Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Oregon State Court Refuses to Enforce Forum Selection Bylaw

Posted in SEC/Corporate

In Roberts v. TriQuint Semiconductor, Inc., No. 1402-02441 (Cir. Ct. Or. Aug 14, 2014), an Oregon state court, breaking with state courts in California, Illinois, New York and Texas, held that the bylaw of a Delaware corporation providing for derivative actions and other intra-corporate claims to be litigated exclusively in Delaware was unenforceable. TriQuint’s board adopted the bylaw on the same day that it approved entering into a merger of equals with RF Micro Devices, Inc. Continue Reading

SEC Announces Pilot Program to Widen Tick Sizes for Smaller Companies

Posted in Broker-Dealer

On August 26, the Securities and Exchange Commission announced that the Financial Industry Regulatory Authority, Inc. and national securities exchanges proposed a 12-month pilot program to widen minimum quoting and trading increments (tick sizes) for smaller capitalization stocks. In June, the SEC had ordered FINRA and national securities exchanges to propose a tick size pilot program. Under the proposal, the pilot program will include National Market System common stocks with (i) a market capitalization of $5 billion or less, (ii) an average daily trading volume of one million shares or less, and (iii) a closing share price of at least $2 per share. Continue Reading

NFA Issues Notice Setting Effective Date for Risk Exposure Report Filing Through WinJammer

Posted in CFTC, Dodd-Frank Developments

On August 22, National Futures Association issued Notice I-14-20 to advise swap dealers (SDs) and major swap participants (MSPs) that, effective September 30, SDs and MSPs will be required to submit quarterly Risk Exposure Reports to NFA and the Commodity Futures Trading Commission through WinJammer. The Notice implements recent amendments to NFA Compliance Rule 2-49, which authorizes NFA to require SDs and MSPs to submit requested reports, documents and notices to both NFA and the CFTC in a form and manner prescribed by NFA. SDs and MSPs must contact NFA by September 12 to obtain access to WinJammer. 

NFA Notice I-14-20 is available here.

CFTC Staff Issues Interpretation of Secured Amount Depository Requirements

Posted in CFTC, Dodd-Frank Developments

On August 28, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) issued an Interpretation of CFTC Regulation 30.7(c) that permits a futures commission merchant (FCM) to deposit Regulation 30.7 secured amount funds into deposit accounts maintained by deposit-taking banks licensed in the United Kingdom. Continue Reading

Second Circuit Holds Contractual Forum Selection Clause Supersedes FINRA Mandatory Arbitration Rule

Posted in Litigation

On August 21, the US Court of Appeals for the Second Circuit decided two closely watched appeals regarding the intersection of Financial Industry Regulatory Authority, Inc. rules regarding mandatory arbitration of disputes and contractual forum selection clauses providing for a judicial forum. Goldman, Sachs & Co. v. Golden Empire Schools Financing Authority, et al., Nos. 13-797-cv; 13-2247-cv (2d Cir. Aug. 21, 2014). The Second Circuit’s decision in Golden Empire provides important guidance for broker-dealers and institutional market participants in drafting and interpreting forum selection clauses. Continue Reading

Delaware Court Denies Attorneys’ Fees for Stockholders in Appraisal Proceedings

Posted in Litigation

The Delaware Court of Chancery recently held that certain stockholders who launched appraisal proceedings challenging a merger lacked standing to obtain reimbursement of attorneys’ fees from a $10.7 million settlement in a separate class action challenging the same merger.  Continue Reading

SEC Charges Executive With Insider Trading Ahead of Client Announcements

Posted in Litigation

The Securities and Exchange Commission recently filed a complaint in the US District Court for the Southern District of New York against a director at an investor relations firm charging him with multiple instances of insider trading ahead of impending news announcements by clients. Continue Reading

Financial Conduct Authority Provides Guidance on Its Approach to Attestations for FCA Authorized Firms

Posted in UK Developments

On August 26, the UK Financial Conduct Authority (FCA) published a letter dated August 22, 2014 (Letter) addressed to the FCA Practitioner Panel. The Panel is a statutory body representing the interests of the financial services industry that was established to ensure that the FCA effectively consults with practitioners and consumers in connection with its rules and guidance. The Letter is the FCA’s formal response to the FCA Practitioner Panel’s request for more detailed guidance on the principles under which the FCA’s attestation powers operate – which had previously been unclear. Continue Reading

A Reminder About Careful Drafting of Confidentiality Clauses

Posted in UK Developments

The recent decision by the High Court of England and Wales (Chancery Division) in Richmond Pharmacology Limited (Company) v. Chester Overseas Limited, et al. underscores the need to carefully draft confidentiality clauses and to incorporate specific exceptions where these exceptions are reasonably foreseeable in the future. Continue Reading

Update on Timing and Scope of ESMA Clearing Obligations

Posted in Derivatives, Dodd-Frank Developments, EU Developments, Financial Markets

On August 18, the consultation period closed for responding to the draft regulatory technical standards (RTS) published by the European Securities and Markets Authority (ESMA) for the mandatory clearing of certain interest rate swaps (IRS) as required under the European Market Infrastructure Regulation (EMIR). The consultation period for credit default swaps (CDS) will close on September 18. Continue Reading