Governance & Compliance Insider

17 Apr, 2017

Compensation to Newsletter Writers Must Be Disclosed

On April 10, 2017, the SEC’s Division of Enforcement brought enforcement actions against 27 individuals and entities behind various alleged stock promotion schemes. These actions arose when public companies, through promoters or communications firms, hired newsletter writers to generate publicity for their securities without publicly disclosing that the writers were being paid. While it is not illegal to hire newsletter writers, Section 17(b) of the...

Legislative Actions

12 Apr, 2017

Gender Pay Gap Reporting for Companies with More Than 250 Employees in Great Britain

Beginning April 2017, companies with 250 or more employees in England, Wales and Scotland on April 5th should be aware of a requirement to begin publishing annually on their own website and on a government website the following four figures: Gender pay gap (mean and median averages) Gender bonus gap (mean and median averages) Proportion of men and women receiving bonuses Proportion of men and...

Exchange Act Reporting and Disclosure Effectiveness / SEC Rulemaking / Securities Act Compliance

11 Apr, 2017

SEC Issues Final Rules to Make JOBS Act Inflation Adjustments and Amendments to Forms and Rules to Accommodate Emerging Growth Companies

On March 31, 2017, the Securities and Exchange Commission (SEC) issued final rules regarding inflation adjustments and other technical amendments under Title I and III of the Jumpstart Our Business Startups (JOBS) Act. Under the inflation adjustments, the SEC adjusted the gross revenue threshold for an issuer to lose its status as an Emerging Growth Company (EGC) from $1.0 billion to $1.07 billion, a $70...

Audit Committees and Independent Auditors / Exchange Act Reporting and Disclosure Effectiveness / SEC Rulemaking

7 Apr, 2017

Disclosure Alert: Consider Transitional Disclosure on Revenue Recognition Standard

The staff of the Securities and Exchange Commission (SEC) continues to encourage companies to provide useful disclosure to investors with regard to the new revenue recognition standard that will apply for reporting periods beginning after December 15, 2017. The new standard not only changes the method for measuring revenue and the timing of revenue recognition, but also requires expanded disclosures to enable users of financial...

Ethics and Compliance / SEC Enforcement / Securities Act Compliance

29 Mar, 2017

The Danger of Paying Finder’s Fees to Unregistered Broker-Dealers

We get asked from time-to-time whether it is advisable for issuers to pay fees to unregistered “finders” for introducing potential investors in the United States to the issuer in connection with securities offerings. The short answer is “no.” Most finders are engaged by issuers under finder’s, advisory, or other arrangements, which typically require payment of “success fees” upon completion of a financing transaction. While these...

SEC Rulemaking / Securities Act Compliance

24 Mar, 2017

SEC Adopts T+2 Settlement Cycle

On March 22, 2017, the Securities and Exchange Commission adopted an amendment to Rule 15c6-1(a) to shorten by one business day the standard settlement cycle for most broker-dealer securities transactions. Currently, the standard settlement cycle for these transactions is three business days, known as T+3. The amended rule shortens the settlement cycle to two business days, T+2. The amended rule will take effect on September...

Equity Compensation / Legislative Actions / Securities Act Compliance

17 Mar, 2017

Senate Banking Committee Focused on Deregulation

On March 9, 2017, the Senate Banking Committee passed a series of four bills focused on deregulation, including one that would make it easier for privately held companies to issue stock awards through equity compensation plans. Each of the bills was a bipartisan effort. One bill eases certain restrictions on reporting on exchange traded funds (ETFs). The bill would address securities laws and regulations that...

Exchange Act Reporting and Disclosure Effectiveness / SEC Rulemaking

6 Mar, 2017

SEC Adopts Use of Exhibit Hyperlinks in Filings

We reported in September 2016 on proposed Securities and Exchange Commission rules requiring the use of hyperlinks to exhibits in most registration statements and periodic and current reports. On March 1, 2017, the SEC adopted final rules, largely in line with the proposed rules, amending Item 601 of Regulation S-K and Rules 102 and 105 of Regulation S-T. Read more in our eUpdate here: https://www.dorsey.com/newsresources/publications/client-alerts/2017/03/sec-adopts-use-of-exhibit-hyperlinks-in-filings

Exchange Act Reporting and Disclosure Effectiveness / SEC Rulemaking

6 Mar, 2017

Compliance with XBRL for Foreign Private Issuers that Prepare their Financial Statements in Accordance with IFRS Required Beginning with Annual Reports for Fiscal Periods Ending on or after December 15, 2017

On March 1, 2017, the United States Securities and Exchange Commission (SEC) published the taxonomy for the eXtensible Business Reporting Language (XBRL) for financial statements prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board (IFRS). Accordingly, foreign private issuers that prepare their financial statements in accordance with IFRS may immediately begin submitting their financial statements in SEC filings...

Ethics and Compliance / SEC Enforcement

24 Feb, 2017

General Counsel Permitted to Use Attorney-Client Privileged Information in Whistleblower Retaliation Case

In a recent case, Wadler v. Bio-Rad Laboratories, Inc. case number 3:15-cv-02356 (2016), the federal court in the Northern District of California ruled that the plaintiff and former general counsel of Bio-Rad Laboratories could use attorney-client privileged information to support his claim of whistleblower retaliation. The court determined that the Sarbanes-Oxley Act’s whistleblower protections preempt the state ethical rules against disclosure of attorney-client privileged information....

Governance &
Compliance Insider