Corporate Defense and Disputes

Important developments in U.S. securities law, white collar criminal defense, regulatory enforcement and other emerging issues impacting financial services institutions, publicly traded companies and private investment funds

Tag Archives: SEC

SEC Issues New Guidance Regarding Russia Sanctions and Public Company Disclosures

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 … Continue Reading

SEC Proposes Extensive New Rules Applicable to SPACs and de-SPAC Transactions

This week, our corporate colleagues published a handy guide to the SEC’s new proposed rules on SPACs. Of particular note to securities watchers should be potential increases in litigation stemming from changes to the definition of “blank check company” for the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). The SEC has long given … Continue Reading

SEC Division of Examinations Announces 2022 Examination Priorities

The Securities and Exchange Commission’s Division of Examinations recently announced its examination priorities for fiscal year 2022: Private Funds; Environmental, Social, and Governance (“ESG”) Investing; Standards of Conduct; Information Security and Operational Resiliency; and Emerging Technologies and Crypto-Assets.  The Division seeks to provide investors and registrants with transparency into these areas, and that it expects registrants to … Continue Reading

Major SPAC News, Rules May Be Coming This Week

On Thursday, March 24th, the Securities and Exchange Commission announced an agenda for a March 30th open meeting for the Divisions on Corporate Finance and Investment Management.  The meeting has only one agenda item: SPACs, shell companies, and projections. In December 2021, SEC Chair Gary Gensler compared SPACs to traditional IPOs, and noted that there … Continue Reading

SEC Proposes Broad New Climate Change Disclosure Requirements

Last week, the U.S. Securities and Exchange Commission proposed a set of sweeping new rules requiring public companies to disclose climate-related risks in their registration statements and periodic reports.  Under the proposed rules, public companies would have to disclose the actual and potential impacts of climate change on their business, management and governance processes to … Continue Reading

Pay Versus Performance Takes Center Stage

In an era where TikTok stars outearn scores of CEOs of top earning publicly traded companies, executive compensation is no less important to the investing public or to companies striving to attract and retain top talent. Indeed, just this year the CEO of Starbucks received a 39% pay increase. Such soaring executive compensation has not … Continue Reading

SEC Brings First Enforcement Action Against Alternative Data Provider

The Securities and Exchange Commission (“SEC”) filed a settled securities fraud action against App Annie Inc., one of the largest sellers of market data on how apps on mobile devices are performing, and its co-founder and former CEO and Chairman Bertrand Schmitt.  The settlement is the first enforcement action brought by the SEC against an … Continue Reading

SEC Investor Advisory Committee Considers Recommendations to Tighten Rules for Insiders’ Trading Plans

The Securities and Exchange Commission’s Investor Advisory Committee (the “IAC”) is considering recommendations from its Owner Subcommittee urging the Commission to tighten the affirmative defense and disclosure requirements for SEC Rule 10b5-1 trading plans.  These recommendations follow recent statements by SEC Chair Gary Gensler signaling the agency’s intention to review and toughen rules governing those plans.… Continue Reading

July 2021 Update of the SEC’s Covered Actions for Potential Whistleblower Claims

On July 30, 2021, the SEC posted 14 Notices of Covered Actions, after which individuals have 90 calendar days to apply for a whistleblower award.  As discussed in our prior post, the SEC publishes these Notices for cases in which the final judgment or order, either by itself or together with other prior judgments or … Continue Reading

SEC’s Coinschedule Settlement Offers Mere “Clue-By-Enforcement” Into Whether Cryptocurrencies are Securities

On July 14, 2021 the SEC issued a consented-to Cease and Desist Order against U.K.-based cryptocurrency review website owner Blotics Ltd. (formerly doing business as Coinschedule Ltd.) for violating Section 17(a) of the Securities Act. According to two SEC Commissioners, the decision should have but didn’t clarify the Commission’s position as to whether and when … Continue Reading

District Court Takes Judicial Notice of SEC Order in Denying Motion to Dismiss Shareholder Claims

In our previous post, Under Armour Inc. Pulls Sales Forward, SEC and Stockholders Push Back, we discussed Under Armour Inc.’s recent settlement with the SEC, under which Under Armour agreed to pay $9 million for alleged violations of federal securities laws. While that settlement marked the end of a two year investigation into Under Armour’s … Continue Reading

Under Armour Inc. Pulls Sales Forward, SEC and Stockholders Push Back

As the culmination of an SEC investigation into Under Armour Inc.’s “pull forward” practice leads to charges, Under Armour agrees to cease and desist and settles for $9 million. Following an investigation dating back to 2015, the SEC claimed Under Armour misled investors by not disclosing the reason for its growth in revenue and what … Continue Reading

First Circuit Adopts Prevailing Standard for Applicability of Federal Securities Laws to Foreign Investors, But Rejects Second Circuit’s Narrower Test

The U.S. Court of Appeals for the First Circuit held yesterday that the U.S. securities laws apply to foreign brokers’ solicitations of securities purchases by foreign investors if the purchasers or sellers incurred irrevocable liability within the United States to pay for or deliver the securities. The decision in SEC v. Morrone follows the “irrevocable … Continue Reading

Second Circuit Upholds Insider Trading Conviction, Finding Sufficient Confidentiality Duty and Personal Benefit

The Second Circuit yesterday affirmed the insider trading conviction of the principal of a potential acquiror who, in breach of a nondisclosure agreement with a potential target company, had provided a tippee with nonpublic information about an impending acquisition of the target. The decision in United States v. Chow held that: The nondisclosure agreement (“NDA”) between … Continue Reading

Second Circuit Reaffirms that Federal Securities Laws Do Not Apply to Predominantly Foreign Transactions

The U.S. Court of Appeals for the Second Circuit reaffirmed yesterday that the federal securities laws do not apply to “predominantly foreign” securities transactions even if those transactions might have taken place in the United States.  The ruling in Cavello Bay Reinsurance Ltd. v. Shubin Stein (No. 20-1371) reinforces the Second Circuit’s prior decisions concerning the … Continue Reading

Shining a Spotlight on ESG Disclosures in the Biden Administration

In a period where almost nothing seems certain, it is inevitable that ESG issues will be on the front of the incoming SEC Chair’s mind. Jay Clayton, who resigned as SEC Chairman in December 2020, has urged that one-size-fits-all metrics for environmental disclosures aren’t appropriate given the varied impacts of climate change on different industries. … Continue Reading

SEC Flexes Funny Bone in Fictional Token Offering

The Securities and Exchange Commission (the “SEC”) has taken to using humor and sarcasm to educate retail investors about the potential risks of purchasing tokens in initial coin offerings (“ICOs”).This week, the SEC issued a press release presenting “a hot investment opportunity.” The release pointed to a website touting the HoweyCoin—a fictional crypto token intending … Continue Reading

S.D.N.Y Dismisses Dodd-Frank Whistleblower Action

On February 5, 2018, U.S. District Court for the Southern District of New York granted Defendant Khan Funds Management America, Inc.’s Rule 12(b)(6) motion to dismiss a whistleblower retaliation claim under Dodd-Frank on the grounds that Plaintiff failed to state a claim upon which relief could be granted. Read the full post on Proskauer’s Whistleblower Defense blog.… Continue Reading

SEC Staff Announces 2018 OCIE Examination Priorities

Last week, the staff of the SEC’s Office of Compliance Inspections and Examinations (OCIE) recently released its sixth annual examination priorities announcement. The alert lays out general issues industry can expect OCIE to focus on during the administration of the agency’s examination program in 2018. While reflecting a renewed emphasis of SEC Chair Jay Clayton … Continue Reading
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