On August 17, President Donald Trump announced via Twitter that, after speaking with “some of the world’s top business leaders” concerning ideas to improve business in the US, he has asked the Securities and Exchange Commission to study the current requirement that publicly traded companies report financial results on a quarterly basis and explore the

On August 10, the staff of the Securities and Exchange Commission published A Small Entity Compliance Guide for Issuers (the Guide), which summarizes and explains rules adopted by the SEC with respect to the recently amended definition of “smaller reporting company” and the accommodations available to smaller reporting companies. The Guide is one of a

On August 13, President Trump signed into law the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). The new law expands the jurisdiction and powers of the Committee on Foreign Investment in the United States (CFIUS) and will have material implications for investments made in US businesses by foreign investors. Certain provisions of the new law went into effect immediately. Others will become effective after implementing regulations are adopted.
Continue Reading

In a recently issued letter decision, the Delaware Court of Chancery reiterated the general rule that directors have an unencumbered right to access corporate information (with certain exceptions). The case involves a dispute between two groups of directors—those affiliated with a controlling stockholder, and those that are not. An affiliated director filed a motion to compel the production of information, including corporate communications between (1) unaffiliated directors and officers of the corporation and company counsel; and (2) members of a special committee formed specifically to negotiate with the controlling stockholder and that committee’s own independent counsel. The court largely granted the affiliated director’s request, with the exception of communications between the special committee and its counsel.
Continue Reading

On June 28, the Securities and Exchange Commission announced that it adopted amendments to the definition of “smaller reporting company,” which will allow more companies to take advantage of accommodations such as scaled disclosure. The amendments were adopted generally as proposed on June 27, 2016, with a few significant changes. The proposed amendments were previously covered in the July 8, 2016 edition of the Corporate & Financial Weekly Digest.
Continue Reading

As previously reported in the Corporate & Financial Weekly Digest edition of June 1, 2018, on May 24, President Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act (the Act), Section 507 of which directs the Securities and Exchange Commission to adopt an amendment to Rule 701 under the Securities Act of 1933. Rule 701 generally provides an exemption from the registration requirement imposed by the Securities Act for issuances of securities by a company that is not subject to the reporting requirements of the Securities Exchange Act of 1934 to its employees, directors and consultants under compensatory benefit plans. Pursuant to Section (e) of Rule 701, if the aggregate sales price or amount of securities sold by an issuer to investors in reliance on Rule 701 during any 12-month period exceeds $5 million, the issuer is required to deliver to investors an additional disclosure, including specified financial statements and risk factors. On July 18, consistent with the mandate under the Act, the SEC issued a final rule amending Section (e) of Rule 701 to increase the threshold for providing enhanced disclosure from $5 million to $10 million (subject to inflation adjustment every five years).
Continue Reading

On May 24, President Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act. While the Act primarily serves to relieve smaller financial institutions from the burden of complying with certain requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Act also directs the Securities and Exchange Commission to adopt amendments to Rule 701 under the Securities Act of 1933 (Securities Act) and so-called “Regulation A+,” as summarized below.  
Continue Reading

On May 11, the staff of the Division of Corporation Finance of the Securities and Exchange Commission (the Staff) issued 45 Compliance and Disclosure Interpretations (C&DIs) that relate to the proxy rules and proxy statements, replacing the Staff’s prior interpretations that were published in the Proxy Rules and Schedule 14A Manual of Publicly Available Telephone Interpretations (the Manual) and the March 1999 Supplement to the Manual (the Supplement). Thirty-five of the C&DIs reiterate prior guidance from the Manual and the Supplement. This article highlights the six C&DIs that reflect substantive changes and the four C&DIs that reflect technical changes to the prior guidance in the Manual and the Supplement. The Staff also noted that it is in the process of updating other previously published interpretations relating to the proxy rules.
Continue Reading

The Securities and Exchange Commission’s Division of Corporation Finance issued two new Compliance and Disclosure Interpretations (C&DI), expanding its previously issued guidance related to the exemption from Item 10(e)(5) under Regulation S-K and Regulation G for non-GAAP financial information provided to a financial advisor in forecasts for business combination transactions. The previously issued guidance was discussed in the November 3, 2017 edition of the Corporate & Financial Weekly Digest.
Continue Reading