Category: SEC Enforcement

SEC Extends Filing Relief for Companies Affected by COVID-19

SEC Extends Filing Relief for Companies Affected by COVID-19

The Securities and Exchange Commission has extended an earlier order, so that subject to certain conditions that we reported on here, public companies may have an additional 45 days from the original due date to file their Exchange Act reports that are otherwise due between March 1 and July 1, 2020. Companies relying on this relief, in compliance with the conditions imposed by the order,...

SEC Charges TherapeuticsMD with Regulation FD Violations

SEC Charges TherapeuticsMD with Regulation FD Violations

Last week, the SEC issued a reminder that Regulation FD remains a vital element of the federal securities regulations. In the first enforcement action regarding Regulation FD since 2013, the SEC charged TherapeuticsMD Inc., a pharmaceutical company, with violations of Regulation FD based on its sharing of material, nonpublic information with sell-side research analysts without also disclosing the same information to the public. The SEC’s...

Johnson & Johnson May Exclude Shareholder Proposal for Binding Arbitration on Securities Claims

Johnson & Johnson May Exclude Shareholder Proposal for Binding Arbitration on Securities Claims

On February 11, 2019, the Staff of the Division of Corporation Finance granted no-action relief permitting Johnson & Johnson to omit a shareholder proposal from its proxy statement.  The shareholder proposal requested mandatory arbitration of shareholder claims arising under the federal securities laws. The Staff relied on Rule 14a-8(i)(2), which permits exclusion of a proposal that, if implemented, would cause the company to violate any...

SEC Updates FAQs Regarding the Ongoing Government Shutdown

SEC Updates FAQs Regarding the Ongoing Government Shutdown

On January 10, 2019, the Division of Corporation Finance of the Securities and Exchange Commission updated its Frequently Asked Questions (FAQs) about how to handle certain filing matters during the U.S. government shutdown, which is now entering its fourth week. (See, sec.gov/page/corpfin-section-landing.) The staff revised questions 4 and 5 and added new questions 6 and 9. Question 4 was revised to emphasize that Rule 430A is...

SEC Fines ADT Inc. $100k for Non-GAAP Disclosure in Earnings Releases

SEC Fines ADT Inc. $100k for Non-GAAP Disclosure in Earnings Releases

On December 26, 2018, the SEC filed a cease-and-desist order and fined ADT Inc. (“ADT”) $100,000 for its use of non-GAAP financial measures without giving equal or greater prominence to the comparable GAAP financial measures. The order serves as a reminder of the importance of the SEC’s “equal or greater prominence” rule when disclosing non-GAAP financial measures, even when comparable GAAP financial measures are also...

U.S. Government Shutdown Impacts SEC Operations, EDGAR and Other Filings, Enforcement and Regulatory Activities

U.S. Government Shutdown Impacts SEC Operations, EDGAR and Other Filings, Enforcement and Regulatory Activities

In response to the U.S. government shutdown that began on December 22, 2018, the U.S. Securities and Exchange Commission and its Divisions of Corporation Finance and Investment Management published public guidance regarding the impacts on their operations. Although electronic filings will continue to be accepted in many cases, as described below, nearly all SEC operations, including the review and processing of filings and enforcement and...

Marijuana Investments and Fraud Featured in SEC Investor Alert

Marijuana Investments and Fraud Featured in SEC Investor Alert

The marijuana industry is attracting considerable interest from investors, and unfortunately, scam artists trying to take advantage of those investors. In response to these concerns, on September 5, 2018, the Securities and Exchange Commission’s Office of Investor Education and Advocacy (OIEA) and Retail Strategy Task Force issued an alert to investors warning them about investment schemes involving marijuana-related companies. According to the release, the OIEA...

SEC Issues $1.75 Million Penalty Over Perks Disclosures

SEC Issues $1.75 Million Penalty Over Perks Disclosures

A recent SEC consent order against The Dow Chemical Company reminds companies that when evaluating whether or not to disclose a payment or benefit to an executive as a perk in a proxy statement, the fact that the item has a tangential business purpose, or is convenient for the company, is insufficient grounds to exclude the item as a perk.  In order to be excluded as...

SEC Approves Series of Final and Proposed Rules in Line with Stated Priorities

SEC Approves Series of Final and Proposed Rules in Line with Stated Priorities

The SEC held a very busy open meeting yesterday, voting on the following final and proposed rules: Adoption of amendments to modernize the definition of “smaller reporting company,” which was established in 2008.  See our previous discussion of the amendments.   Adoption of amendments to require the use of the Inline XBRL format in certain filings, which were proposed in 2017 and have been under...

SEC Guidance on Cybersecurity Disclosure and Policies – Recap of Dorsey Webinar Presentation

SEC Guidance on Cybersecurity Disclosure and Policies – Recap of Dorsey Webinar Presentation

Earlier this week, Dorsey hosted a webinar panel presentation on the SEC’s recent guidance on cybersecurity disclosures and policies. The webinar provided a detailed walk-through of the SEC’s guidance, including issues related to enhanced disclosure, insider trading, and Reg FD policies. The panel also discussed the impact of the SEC’s guidance within the changing landscape of cybersecurity and current developments in shareholder litigation, SEC enforcement actions,...