It is no secret that SEC Chair Paul Atkins has ideas about how U.S. securities laws could be reformed to “revitalize” America’s capital markets. Among other things, late last year Atkins proposed a number of revisions to the current U.S. public company disclosure regime. Now, in a speech earlier this week, Atkins floated several additional proposed reforms, among other things referring to the possibility of loser-pays bylaws for shareholder suits and of a “safe harbor” for public company disclosures concerning widely publicized events. As discussed below, Atkins’s recent ideas have a long and relevant history. The text of Atkins’s February 17, 2026, speech can be found here.

The occasion for Atkins’s speech was the Texas A&M’s School of Law’s Corporate Law Symposium, held at the Federal Reserve Bank of Dallas.

Atkins opened his remarks with a nod to the recent Texas corporate law reforms within the context of competition between the states for a greater share of corporate registrations. Among other things, he noted that “Texas has begun to build something that could offer an interesting alternative to Delaware, through a framework designed to attract companies with shareholders who are eager to get back to basics, with less politicization, abusive litigation, and overall drama.”

Atkins next went on to discuss what more Texas might do to “strengthen its position,” and then raised some ideas for “reforming the SEC’s disclosure regime.”

In the context of what other reforms Texas might consider, Atkins expressly raised the possibility that another reform measure Texas might consider is instituting a reform requiring the loser in shareholder litigation to pay the winning party’s attorneys’ fees. He noted that while the standard U.S. model is for each party to bear its own costs, other parties, such as England follow a “loser pays” model. These other jurisdictions’ approach, Atkins suggested, “could serve as examples for Texas to follow.”

Atkins then referred to the SEC’s recently revised policy stance on mandatory arbitration bylaws. He noted that while the SEC has for its part made it clear that it no longer has a policy against these kinds of provisions for IPO companies, some jurisdictions – Delaware, for example – do not permit companies to adopt these kinds of bylaws. What, Atkins asked rhetorically, would Texas do?

Atkins’s question pretty obviously signals his belief that Texas might want to consider affirmatively allowing corporations organized under its laws to adopt mandatory arbitration bylaws.  

Atkins then went on to suggest some further public company disclosure reforms that the SEC might consider. Atkins proposed several ideas to simplify requirements in order to shorten and modernize public company disclosures. Among other things, Atkins’s proposals included suggested reforms to executive compensation disclosures; Regulation S-K requirements; and risk factor disclosure. Atkins’s proposed reforms are quite detailed and I do not propose to review them all here. Readers interested in Atkins’s more detailed proposals will want to refer to John Jenkins’s February 18, 2026 post about Atkins’s speech on the TheCorporateCounsel.net blog (here).

There is one feature Atkins’s suggested disclosure reforms that I find interesting and that I think is worth discussing here, and that is his proposal for a “safe harbor” for public company disclosures concerning widely publicized events.

The SEC, Atkins said, could “adopt a rule stating that failure to disclose impacts from publicized events that are reasonably likely to affect most companies will not constitute material omissions for purposes of some or all of the federal securities laws’ anti-fraud rules.”

A safe harbor provision of this type would have the virtue of shortening already too-lengthy risk factor disclosures, as it would “incentivize companies to include fewer generic risk factors by shielding them from liability for events related to those generic risks.” After all, Atkins said, “if companies are not compelled to catalogue nearly every conceivable contingency to guard against hindsight litigation, then they can focus on risks that are more distinctive to their business.”

Discussion

Corporate and securities litigation observers will want to read and consider Atkins’s various proposals here, as many of them at least potentially could have a significant impact on D&O claims.

For starters, Atkins pretty much encouraged Texas to consider, as part of its jurisdictional competition for company incorporations, to adopt a provision (in contrast to Delaware) expressly allowing Texas companies to adopt mandatory arbitration bylaws. Were Texas to take this step, it certainly could have an impact on the number of companies that might consider adopting these kinds of provisions and could contribute to an increase in the number of companies with these kinds of bylaws.

Atkins’s remarks encouraging Texas to consider allowing companies to adopt “loser pays” fee-shifting provisions is also interesting. Long-time readers know that the idea of allowing companies to adopt fee-shifting by laws has a long history.

There was, as many readers will recall, quite the dust-up in Delaware a few years ago after the Delaware Supreme Court issued a ruling upholding the facial validity of a fee-shifting by law in effect requiring a “loser pays” model in shareholder litigation. The Delaware legislature, responsive to concerns among members of the Delaware bar that allowing fee-shifting could undermine lucrative shareholder litigation in Delaware’s courts, quickly passed a provision prohibiting fee-shifting bylaws and putting a quick end to the kerfuffle over these kinds of provisions.

In the interim, other legislatures have entertained the idea of allowing companies in their jurisdiction to adopt fee-shifting provisions; as discussed here, a few years ago Nevada’s legislature considered allowing companies to adopt fee-shifting provisions at least in some contexts. The proposed Nevada legislation apparently died in Committee.

 Atkins’s remarks aimed to suggest that Texas should now allow these kinds of  “fee-shifting” provisions. I don’t think I am going out on a limb here to suggest that at some point we might see a proposal of this kind out of Texas. Don’t hold your breath, though. Texas’s legislature only meets every other year, and the next session of the Texas legislature will not meet until January 2027. (However, the Texas governor does have the power to call the legislature for a “special session” between the biannual meetings.) The more interesting question is whether other states might follow if Texas were to adopt a fee-shifting provision.

Atkins’s proposal for a safe harbor for reporting companies with respect to widely publicized events is, at least at the theoretical level, interesting to me. I have long worried about what I have called “event-driven” litigation. (No one else cares, but I do think it is noteworthy that I actually coined the expression “event-driven litigation.”). The perspective that event driven litigation is a problem has been significantly amplified by Bloomberg columnist Matt Levine, who has famously advanced the proposition that  “Everything Everywhere is Securities Fraud” (here). The idea that event driven litigation itself represents a problem has in fact been actively debated (about which  refer, for example, here).

Atkins’s proposal in his recent remarks lacks details on exactly what the safe harbor might look like, how it would work, and what it would protect, but at least at the theoretical level the “safe harbor” could provide public companies with some protection against event-driven litigation, and for that reason alone his proposal is interesting. It remains to be seen whether the SEC will in fact put out a concrete proposal to provide substance to Atkins’s theoretical proposition, but if Atkins’s suggestion does lead anywhere, this could be a very interesting.

The one thing that is clear is that it seems likely that Atkins will continue to propose and possibly advance ideas that could at least potentially have a significant impact on corporate and securities litigation. Stay tuned.