Tag Archives: SEC

Aider and Abettor Liability Standards in SEC Civil Enforcement Actions — The Harvard Law School Forum on Corporate Governance

Small business need-to-know.

Excerpt:  On August 8, 2012, the Second Circuit issued an important decision in Securities and Exchange Commission v. Apuzzo, 2012 WL 3194303, clarifying the test the SEC must meet to establish aiding and abetting liability for a securities law violation. There previously had been uncertainty in the Second Circuit whether the SEC must prove that the aider and abettor proximately caused the harm on which the primary violation was based. In Apuzzo, the Second Circuit made clear that “proximate cause” was not an element of the aiding and abetting violation and that, to charge someone with aiding and abetting, the SEC need allege and prove only that the aider and abettor associated himself with the venture in some way, participated in the venture as in something he wished to bring about, and sought by his action to make the venture succeed. The Court of Appeals also stated that proof of a high degree of knowledge of a primary violation may lessen the SEC’s burden in proving substantial assistance.

Read full article via Aider and Abettor Liability Standards in SEC Civil Enforcement Actions — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Advertisements

Comments Off on Aider and Abettor Liability Standards in SEC Civil Enforcement Actions — The Harvard Law School Forum on Corporate Governance

Filed under Small Business

“Publicness” in Contemporary Securities Regulation after the JOBS Act — The Harvard Law School Forum on Corporate Governance

Small business of-interest, need-to-know and news-to-watch — SEC public versus private.

Excerpt:  In our article “Publicness” in Contemporary Securities Regulation after the JOBS Act, forthcoming in the Georgetown Law Journal, we focus on the ideologically-charged question of when a private enterprise should be forced to take on public status, an extraordinarily significant change in its legal obligations and freedom to maneuver. The JOBS Act, which became law in April 2012, makes the first change in almost a half century in the criteria specified for companies that must meet public obligations under the Securities Exchange Act of 1934. Congress increased the “private space” by raising the 500 shareholder threshold to 2000 (so long as no more than 499 of those are not “accredited investors”) and permitting most new IPO companies to skip a host of regulatory obligations during their first five years as a public company.

Read full article via “Publicness” in Contemporary Securities Regulation after the JOBS Act — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

2 Comments

Filed under Small Business

Don’t Discourage Outside Shareholders — The Harvard Law School Forum on Corporate Governance

Read short introduction and download full report on the proposal.  Small business of-interest, need-to-know and news-to-watch.

Excerpt:  In contrast to the claims of the petition’s authors, the proposal should not be viewed as a “technical” closing of a loophole but rather as one that raises significant policy issues. In considering these issues, considerable weight should be given to the significant empirical evidence that the presence and involvement of outside blockholders enhances a company’s value and performance. Furthermore, the rules governing the balance of power between incumbents and outside blockholders are now substantially tilted in favor of insiders — both relative to earlier times and to other countries — rather than outside shareholders. This tilt counsels against tightening SEC rules in ways that would further disadvantage outsiders.

Read full article via Don’t Discourage Outside Shareholders — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on Don’t Discourage Outside Shareholders — The Harvard Law School Forum on Corporate Governance

Filed under Small Business

Proxy Access: Upcoming Votes at FRX, MDT and HRB — The Harvard Law School Forum on Corporate Governance

More today on small business of-interest, need-to-know and news-to-watch governance.

Excerpt:  The SEC Commission’s stated intent for proxy access was to create a process that functions, as nearly as possible, as a replacement for an actual, in-person gathering of security holders, thus enabling them ‘‘to control the corporation as effectively as they might have by attending a shareholder meeting.’’

The proposals that will soon come to a vote at FRX, MDT and HRB, if enacted, will ensure that long-term shareowners have a reasonable, but not necessarily easy, means for including board nominations in the proxy materials those corporations distribute. They would also encourage an important theoretical shift for shareowners and boards of directors away from single party contests of control to communities of dialogue and cooperation, where diversity of background, skill-sets and thought are welcome. The added DNA could revitalize companies, making them not only more profitable but with values more in tune with a creating and maintaining a salubrious environment. The key to more democratic, more accountable corporate governance is right in front of us. Let’s hope shareowners decide to use it by voting in favor of proxy access at FRX, MDT and HRB.

Read full article via Proxy Access: Upcoming Votes at FRX, MDT and HRB — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on Proxy Access: Upcoming Votes at FRX, MDT and HRB — The Harvard Law School Forum on Corporate Governance

Filed under Leadership, Operations & Innovation, Small Business

Caution Needed as New Regulatory Regime Takes Shape — The Harvard Law School Forum on Corporate Governance

Another opinion and update on Dodd-Frank changes in the works and to come.  This article written by one of the SEC Commissioners.  Interesting read, particularly when considering the source.

Excerpt:  Editor’s Note: Troy A. Paredes is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Paredes’ statement at a recent conference of the Society of Corporate Secretaries & Governance Professionals, which is available here. The views expressed in the post are those of Commissioner Paredes and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

In considering the “shape of things to come” — the theme that focuses this conference — one thing is certain: The regime regulating our financial markets is undergoing dramatic change. The case in point is the Dodd-Frank Act, which represents a historic expansion of the federal government’s power over the economy. The hundreds of rules and regulations that Dodd-Frank demands of the SEC and other financial regulators indicate just how far the government has reached into the private sector and just how heavy the government’s hand will be. Or, stated differently, the regulatory change demonstrates the degree to which government decision making, effectuated as it is through more regulation, will displace and distort private sector decision making.

To put it more directly, I have been and remain troubled that the Dodd-Frank regulatory regime goes too far.

Read full article via Caution Needed as New Regulatory Regime Takes Shape — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

1 Comment

Filed under Leadership, Operations & Innovation

Securities Enforcement Update — The Harvard Law School Forum on Corporate Governance

With all the changes,  policies and proposals in the works, these frequent updates on status and news-to-watch are important for all small business need-to-know.  This article is another SEC update from a somewhat different perspective.

Excerpt:   … as the current administration’s first term comes to a close and as conduct related to the financial crisis becomes more distant in time, we anticipate that the SEC will sustain its aggressive strategy of filing and, if necessary, litigating cases against prominent defendants in order to bolster public confidence in a vigorous enforcement of the securities laws.

Highlights of the past six months include:

Read full article via Securities Enforcement Update — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on Securities Enforcement Update — The Harvard Law School Forum on Corporate Governance

Filed under Leadership, Operations & Innovation, Small Business

Effective Consolidated Audit Trail: Keeping the Door Open — The Harvard Law School Forum on Corporate Governance

Small business need-to-know, of-interest and news-to-watch.  This study addresses the long awaited rule’s faults.   Interesting read.

Excerpt:  In my remarks at the Commission’s May 26, 2010 meeting considering the CAT proposal, I quoted from a 1980 Commission report that spoke about the need for a comprehensive market oversight surveillance system. [1] Flash forward over three decades from that report, and not much has changed. We have seen enormous growth in the capital markets, and the SEC still does not have access to comprehensive market data. As a result, I have been a consistent and vocal supporter of a consolidated audit trail. [2]

It has taken over 30 years for the Commission to be poised to act on this issue. Accordingly, it is important that the Commission get it right. If the first steps in establishing this national market oversight framework are flawed, the system will not be comprehensive, and it will not serve the needs of the American public.

Unfortunately, as currently structured, today’s rule falls short of establishing the process that investors deserve.

Read full article via Effective Consolidated Audit Trail: Keeping the Door Open — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on Effective Consolidated Audit Trail: Keeping the Door Open — The Harvard Law School Forum on Corporate Governance

Filed under Leadership, Operations & Innovation, Small Business, Taxes & Audit

IASB IFRS SEC Staff Paper FASB

Update on status of proposed global financial reporting standard.  Small business need-to-know and news-to-watch.

Excerpt:  The mission to create a single set of global financial reporting standards received two blows in recent days as the International Accounting Standards Board engaged in tussles with the Securities and Exchange Commission and the Financial Accounting Standards Board. On July 13 the SEC published a staff paper written with the aim of providing the commission with the information it needs to decide whether and how quickly to proceed with adoption of International Financial Reporting Standards for U.S.-listed companies.

It was widely viewed as being 137 pages of reasons why the SEC doesn’t need to make a decision right now. The migration towards full adoption of international standards remains a contentious issue in the United States.

Read full article via IASB IFRS SEC staff paper FASB Leslie Seidman Hans Hoogervorst incurred loss expected loss.

Comments Off on IASB IFRS SEC Staff Paper FASB

Filed under Accounting, Bookkeeping, GAAP, IFRS, Small Business

Grant Thornton LLP | Compensation and Benefits Bulletin

Grant Thornton gives us 2 update bulletins on timely and hot topics in business today.  Human resources and small business takeaways

Excerpt:
Understanding shadow payroll

SEC adopts rules for compensation committee members and compensation advisers

Read two articles and access download via Grant Thornton LLP.

Comments Off on Grant Thornton LLP | Compensation and Benefits Bulletin

Filed under Human Resources & Payroll, Small Business

SEC “Obey-the-Law” Injunctions Held Invalid — The Harvard Law School Forum on Corporate Governance

Small business need-to-know and news-to-watch.  Interestingly, one court ruling can have an impact on other court rulings — wonder how this will evolve.

Excerpt:  The Eleventh Circuit Court of Appeals dealt a blow to the Securities and Exchange Commission (“SEC”) and its long-standing practice of seeking broad federal court injunction orders directing defendants to refrain from any future violations of securities laws, often referred to as “obey-the-law” injunctions. In SEC v. Goble, No. 11-12059, 2012 WL 1918819 (11th Cir. May 29, 2012), the Eleventh Circuit vacated the “obey-the-law” injunctions entered against defendant Richard Goble, the founder of North American Clearing, Inc. (“North American”), because the injunctions did not satisfy Federal Rule of Civil Procedure 65(d)(1), which requires that injunctions describe, “in reasonable detail. . . the act or acts [sought to be] restrained or required.” Although the decision appears to widen an existing gap between the Eleventh and Second Circuits on the propriety of “obey-the-law” injunctions in SEC settlements, the full impact of the Goble decision remains unclear. The Eleventh Circuit’s strongly worded opinion and careful analysis could prompt other courts to question the benefit and efficacy of the SEC’s frequent practice of seeking such broad “obey-the-law” injunctions.

Read full article via SEC “Obey-the-Law” Injunctions Held Invalid — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on SEC “Obey-the-Law” Injunctions Held Invalid — The Harvard Law School Forum on Corporate Governance

Filed under Leadership, Operations & Innovation, Small Business

Compensation Committees and Adviser Independence under Dodd-Frank — The Harvard Law School Forum on Corporate Governance

Small business need-to-know, update, of-interest  —  the summary of the final fules from SEC on Dodd-Frank.

Excerpt: On June 20, 2012, the U.S. Securities and Exchange Commission (the “SEC”) released its final rules (the “Final Rules”) implementing Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Section 952 of the Dodd-Frank Act (“Section 952”) added Section 10C to the Securities Exchange Act of 1934 (the “Exchange Act”) and contains a number of provisions generally relating to the independence of compensation committees and their advisers. The Final Rules are in most respects identical to the proposed rules released on March 30, 2011 (the “Proposed Rules”). [1] Below is a summary of the provisions of the Final Rules, noting the key changes from the Proposed Rules.

Read full article via Compensation Committees and Adviser Independence under Dodd-Frank — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on Compensation Committees and Adviser Independence under Dodd-Frank — The Harvard Law School Forum on Corporate Governance

Filed under Leadership, Operations & Innovation, Small Business

Pension Funds as Owners and Investors — The Harvard Law School Forum on Corporate Governance

Small business need-to-know and news-to-watch.  Cash management

Excerpt: …. acknowledging the important role of public pension funds.

As significant investors, public pension funds are a needed voice in the ongoing public dialogue involving the issues facing investors today, including corporate governance and audit quality. As fiduciaries, public pension plans can be a powerful voice on behalf of their beneficiaries, working men and women whose voices are often drowned out. You and your beneficiaries have a direct stake in the results. You should speak out on behalf of investors, and you should hold the SEC accountable to act on behalf of investors

Read full article via Pension Funds as Owners and Investors — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on Pension Funds as Owners and Investors — The Harvard Law School Forum on Corporate Governance

Filed under Cash Management, Human Resources & Payroll, Management, Small Business, Taxes & Audit

Independence Rules for Compensation Committees and Advisers — The Harvard Law School Forum on Corporate Governance

Small business takeaway need-to-know and news-to-watch compliance.

Excerpt: Yesterday, the SEC adopted final rules to implement the Dodd-Frank Act’s requirements regarding the independence of compensation committees and their advisers. For the most part, the SEC made few changes from the proposed rules, which in turn hewed very closely to the requirements of the statute.

The national securities exchanges will have 90 days from the publication of the final rules in the Federal Register to propose listing standards implementing the rules and one year from that date of publication to finalize their standards. New disclosure requirements regarding compensation consultants are not subject to this exchange rulemaking process and will be effective beginning with any proxy or information statement for an annual shareholders meeting (or a special meeting in lieu of an annual meeting) at which directors will be elected occurring on or after January 1, 2013.

Compensation Committee Member Independence
The SEC requires each member of the compensation committee to be an independent member of the board of directors. For this purpose, the SEC defines the “compensation committee” as:  ……..  

Read full article via Independence Rules for Compensation Committees and Advisers — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on Independence Rules for Compensation Committees and Advisers — The Harvard Law School Forum on Corporate Governance

Filed under Leadership, Operations & Innovation, Small Business

SEC Staff Guidance on Shareholder Proposals During 2012 Proxy Season — The Harvard Law School Forum on Corporate Governance and Financial Regulation

More small business need-to-know and news-to-watch for 2012 proxy season.

Excerpt: There have been a number of significant shareholder proposals submitted during the 2012 proxy season to date. This alert summarizes notable responses by the Securities and Exchange Commission (the “SEC”) staff (the “Staff”) to no-action requests concerning many of these shareholder proposals

Read full article via SEC Staff Guidance on Shareholder Proposals During 2012 Proxy Season — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on SEC Staff Guidance on Shareholder Proposals During 2012 Proxy Season — The Harvard Law School Forum on Corporate Governance and Financial Regulation

Filed under Small Business

Mid-Season Update on the 2012 Proxy Season — The Harvard Law School Forum on Corporate Governance

Small business need-to-know…..an update on where each of the issues stands midway in this 2012 proxy season.

Excerpt……The 2012 proxy season in the United States, forecast by some to feature significant turmoil and change, has in fact been less tumultuous than expected. It’s been all quiet on the regulatory front, owing to the SEC’s highly deliberate approach to rulemaking and the D.C. Circuit’s interventionist reaction to the proxy access rules. With new rules, for once, not in motion, change is occurring incrementally, as activists continue old campaigns and launch new ones, institutional shareholders express their support on both the issues and the circumstances of particular companies

Read full article……..via Mid-Season Update on the 2012 Proxy Season — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

Comments Off on Mid-Season Update on the 2012 Proxy Season — The Harvard Law School Forum on Corporate Governance

Filed under Small Business