While the most common type of whistleblower may be a disgruntled employee, others can be whistleblowers, too. And as a recent SEC enforcement action highlights, interfering with these others’ attempts to communicate with the SEC can violate the agency’s whistleblower protection rules. In an amended complaint filed on November 4, 2019 in a pending SEC enforcement action, the agency alleges that the defendant company and one of its principals violated the SEC’s whistleblower rules by requiring the company’s investors to enter agreements in which the investors agreed not to contact the SEC or other regulatory enforcement authorities. The SEC alleges that these actions violated the agency’s whistleblower rules. A copy of the SEC’s November 4, 2019 press release about the amended complaint can be found here.
Continue Reading SEC’s Whistleblower Protections Extend Beyond Just Employees
Guest Post: The SEC Triples Down on its Cryptocurrency Crackdown
In a series of recent actions, the SEC has demonstrated its aggressive approach toward cryptocurrency regulation and enforcement. In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a detailed look at the SEC’s recent actions and considers the actions’ implications. A version of this article originally appeared on Securities Docket. I would like to thank John for his willingness to allow me to publish his article 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 John’s article.
Continue Reading Guest Post: The SEC Triples Down on its Cryptocurrency Crackdown
Massive Facebook Settlements Underscore Privacy’s Importance as Corporate Risk
On July 24, 2019, in a development that underscores the heightened significance of privacy-related issues, the Federal Trade Commission (FTC) announced that Facebook will pay a record-breaking $5 billion penalty and submit to new restrictions and a modified corporate structure. In a related development, the Securities and Exchange Commission (SEC) also announced that Facebook had agreed to a $100 million settlement to resolve the agency’s allegations that the company misled investors regarding the risk of misuse of Facebook user data. Both agency actions followed the March 2018 revelations data analytics firm Cambridge Analytica had obtained access to user data of millions of Facebook users. The FTC’s July 24, 2019 press release about the $5 billion penalty can be found here. The SEC’s July 24, 2019 press release about the $100 million settlement can be found here.
Continue Reading Massive Facebook Settlements Underscore Privacy’s Importance as Corporate Risk
Guest Post: Practical Tips When Responding to SEC Comments
In the following guest post, Jay Knight, a member in the Bass, Berry & Sims law firm, provides some recommendations on what do to when responding to filing comments from the SEC. I would like to thank Jay 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 site’s readers. Please contact me directly if you would like to submit a guest post. Here is Jay’s article.
Continue Reading Guest Post: Practical Tips When Responding to SEC Comments
SEC Public Company Enforcement Activity Remained Near Record Levels in FY2019’s First Half
Driven in significant part by the new actions filed as part of the SEC’s Share Class Selection Disclosure Initiative, the number of SEC enforcement actions against public companies and subsidiaries remained at “near-record levels” in the first half of fiscal year 2018, according to a recent report. The report, published by Cornerstone Research in collaboration with the NYU Pollack Center for Law & Business and entitled “SEC Enforcement Activity: Public Companies and Subsidiaries Midyear FY 2019 Update,” states that the enforcement activity levels in the first half of FY 2019 continued “a resurgence of activity that began in the second half of FY 2018.” The report can be found here. A May 15, 2019 press release describing the report can be found here.
Continue Reading SEC Public Company Enforcement Activity Remained Near Record Levels in FY2019’s First Half
Guest Post: Why the Shutdown Must End
Among the agencies largely closed by the current partial U.S. federal government shutdown is the U.S. Securities and Exchange Commission (SEC). In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a look at what the SEC’s closure means for the processes and responsibilities that constitute the agency’s watch. Stark calls on the country’s political leaders to end the stalemate and re-open the government, including the SEC. Every day the shutdown continues, and the SEC staff remain at home, Stark says, the risks to U.S. markets increase. A version of this article originally appeared on Securities Docket. I would like to thank John for allowing me to publish his article as a guest post. 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 John’s article.
Continue Reading Guest Post: Why the Shutdown Must End
SEC Enforcement Activity Against Public Companies Surges in FY 2018’s Second Half
In November, when the SEC released its annual enforcement activity report, the report showed that during the fiscal year that ended on September 30, 2018 both the volume of the agency’s enforcement activity and the level of financial recoveries increased compared to the prior fiscal year. The agency’s report did not separate out its enforcement activity involving public companies. However, a new report from the NYU Pollack Center for Law & Business and Cornerstone Research breaks out the enforcement numbers for public companies. The new report show that SEC enforcement actions against public companies and subsidiaries “jumped substantially” in the second half of FY 2018, reversing a decline in filings that began in the second half of 2017 and continued through the first half of 2018.
Continue Reading SEC Enforcement Activity Against Public Companies Surges in FY 2018’s Second Half
SEC 2018 FY Enforcement Report Shows Increased Activity, Recoveries
Both the volume of SEC enforcement activity and the level of financial recoveries increased in the fiscal year that ended September 30, 2018, according to the agency’s annual enforcement activity report. The increases came after activity had been down in the prior year, the first year under the current presidential administration. However, the agency’s enforcement chiefs cautioned against placing too much weight on the numbers alone. The report contains some interesting signs of what we might expect in the current fiscal year. The SEC’s enforcement report can be found here. The agency’s November 2, 2018 press release about the report can be found here.
Continue Reading SEC 2018 FY Enforcement Report Shows Increased Activity, Recoveries
Guest Post: The SEC’s Outsider Trading Program: The Silence is Deafening
Most readers are undoubtedly familiar with the concept of “insider trading” – that is, the purchase or sale by company insiders of their personal holdings in company shares based on material non-public information. Readers may be less familiar with “outsider trading,” which is trading in shares of a company on the basis on material non-public information by individuals who do not qualify as insiders. In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a look at the SEC’s track record in this area and calls for the agency to reinforce its efforts to police outsider trading. A version of this article previously appeared on Securities Docket. I would like to thank John for his willingness to allow 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 John’s article.
Continue Reading Guest Post: The SEC’s Outsider Trading Program: The Silence is Deafening
Guest Post: Ten Questions the SEC Will Probably Be Asking Google
Earlier this week, media reports circulated that this past spring Google had exposed the private data of thousands of the Google+ social network users and then opted not to disclose the issue, in part because of concerns that doing so would draw regulatory scrutiny and cause reputational damage. In the wake of these revelations, one question is whether the SEC will look into these circumstances. In the following guest post, John Reed Stark, President of John Reed Stark Consulting and former Chief of the SEC’s Office of Internet Enforcement, takes a look at what he regards as a likely SEC investigation and the questions that the SEC likely will be asking. A version of this article originally appeared on Securities Docket. I would like to thank John for allowing me to publish his article 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 an article. Here is John’s post.
Continue Reading Guest Post: Ten Questions the SEC Will Probably Be Asking Google