In a development that unquestionably raises the heat on SPACs and SPAC sponsors, a group of four Democrat senators has sent each of six serial SPAC creators a letter raising questions about the creators’ SPAC-related activities and financial rewards. The letters’ purpose ostensibly is to allow the Senators to “understand what sort of Congressional or regulatory action may be necessary to better protect investors and market integrity.” Copies of the Senators’ September 22, 2021 letters can be found here. Senator Elizabeth Warren’s September 22, 2021 press release about the letters can be found here.
Continue Reading Senators’ Letters Raise the Heat on SPACs, Sponsors

On June 15, 2021, the SEC announced that that it had settled charges that a title insurance company’s cybersecurity disclosure controls and procedures violated the agency’s public company reporting requirements. The title insurance company, First American Financial Corp., which neither admitted or denied the charges, agreed to a cease-and-desist order and to pay a penalty. The charges do not represent the first time the SEC has pursued actions against a company for cybersecurity-related disclosures, but they do underscore the agency’s focus on cybersecurity disclosure-related issues, a topic that may be a source of increased focus ahead.
Continue Reading Title Insurance Company Settles SEC Cybersecurity Disclosure-Related Charges

Since it was first instituted nearly 21 years ago, SEC Rule 10b5-1 has provided corporate executives with a way to trade in their company’s securities while avoiding potential liability under the federal securities laws. However, the Rule has been dogged by controversy and questions of potential abuse have been raised for years. Now, in remarks published earlier this week on the Wall Street Journal (here), SEC Chair Gary Gensler has said that the SEC is drafting a proposal to revise the Rule’s requirements to target some of the perceived abuses. The Cooley law firm’s PubCo blog has a detailed account of Gensler’s remarks in a June 8, 2021 post (here).
Continue Reading SEC to Revise Rule 10b5-1 Trading Plan Requirements

Last month, the U.S. House of Representatives passed the Insider Trading Prohibition Act, a bill intended to amend the Securities Exchange Act of 1934 to address insider trading issues. In the following guest post, Partners Brooke Cucinella and Michael Osnato, Counsel Anar Rathod Patel, and Associate Rebecca Sussman, all of the Simpson Thacher law firm, analyze the bill and discuss its implications. A version of this article was previously published as a Simpson Thacher client memorandum. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: Developments in Insider Trading Enforcement: The House Passes the Insider Trading Prohibition Act

Is the SEC staff about to issue guidelines specifying that the safe harbor for forward looking statements does not apply to SPAC merger transactions? An April 28, 2020 exclusive report on Reuters (here) says that the SEC is considering taking the step. If the agency were to issue guidance restricting the availability of the safe harbor for SPACs, it could significantly restrict SPAC’s use of target company projections in advance of de-SPAC mergers, and even further slow the already cooling SPAC market. The SEC’s possible action is discussed further in an April 29, 2021 post on the Cooley law firms PubCo blog, here.
Continue Reading Are SEC Guidelines on SPAC Projections Ahead?

If things these days for the rest of you are the way they are for me, then all of you are basically finding out that SPACs are taking over your life. All SPACs, all the time. Wall to wall SPACs. At one level, this development should come as no surprise, as the sheer volume of SPAC activity is nothing short of astonishing. According to SPACInsider (here), since January 1, 2020, there have been a total of 554 SPAC IPOs completed – 308 in the three and a half months of 2021 alone. A further 261 SPAC IPO Registrations are currently pending. A staggering 435 post-IPO SPACs are currently in the process of trying to identify merger partners.  Along with this wave of financial activity has come an accompanying flow of SPAC-related news and information. I have identified below just a few of the many SPAC-related items that crossed my desk in the last week; the selected items underscore the opportunities and risks involved in the SPAC-crazy world that we all now inhabit. And as also noted below, there could be some hints of a slowdown as well.
Continue Reading All SPACs, All the Time

President Biden’s nominee to head the SEC, Gary Gensler, faced a grilling today before the U.S Senate banking committee as his nomination  proceeds through Congress. Although the outcome of his nomination technically remains uncertain, his eventual confirmation seems likely. With that possibility in mind, it seems timely to look ahead at some of the issues the agency may address and initiatives the agency may advance under the new administration.  As it is, because of some initiatives that already underway, it is possible to project where we might be headed, at least to a certain extent.
Continue Reading What’s Ahead at the SEC?

David H. Topol

In the following guest post, David H. Topol of the Wiley law firm reviews the important legal and regulatory developments affecting private investment funds during 2020. I would like to thank David for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is David’s article.
Continue Reading Guest Post: Private Investment Funds: Major Developments from 2020

David H. Topol

In the following guest post, David H. Topol of the Wiley law firm takes a look at the recent decision by the U.S. Securities and Exchange Commission to amend the agency’s operative definition of the term “accredited investor.” A copy of the agency’s final rule incorporating the revised definition can be found here. The agency’s August 26, 2020 press release about the change can be found here. I would like to thank David for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is David’s article.
Continue Reading Guest Post: SEC Definition of “Accredited Investor”: A Step Forward or Backward?

According to a new report from Cornerstone Research, the number of accounting and auditing enforcement actions the SEC initiated in 2019 was down slightly from the number initiated in 2018, but the number remained near the 2014-2018 average. Monetary settlements of accounting and auditing enforcement actions during 2019 totaled approximately $626 million.  The June 25, 2020 report, which also summarizes accounting and auditing enforcement activity initiated by the PCAOB, is entitled “Accounting and Auditing Enforcement Activity – 2019 Review and Analysis” and can be found here. Cornerstone Research’s June 25, 2020 press release about the report can be found here.
Continue Reading SEC Accounting and Auditing Enforcement Actions Down Slightly in 2019