Austin G. Leach

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On July 1, the Securities and Exchange Commission approved the NASDAQ Stock Market LLC’s proposed Rule 5250(b)(3) (Rule), which requires listed companies to publicly disclose the material terms of all agreements and arrangements between any director or nominee and any person or entity other than the company (Third Party) relating to compensation or other payment in connection with such person’s candidacy or service as a director. The Rule requires that such disclosure may be made either on the issuer’s website, which may include hyperlinking (as long as such website or hyperlink is continuously available), or in a proxy statement or information statement for any shareholders’ meeting at which directors are elected (or, if such company does not file proxy or information statements, on Form 10-K or Form 20-F).
Continue Reading SEC Approves NASDAQ’s ‘Golden Leash’ Disclosure Rule

The Securities and Exchange Commission recently published its agenda with respect to upcoming rulemaking, including rulemaking contemplated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. In setting its agenda, the SEC established target dates for taking various rulemaking actions, including setting an April 2017 target for the following measures:
Continue Reading SEC Releases Target Dates for Proposed and Final Rulemaking

On October 30, the Securities and Exchange Commission proposed amendments to modernize: (1) Rule 147, promulgated under the Securities Act of 1933 (Securities Act) as a safe harbor exempting intrastate offerings from federal registration under the Securities Act, to further facilitate intrastate offerings and capital formation in light of recently-adopted crowdfunding provisions under state securities laws; and (2) Rule 504 of Regulation D under the Securities Act, which permits companies that are not SEC reporting companies to sell securities to an unlimited number of persons without regard to wealth or sophistication (and, if certain conditions are met, to engage in general solicitation and issue freely tradable securities), to increase the amount of securities that may be sold pursuant to the rule.
Continue Reading SEC Proposes Amendments to Rules 147 and 504

On September 23, the Securities and Exchange Commission Advisory Committee on Small and Emerging Companies (Advisory Committee) met to discuss, and submit to the SEC, recommendations regarding (1) public company disclosure effectiveness, focusing on the definition of “smaller reporting company” and disclosures by smaller reporting companies; (2) modernizing Rule 147 under the Securities Act of 1933 (a “safe harbor” for intrastate securities offerings) to facilitate recently enacted and future state-based crowdfunding initiatives; and (3) the regulation of finders and other intermediaries in small business capital formation transactions. Additionally, the SEC announced its renewal of the Advisory Committee (the term of which was originally scheduled to expire in September 2015) for an additional two years.
Continue Reading SEC Advisory Committee on Small and Emerging Companies Makes Recommendations

On August 5, the Securities and Exchange Commission adopted the final rule regarding pay ratio disclosure that amends Item 402 of Regulation S-K to implement Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The final rule is generally consistent with the September 2013 proposed rule, which was highlighted in the Corporate & Financial Weekly Digest edition of September 20, 2013, and requires an issuer to disclose the ratio of the compensation of its chief executive officer (CEO) to the median compensation of all of its employees. The pay ratio disclosure will be required in an issuer’s annual reports on Form 10-K, registration statements and proxy and information statements to the extent that such filings require the disclosure of a summary compensation table pursuant to Item 402(c) of Regulation S-K.
Continue Reading SEC Finalizes Rule on Pay Ratio Disclosure

On July 1, the Securities and Exchange Commission proposed for public comment a new rule and rule amendments to implement provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In particular, proposed Rule 10D-1 under the Securities Exchange Act of 1934, as amended (Exchange Act), would require national securities exchanges to adopt listing standards that require listed companies to develop, implement and disclose incentive-based executive compensation recovery (clawback) policies. Under the proposed rule, a company would be subject to delisting if it did not adopt a clawback policy that complies with the applicable listing standard, properly disclose the policy or comply with the policy’s clawback provisions.
Continue Reading SEC Proposes Rule Requiring Executive Compensation Clawbacks

On March 13, the Securities and Exchange Commission charged eight officers, directors and major shareholders for failing to update material changes in their stock ownership disclosures on Schedule 13D in connection with certain “going private” transactions. The respondents, who neither admitted nor denied the allegations, settled the proceedings by paying to the SEC fines totaling more than $250,000.

Under Section 13(d) of the Securities Exchange Act of 1934 (the Act), certain beneficial owners holding more than 5 percent of a public company’s stock are required to promptly file Schedule 13D amendments following material changes in any previously reported information, including plans or proposals for going private transactions. The SEC’s charges related to outdated disclosures filed by the respondents, who took such steps as determining the form of the going private transaction, obtaining waivers from preferred shareholders and assisting with shareholder vote projections. When viewed together, the SEC argued, such steps resulted in a material change from the disclosures in the respondents’ respective Schedule 13D filings.
Continue Reading SEC Charges Insiders for Failure to Update Schedule 13D Disclosures

The Securities and Exchange Commission has announced that it will host a roundtable on February 19 on ways to improve the proxy voting process, with a focus on universal proxy ballots and retail (non-institutional) shareholder participation in the proxy process. The roundtable will consist of the following two panels:

  • The first panel will examine (1)

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The Securities and Exchange Commission recently published its agenda with respect to upcoming rulemaking, including rulemaking contemplated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the Jumpstart Our Business Startups Act (JOBS Act).
Continue Reading SEC Sets October 2015 Target Date for Certain Dodd-Frank and JOBS Act Rulemaking