David Lopez

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On March 6, 2024, the U.S. Securities and Exchange Commission approved in a 3-2 vote final rules that require most reporting companies to provide certain climate-related information in their registration statements and annual reports filed with the SEC. This memorandum summarizes a portion of the final rules, the amendments to Regulation S-X, as amended (Regulation S-X), under the Securities Act of 1933, as amended (the Securities Act), and the Securities Exchange Act of 1934, as amended (the Exchange Act), that require a new footnote in audited financial statements, analyzes some of the key challenges these requirements may impose and concludes with some general takeaways. This memorandum does not address the GHG emissions and attestation report disclosure requirements or the governance, business, risk and targets disclosure requirements set forth in the final rules’ amendments to Regulation S-K, as amended (Regulation S-K), under the Securities Act and Exchange Act.Continue Reading SEC’s Final Climate-Related Disclosure Rules: A Closer Look at the Climate Note to Audited Financial Statements

With a stroke of the pen, the Delaware Court of Chancery invalidated commonplace provisions in scores of stockholder agreements relating to public corporations and likely many more relating to private corporations.  In West Palm Beach Firefighters’ Pension Fund v. Moelis & Company (“Moelis”)[1], Vice Chancellor J. Travis Laster, struck down an entire package of stockholder veto rights and held that provisions in a stockholder agreement purporting to restrict the size of the board of directors, requiring the board to recommend in favor of a stockholder nominee, requiring the board to fill any vacancy on the board with a stockholder nominee or to include a stockholder nominated director on committees of the board, are all facially invalid as a matter of Delaware law.  Vice Chancellor Laster noted that many of these provisions would have been valid if set out in the corporation’s certificate of incorporation, rather than in the stockholder agreement.Continue Reading Delaware Court of Chancery Invalidates Common Provisions in Stockholder Agreements

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2024”.

Artificial intelligence (AI) was the biggest technology news of 2023. AI continues to revolutionize business in big and small ways, ranging from disrupting entire business models to making basic support functions more efficient. Observers have rightly focused on the plentiful value-creation opportunities this new technology affords. Less attention has been given to the risks AI creates for boards and management teams, which call for sophisticated governance, operational and risk perspectives. This article identifies key areas of risk and offers suggestions for mitigation on the road to realizing the enormous benefits AI promises.Continue Reading AI May Do Wonders for Your Business, But What About Your Risk Profile?

On April 29, 2021, the Securities and Exchange Commission (the “SEC”) announced settled charges against eight public companies that filed notifications of late filings on Form 12b-25 (more commonly known as “Form NT”) without disclosing in those filings a pending restatement or correction of financial statements.

These settlements are a reminder that filing a Form…

Corporate sustainability has in a few short years become a mainstream capital allocation and voting criterion for many institutional investors. As a consequence, those investors are calling for consistent, comparable and reliable sustainability disclosure capturing the risks and opportunities faced by the businesses in which they invest.
Continue Reading Corporate Sustainability: Moving Faster and Faster to the Center of Strategy and Shareholder Value

On November 19, 2020, the Securities and Exchange Commission adopted amendments to Regulation S-K, including changes to its MD&A requirements that will make significant and long-overdue improvements to a central disclosure requirement of the U.S. securities laws. The twin themes of the amendments are dropping outmoded requirements and taking a more principles-based approach.

The amendments…

On August 26, the SEC revised several disclosure requirements applicable to reporting companies. The amendments embrace a “principles-based” approach in the hope that it will elicit more focused and useful disclosures.  They will also require issuers to focus on human capital disclosures and on the organization of risk factor disclosures, and some will have to…

For more than a decade, the SEC has been wrestling with whether and how to regulate the activities of the proxy advisory firms – principally ISS and Glass Lewis – that have come to play such an important role in shareholder voting at U.S. public companies.  On July 22, 2020, the SEC adopted rules and…