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?

The SEC’s Office of the Whistleblower received a record 6,911 whistleblower tips during FY 2020, which ended September 30, 2020. The nearly 7,000 reports represent a nearly 33% increase over the number of tips received during the prior fiscal year, according to the Office’s recently released annual report. The Office also made awards representing a record high annual dollar value and to a record annual number of individual award recipients during the fiscal year.  A copy of the November 16, 2020 report can be found here.
Continue Reading SEC: Record Number of Whistleblower Tips and Awards During FY 2020

As I noted at the time, earlier this month the SEC released its enforcement activity report for the fiscal year ending September 30, 2020. While the report fully detailed the agency’s enforcement activity, the report did not break out statistics reflecting the SEC’s actions against publicly traded companies. A November 18, 2020 report from Cornerstone Research, written in collaboration with the NYU Pollack Center for Law & Business, entitled “SEC Enforcement Activity: Public Companies and Subsidiaries Fiscal Year 2020 Update” (here), takes a detailed look at SEC enforcement activity involving publicly traded companies and their subsidiaries during FY 2020.

As was the case with enforcement activity overall, enforcement activity involving publicly traded companies declined during FY 2020 due to the impact of the coronavirus outbreak, but after a sharp drop in activity during the first half of the fiscal year, enforcement activity rebounded toward the end of the second half. The agency’s $1.6 billion in public company monetary settlements slightly exceeded the equivalent figures for FY 2019. Cornerstone Research’s November 18, 2020 press release about the report can be found here.
Continue Reading SEC Public Company Enforcement Actions Decreased in FY 2020, But Recoveries Increased

Now that the Presidential election has been called for Joe Biden, it is time to start asking what a Biden Presidency may mean, including in particular what SEC enforcement and regulatory activity might look like under a Biden Administration. As discussed below, the likelihood is that we will see a more active SEC enforcement division and a shift back toward a more active regulatory approach.
Continue Reading What Does the Biden Victory Mean for the SEC?

Fines and other recoveries in SEC enforcement action hit record levels during the agency’s fiscal year ended September 30, 2020, even as pandemic-related work closures dampened the number of enforcement actions the agency was able to file, according to the SEC Enforcement Division’s annual report released Monday. The SEC scored a record total of $4.6 billion in recoveries, largely as a result of big fines and disgorgements in a few large matters, while the 405 new standalone enforcement actions the agency filed was the lowest number in six years. The Enforcement Division’s annual report can be found here. The agency’s November 2, 2020 press release about the report can be found here.
Continue Reading Despite COVID-19 Disruptions, SEC Recoveries at Record Levels in FY 2020

It was only this past June when the SEC made what was at the time the largest ever whistleblower award — $50 million – to a single individual. As it has turned out, that record stood for only a short time, as on October 22, 2020, the SEC shattered the prior record, paying out a whopping whistleblower bounty of $114 million to a single individual. The SEC’s award order is heavily redacted to protect the identity of the whistleblower so relatively is known about the circumstances surrounding the award, but even so the sheer size of the award makes a serious statement. The SEC’s October 22, 2020 award order can be found here. The SEC’s October 22, 20202 press release about the award can be found here.
Continue Reading SEC Awards Largest-Ever Whistleblower Bounty of $114 Million

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?

Matt Stock
Jason Zuckerman

In the following guest post, Matt Stock and Jason Zuckerman take a look at five ways that the SEC whistleblower program has affected both corporate compliance and the SEC’s enforcement efforts. Matt and Jason represent whistleblowers worldwide in whistleblower rewards and whistleblower retaliation claims. My thanks to Matt and Jason 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 Matt and Jason’s article.
Continue Reading Guest Post: How the SEC Whistleblower Program Has Changed Corporate Compliance and SEC Enforcement