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
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
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
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
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
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
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
On October 12, 2021, the Fifth Circuit Court of Appeals upheld a disgorgement order issued by the SEC, in—according to the opinion— the first appellate ruling on the topic since the Supreme Court’s 2020 decision in Liu v. SEC.… Continue Reading
Last week, the SEC announced accumulated awards of over $1 billion paid to 207 whistleblowers since its first award in 2012. Over $500 million was awarded in fiscal year 2021 alone. The SEC crossed the billion-dollar milestone with awards of $110 million and $4 million to two whistleblowers on September 15, 2021. The $110 million … Continue Reading
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
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
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
On June 30, 2021, the SEC posted six Notices of Covered Actions, for which individuals have 90 calendar days to apply for a whistleblower award. As discussed in our prior post, the SEC publishes Notices for cases in which the final judgment or order, by itself or together with other prior judgments or orders in … Continue Reading
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
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
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
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
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
Pharmaceutical and biotech companies, with proprietary and potentially lucrative products, have been popular targets for SPAC sponsors. Unfortunately, one such private equity sponsor may have its hands full after its managing partner was publicly named in a securities class action.… Continue Reading
In the financial world, 2020 was the year of the SPAC. During the past few years, many Silicon Valley start-ups were chomping at the bit to get listed and cash out via initial public offering (IPO). And in 2020, over half of the companies that went public did so using a SPAC. Exchanges are also … Continue Reading
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
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
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
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
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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