Archives: Securities Laws

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U.S. Securities Enforcement Authorities’ Extraterritorial Reach Under Morrison, Dodd-Frank Act

Prior to the U.S. Supreme Court’s June 2010 decision in Morrison v. National Australia Bank, U.S. courts held that the U.S. securities laws could be applied extraterritorially if there was sufficient fraudulent conduct or were sufficient effects from that conduct in the U.S.  In Morrison the Supreme Court rejected this “conduct or effects” test, ruling … Continue Reading

More About Litigation Reform Bylaws: Will “No Pay” Provisions Succeed Where Forum Selection Bylaws Have Failed?

In recent years, we approached the point where nearly every M&A transaction attracted one or more merger objection lawsuit, which all too often was resolved through a “disclosure only settlement” in which the defendant company agreed to make supplemental deal document disclosures and to pay the plaintiffs’ attorneys fees, in exchange for a comprehensive release … Continue Reading

Guest Post: Supreme Court to Review Whether Statute of Limitations Applies to SEC Disgorgement Claims

Last Friday, the U.S. Supreme Court granted cert in two cases involving the limitations periods under the federal securities laws. One case, as I noted in a post earlier this week, will address the question of whether or not the filing of a securities class action tolls the Securities Act’s statue of repose. The second … Continue Reading

SEC Enforcement Activity Involving Public Companies

While the confirmation earlier this week that Mary Jo White will step down as SEC Chair at the end of the Obama administration raises interesting questions about the SEC’s possible future direction and priorities, the agency’s public company-related enforcement activities during the last fiscal year provide some very interesting insights about the SEC’s recent priorities. … Continue Reading

Guest Post: IPO Lock-Up Agreement Parties Not a “Group” Liable for Short-Swing Profits

In the following guest post, attorneys from the Paul Weiss law firm review and analyze a November 3, 2016  Second Circuit decision (here)  in which the appellate court held that the standard pre-IPO lock-up agreements between a company’s pre-IPO shareholders and the company’s lead IPO underwriters do not make those parties a “group” within Section … Continue Reading

Despite Record SEC Enforcement Activity, Senator Warren Calls for President to Fire Agency Chair

Perhaps SEC officials hoped they were bolstering their agency’s image as a tough regulator when they reported on October 11, 2016 that the SEC had filed a record number of enforcement actions in fiscal year 2016. That was certainly the way the officials quoted in the agency’s press release played it. But if that was … Continue Reading

Guest Post: Ninth Circuit Clarifies What Might Trigger SOX 304 Disgorgement

Among the many issues arising under the Sarbanes-Oxley Act are questions surrounding disgorgement under Section 304, particularly questions concerning what actions and whose actions might trigger disgorgement. In the following guest post, Bruce Ericson of the Pillsbury Winthrop Shaw Pittman law firm takes a look at the Ninth Circuit’s August 31, 2016 decision in U.S. … Continue Reading

SEC Enforcement Actions Decline

The SEC’s enforcement activity so far this fiscal year trails the record levels in the 2015 fiscal year. According to a recent report from Cornerstone Research (here), the SEC’s enforcement activity through the end of the fiscal third quarter (on June 30, 2016) is eight percent below the activity levels during the same period in … Continue Reading

Guest Post: General Solicitation Under Rule 506(b) After Citizen VC: Guiding Principles and Best Practices

In August 6, 2015, the SEC Division of Corporation Finance issued an interpretive letter to Citizen VC concerning exempt private offerings under Rule 506(b).  In the following guest post, Richard M. Leisner takes a look at the SEC’s new interpretive guidance for these types of exempt offerings and suggests how best practices might evolve for … Continue Reading

Supreme Court Asked to Clarify Private Company’s Federal Securities Law Stock Purchase Disclosure Duties

In the D&O insurance world, private company liabilities, exposures, and insurance are viewed as categorically distinct from public company liabilities, exposures, and insurance. There are completely separate and distinct insurance policy forms for each of the two categories of companies. In this traditional view, one of the key distinctions between two kinds of companies is … Continue Reading

Guest Post: The SEC’s Renewed Focus on Financial Reporting and Financial Fraud

While financial fraud has always been an important enforcement target for the SEC, the agency recently has shown increased attention to financial reporting cases. In the following guest post, Robert F. Carangelo, Paul A. Ferrillo and Andrew Cauchi of the Weil Gotshal law firm take a look at the SEC’s recent focus on financial reporting … Continue Reading

Theranos, the SEC, and the Enforcement of the Securities Laws Against Private Companies

In a speech last month, SEC Chair Mary Jo White signaled that the agency was going to be paying closer attention to private companies, particularly so-called “unicorns” – that is, the private venture-backed start-ups with valuations over $1 billion (as I discussed in a recent post). In her speech, White highlighted the concerns that can … Continue Reading

SEC Warning: It Is Watching Private Companies

The Securities and Exchange Commission is primarily concerned with public companies and the securities markets in which the shares of public companies trade. However, in a series of recent speeches and presentations as part of what the agency had called the “Silicon Valley Initiative,” the agency made it clear that it is increasingly concerned with … Continue Reading

Report: SEC Filed a Record Number of Enforcement Actions in FY 2015, Aggregate Fines and Penalties Declined

The SEC filed a record number of enforcement actions during FY 2015, but the aggregate value of fines, penalties, and disgorgements the agency collected during the fiscal year was well below the prior year’s total and long term averages, according to a detailed January 12, 2016 report produced in cooperation between the NYU Pollack Center … Continue Reading

Sharpening the Focus on Regulation A+ Offerings

Earlier this year, the SEC rules adopted rules amending Regulation A under the Securities Act to provide companies with an intermediate path between, on the one hand, exempt offerings to qualified investors only, and, on the other hand, a full-blown initial public offering of registered securities. Since the amended rules, known as Regulation A+, took … Continue Reading

JOBS Act 2.0 Poised to Become Law

The five-year transportation bill known as the Fixing America’s Surface Transportation (FAST) Act that a House-Senate conference committee agreed on earlier this week is not something we ordinarily would comment on here. But in that inestimable way that Congress manages to do things, the transportation bill contains so many provisions affecting public company financing and … Continue Reading

Guest Post: The Dos and Don’ts of an SEC Examination

The advent of an SEC investigation is a serious and difficult event in the life of any organization, particularly registered-investment advisors. As a result of recent changes at the agency, an SEC investigation may be more difficult than ever for registered-investment advisors. In the following guest post, Ildiko Duckor, Sarah A. Good and Corey Harris … Continue Reading
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