The SEC published in March 2022 a dauntingly complex proposal to require public companies to provide climate-related disclosures.[1] The period for public comment on the proposal is very short, and it seems clear that a majority of the Commission is determined to proceed quickly.
Continue Reading The SEC’s Climate Proposal – Top Points for Comment
Nick Grabar
SEC SPAC Proposal
On March 30, 2022, the SEC voted 3-1 (Commissioner Peirce dissenting) to propose a package of rules and rule amendments governing special purpose acquisition companies (SPACs), SPAC initial public offerings (IPOs) and SPAC mergers with a target company (de-SPACs). Part of the proposed amendments would also apply to any shell company business combination, whether or not a SPAC is involved.
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SEC Proposes Major Rule Changes on Trading Plans and Corporate Buybacks
On December 15, 2021, the SEC issued for public comment two separate proposals that will, if adopted, significantly affect how corporate directors, officers and employees trade securities of their companies and how companies repurchase their own shares.
This memorandum walks through the two proposals in turn and concludes with some general takeaways and possible issues
SEC Brings SPAC Enforcement Action and Signals More to Come
On July 13, 2021, the Securities and Exchange Commission (“SEC”) announced a major enforcement action related to a proposed merger between a special purpose acquisition company (“SPAC”) and a privately held target company (“Target”). This followed numerous warnings by the SEC staff over several months of enhanced scrutiny of such transactions under the federal securities laws.[1] The respondents, except for the Target’s CEO, settled the action by collectively agreeing to civil penalties of approximately $8 million and to certain equitable relief described below. [2]
Continue Reading SEC Brings SPAC Enforcement Action and Signals More to Come
SEC Charges Eight Companies and Signals Need for Better Disclosures About Delayed Filings
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…
Acting Director of SEC’s Corp Fin Issues Statement on Disclosure Risks Arising from De-SPAC Transactions
Last week, John Coates, the Acting Director of the SEC’s Division of Corporation Finance (“Corp Fin”), released a statement discussing liability risks in de-SPAC transactions.
The statement focused in particular on the concern that companies may be providing overly optimistic projections in their de-SPAC disclosures, in part based on the assumption that such disclosures are protected by a statutory safe harbor for forward-looking statements (which is not available for traditional IPOs). Director Coates’s statement questions whether that assumption is correct, arguing that de-SPAC transactions may be considered IPOs for the purposes of the statute (and thus fall outside the protection offered by the statutory safe harbor). He therefore encourages SPACs to exercise caution in disclosing projections, including by not withholding unfavorable projections while disclosing more favorable projections.
Continue Reading Acting Director of SEC’s Corp Fin Issues Statement on Disclosure Risks Arising from De-SPAC Transactions
Preparing An Annual Report on Form 20-F – Guide for 2021
This memorandum addresses the preparation of a foreign private issuer’s annual report on Form 20-F, describing changes in the form and related rules that have taken effect in 2020, and highlighting other areas for particular attention in the next annual report.
Please click here to read the full alert memorandum.
The Short-Termism Debate
A curious feature of the past three years has been the intertwined controversies over earnings guidance, corporate “short-termism” and the quarterly disclosure system. The discussion has been illuminating, and, while further regulatory attention now seems unlikely, the perils of neglecting the long-term will likely continue to color how analysts, regulators and investors view public companies and their disclosures.
Continue Reading The Short-Termism Debate
SEC Adopts Major Changes to MD&A and Related Requirements
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…
SPAC Sponsors Beware: The Rising Threat of Securities Liability
Special purpose acquisition companies or “SPACs” are an increasingly popular way for an existing private company to become publicly traded without undergoing a traditional initial public offering, and for investors in public markets to invest in growth-stage companies. There can be generous returns for SPAC sponsors, but they should be aware of the liability risk…