On October 30, 2015, by a 3-1 vote, the SEC adopted final rules to permitting small companies to raise funds by selling shares to the investing public through crowdfunding offerings conducted on Internet fundraising portals. In this long-awaited vote, which represented the last remaining significant rulemaking procedure required by the Jumpstart our Business Startups (JOBS) Act of 2012, the agency finally authorized, in slightly modified form, the rules it had first proposed in October 2013. The agency’s October 30, 2015 press release announcing its action and describing the final rules can be found here. The 686-page adopting release can be found here.
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Guest Post: How the Supreme Court’s Loughrin Decision May Narrow the Scope of Securities Fraud
In the following guest post, Arkady Bukh, founding partner of Bukh Law Firm, takes a look at the U.S. Supreme Court’s 2014 decision in Loughrin v. United States (here) and examines how the Court’s holding with respect to the federal bank fraud statute could reach far beyond the realm of bank fraud to reach the securities fraud arena.
I would like to thank Arkady for his willingness to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this blog. Please contact me directly if you would like to submit a guest post.
Arkady’s guest post follows below. The Bukh Law Firm is dedicated solely to criminal defense. You can contact Arkady at Bukh Law Firm, P.C., 14 Wall St, New York NY 10005, (212) 729-1632, https://www.nyccriminallawyer.com
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Resolving a Four Way Split
The federal bank fraud statute provides: “Whoever knowingly executes, or attempts to execute, a scheme or artifice – (1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned more than 30 years, or both.” 18 U.S.C. § 1344.
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So Why Should Delaware Corporate Law Predominate?
One feature of the U.S. corporate law environment that always strikes outside observers and new initiates as odd is the predominance on the legal landscape of the law of Delaware. The tiny Eastern seaboard state is the second smallest U.S. state by size; only five states are smaller by population, yet its corporate laws outweigh those of any other state. Over half of the U.S. listed companies are incorporated in Delaware. Nearly two thirds of Fortune 500 companies are organized under the laws of Delaware.
Questions about Delaware’s outsized role in the corporate legal world are nothing new. But when the Wall Street Journal runs a front page article questioning Delaware’s role, it might be time to start wondering of Delaware’s predominance might actually be under challenge.
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Guest Post: The Importance of Inferiority as a Basis for Leveling the SEC’s Enforcement Action Playing Field
One of the controversies in which the SEC recently has found itself involved has been the agency’s use of its own in-house administrative tribunals, where some believe that the agency has an unfair advantage. The increased use of its administrative courts has also drawn court challenges. In the following guest post, Elan Kandel, a Member at the Cozen O’Connor law firm, and Neil Lipuma, Senior Vice President, Underwriting Leader—Financial Services of Hiscox USA take a look at the controversies surrounding the SEC’s use of its administrative tribunals and examines the recent court challenges to the agency’s practices.
I would like to thank Elan and Neil for their willingness to publish their guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this blog. Please contact me directly if you would like to submit a guest post. Here is Elan and Neil’s guest post.
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Earlier this month, the American League won this year’s Major League Baseball All-Star Game. The winner of the annual All-Star Game enjoys home-field advantage for the World Series. Some have questioned whether there is actually a correlation between “home-field advantage” and winning the World Series. There is nothing to question – there is a distinct advantage. Since 1985, the team with the home-field advantage has won 23 of 29 World Series.[1]
The home field advantage extends beyond Major League Baseball. The Securities and Exchange Commission (SEC) enjoys a pronounced home-field advantage when trying enforcement actions in its own administrative courts as opposed to federal district courts. According to a recent analysis in The Wall Street Journal, the SEC “[w]on against 90% of defendants before its own judges in contested cases from October 2010 through March of this year.”[2] For fiscal year 2014, U.S. District Court Judge Jed Rakoff remarked that the SEC had won 100% of the actions tried in its administrative courts, while its success rate in federal court for the same period of time was only 61%.[3]
Continue Reading Guest Post: The Importance of Inferiority as a Basis for Leveling the SEC’s Enforcement Action Playing Field
Controversy Surrounds SEC’s New Proposed Dodd-Frank Executive Compensation Clawback Rules
On July 1, 2015, a divided SEC voted 3-2 to propose rules directing the securities exchanges to adopt standards requiring listed companies to adopt policies requiring the companies’ executive officers to pay back incentive-based compensation in the event the company restates its financials for the year in which the compensation was awarded. The proposed rules,
SEC Commissioner Gallagher at the Stanford Law School Directors’ College
The D&O Diary was in Palo Alto, California this week for the annual Directors’ College at the Stanford Law School (depicted to the left). The keynote speaker on Tuesday morning was SEC Commissioner Daniel M. Gallagher, who recently announced that he will be stepping down from the Commission when his successor has been confirmed.
Senator Warren Calls SEC Chair White “Extremely Disappointing”
In an extraordinary 13-page letter dated June 2, 2015 sent to SEC Chair Mary Jo White, Senator Elizabeth Warren blasted White, whose leadership at the SEC the letter describes as “extremely disappointing.” Warren’s letter goes on to say