David S. Kravitz

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On January 16, Securities and Exchange Commission Chair Mary Jo White announced that she has directed the SEC’s staff (Staff) to review Rule 14a-8(i)(9) promulgated under the Securities Exchange Act of 1934, which allows an issuer to exclude a shareholder proposal that “directly conflicts” with one of the issuer’s own proposals. Chair White’s directive is a result of uncertainty created by the Staff’s no-action letter issued to Whole Foods Market, Inc., which is described in detail in the Corporate and Financial Weekly Digest edition of December 12, 2014.
Continue Reading SEC Chair Directs Staff to Review Commission Rule Excluding Conflicting Proxy Proposals

A recent court decision and no-action letter have brought to light new issues surrounding issuer requests for Securities and Exchange Commission no-action relief with respect to the ability to exclude shareholder proposals from the issuer’s proxy statement.
Continue Reading Recent Developments Relating to Rights to Exclude Shareholder Proposals from Proxy Statements

On November 18, the US Court of Appeals for the District of Columbia Circuit granted the petitions of the Securities Exchange Commission and Amnesty International for a panel rehearing of the lawsuit challenging the SEC’s conflict minerals rule. 
Continue Reading US Court of Appeals for the District of Columbia Circuit Grants Petition for Rehearing of Decision on Conflicts Minerals Rule

On October 9, the Investor Advisory Committee (Committee) established by the Securities and Exchange Commission released its recommendations for changes to the definition of “accredited investor” included in Rule 501 promulgated under the Securities Act of 1933 (Securities Act). Specifically, these recommendations relate to the determination of “accredited investor” status with respect to natural persons. The Committee’s recommendations are part of the SEC’s review of such definition that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. 
Continue Reading SEC Investor Advisory Committee Releases Recommendations on Changes to Accredited Investor Definition

On August 4, the Securities and Exchange Commission’s Office of Investor Education and Advocacy issued an Investor Alert to assist investors in identifying potentially fraudulent private placements.
Continue Reading SEC’s Office of Investor Education and Advocacy Releases Alert on Identifying Fraudulent Private Placements

On November 14, Securities and Exchange Commission Chair Mary Jo White delivered a letter to Representative Scott Garrett, Chairman of the House of Representatives Subcommittee on Capital Markets and Government-Sponsored Enterprises for the House Financial Services Committee, in which she answered a number of Representative Garrett’s questions regarding the status of the SEC’s review of the definition of “accredited investor” under Rule 501(a) promulgated under the Securities Act of 1933 (Securities Act). The SEC’s review of the accredited investor definition with respect to individuals was mandated by the Dodd–Frank Wall Street Reform and Consumer Protection Act and is currently underway. Any changes to the definition of accredited investor will be closely watched, because such changes will impact which individuals may participate in private offerings of securities conducted under Rule 506 promulgated under the Securities Act, including under new subsection (c), which allows for general solicitation and general advertising.
Continue Reading SEC Chair Mary Jo White Outlines Potential Changes to “Accredited Investor” Definition

On October 9, the Securities and Exchange Commission launched a new website (www.sec.gov/marketstructure) designed to provide investors and other market participants with the ability to analyze market metrics and to access the SEC’s empirical research and analyses on market structure. The new website disseminates aggregated data drawn from the SEC’s Market Information Data Analytics System (MIDAS), which provides the SEC with a billion records each day from the consolidated tapes and feeds of national securities exchanges.
Continue Reading SEC Launches Public Website for Analyzing Exchange Data

On July 23, the US District Court for the District of Columbia issued a decision granting the Securities and Exchange Commission’s motion for summary judgment in a challenge to the SEC’s “conflict minerals” rule that was promulgated in August 2012. As discussed in detail in the Corporate and Financial Weekly Digest edition of August, 24, 2012, and a Katten Client Advisory of August 31, 2012, Rule 13p-1 (Conflict Minerals Rule) under the Securities Exchange Act of 1934, as amended (Exchange Act), and the related requirements of Form SD, require each registrant that files reports with the SEC under Sections 13(a) or 15(d) of the Exchange Act (i) to determine whether it is covered by the Conflict Minerals Rule, (ii) if the rule is applicable to the issuer, to conduct a reasonable country of origin inquiry for its conflict minerals and (iii) if the issuer knows or has reason to believe that its conflict minerals may have originated in the Democratic Republic of Congo (or its adjoining countries), to use due diligence to more definitively determine the source and chain of custody of its conflict minerals and, in certain circumstances, to file a Conflict Minerals Report with the SEC.   
Continue Reading District Court Rejects Challenge to SEC Conflict Minerals Rule

On July 2, the US District Court for the District of Columbia vacated the resource extraction issuer disclosure rule that the Securities and Exchange Commission adopted last year in accordance with mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Rule 13q-1 under Securities Exchange Act of 1934, as amended, the resource extraction issuer rule, would have required an issuer engaged in the commercial development of natural gas, minerals and oil resources to publicly disclose, on new “Form SD,” detailed information about payments made by the issuer, a subsidiary of the issuer or another entity under the issuer’s control to the US federal government or foreign governments in connection with the development of such resources. The Court vacated and remanded the rules to the SEC, which may either appeal the Court’s ruling or promulgate a new rule in accordance with the Court’s ruling.
Continue Reading District Court Vacates SEC’s Resource Extraction Issuer Rule