporate partner with Morgan, Lewis & Brockius.

Social Responsibility

Frank is a Trustee of the Gerald R. Ford Presidential Foundation, and he provides significant pro bono assistance to non-profit social service institutions in the Washington, D.C. area.

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Photo of Louis Rambo Louis Rambo

Louis Rambo is a partner in the Corporate Department and a member of the Capital Markets Group. He focuses his practice on counseling public companies and their boards of directors on corporate governance, capital markets transactions, mergers and acquisitions, securities regulation, disclosure and…

Louis Rambo is a partner in the Corporate Department and a member of the Capital Markets Group. He focuses his practice on counseling public companies and their boards of directors on corporate governance, capital markets transactions, mergers and acquisitions, securities regulation, disclosure and shareholder activism. Drawing on his previous tenure with the Securities and Exchange Commission in the Division of Corporation Finance, Louis partners with clients on capital raising, including underwritten equity transactions, at-the-market offerings and high-yield and investment grade debt offerings, as well as on structuring M&A transactions, spin-offs, tender offers and going private transactions. He advises public companies on developing governance and disclosure matters, including director independence, compensation, insider trading issues, shareholder proposals and stockholder meetings, and advises on shareholder activism and takeover defense.

Louis also regularly advises hedge funds, private equity funds, family offices, private companies and other financial institutions on a wide range of transactional and securities regulatory compliance matters, including capital raising, PIPEs and secondary transactions, novel and complex beneficial ownership issues arising under the federal securities laws, derivative transactions, insider trading issues and policies and compliance programs.

Louis previously served as an attorney with the SEC in the Division of Corporation Finance. While at the SEC, Louis worked on a number of transactional and securities compliance matters.

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Photo of Seetha Ramachandran Seetha Ramachandran

Seetha Ramachandran is a partner in the Litigation Department, and a member of the White Collar and Asset Management Litigation practices. An experienced trial and appellate lawyer, Seetha has conducted 10 criminal jury trials, argued 10 appeals before the U.S. Court of Appeals…

Seetha Ramachandran is a partner in the Litigation Department, and a member of the White Collar and Asset Management Litigation practices. An experienced trial and appellate lawyer, Seetha has conducted 10 criminal jury trials, argued 10 appeals before the U.S. Court of Appeals for the Second Circuit, and handled ancillary civil proceedings in forfeiture cases.

Seetha is a leading expert in anti-money laundering (AML), Bank Secrecy Act, economic sanctions and asset forfeiture matters. Her practice focuses on white collar and regulatory enforcement defense, internal investigations, and compliance counseling. She represents banks, broker dealers, hedge funds, private equity funds, online payment companies, and individual executives and officers in high stakes and sensitive matters. Seetha has deep experience representing institutions and individuals in financial penalty phase of criminal and regulatory matters, and is often retained to litigate forfeiture and restitution claims on behalf of victims and third parties in criminal cases, as well as handling these issues for individual defendants.

Seetha served as a federal prosecutor for nearly 10 years, including as Deputy Chief in the Asset Forfeiture and Money Laundering Section (AFMLS), Criminal Division, U.S. Department of Justice. She was the first head of DOJ’s Money Laundering & Bank Integrity Unit, where she supervised DOJ’s first major AML prosecutions, and oversaw all of the Criminal Division’s AML cases. In that role, Seetha coordinated closely with state and federal banking regulators, including FinCEN, the OCC and the New York State Department of Financial Services, giving her deep experience with how these agencies work together, especially in matters involving civil and criminal liability. Her work developing and charging criminal cases under the Bank Secrecy Act (BSA) formed the model for AML enforcement that regulators and prosecutors follow today.

Seetha also served as an Assistant U.S. Attorney for the Southern District of New York for nearly six years, in the Complex Frauds, Major Crimes and Asset Forfeiture units where she investigated and prosecuted white-collar cases involving a wide range of financial crimes, including bank fraud, mail and wire fraud, tax fraud, money laundering, stolen art and cultural property, and civil and criminal forfeiture cases.

Seetha is a frequent speaker and prolific author on topics including enforcement trends in the financial services industry, OFAC sanctions, effective AML programs and asset forfeiture.

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Photo of Julia Alonzo Julia Alonzo

Julia Alonzo is the Litigation Department Legal Director and Head of Women’s Initiatives.  As Legal Director of the Litigation Department, she works closely with the department’s co-chairs to manage its business, operations, and achievement of strategic goals.  In her capacity as Proskauer’s Head…

Julia Alonzo is the Litigation Department Legal Director and Head of Women’s Initiatives.  As Legal Director of the Litigation Department, she works closely with the department’s co-chairs to manage its business, operations, and achievement of strategic goals.  In her capacity as Proskauer’s Head of Women’s Initiatives, Julia focuses on executing the firm’s commitment to advancing and supporting women attorneys at all stages of their careers.  In particular, she manages the firm’s Women’s Sponsorship Program and the Proskauer Women’s Alliance.

Julia also serves on the Firm’s Hiring Committee and Summer Program Committee.

Previously, Julia was a senior counsel at Proskauer in the Litigation Department, with a focus on securities and corporate governance litigation.

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Photo of Michael Guggenheim Michael Guggenheim

Michael Guggenheim is an associate in the Litigation Department and a member of the Securities Litigation and White Collar Defense & Investigation groups. He focuses on a wide range of business disputes and regulatory and investigative matters, including enforcement actions brought by the…

Michael Guggenheim is an associate in the Litigation Department and a member of the Securities Litigation and White Collar Defense & Investigation groups. He focuses on a wide range of business disputes and regulatory and investigative matters, including enforcement actions brought by the SEC and state attorneys general. In connection with the historic restructuring of Puerto Rico’s debts, Michael is a core part of the team that advises the Financial Oversight and Management Board for Puerto Rico on a variety of issues related to Puerto Rico Oversight, Management, and Economic Stability Act, including advising the Oversight Board on statutory and regulatory developments.

Michael has experience with every stage of litigation, including taking depositions, drafting dispositive and discovery motions, coordinating discovery, preparing witnesses for testimony, and drafting appellate briefs. He has represented clients in both state and federal courts, as well as in arbitrations and government investigations.

Michael maintains an active pro bono practice, which has included litigating against the State of New York to invalidate regulations that would circumvent statutorily mandated protections for children placed in foster care. In addition, he spent a five-month secondment at the New York City Law Department in the Administrative Law and Regulatory Litigation Division.

Michael earned his J.D. from Harvard Law School and his B.A., summa cum laude, from Rutgers University. While in law school, Michael worked for the Litigation Department of the San Francisco City Attorney, was a teaching assistant for the Harvard Law School Negotiation Workshop, and litigated election law cases with Common Cause. He also served as the Executive Managing Editor of the Harvard Law & Policy Review and coached the Boston College mock trial team. In his free time, Michael enjoys practicing yoga.

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