Written by Blake Baron and Gabriel Miranda On December 14, 2022, the Securities and Exchange Commission (“SEC”) announced that they adopted amendments to Rule 10b5-1 under the Securities Exchange Act of 1934 (“Exchange Act”). Rule 10b5-1 was first adopted by the SEC in August 2000, which provided affirmative defenses for corporate insiders and companies to buy and sell company stock pursuant to a 10b5-1 plan, … Continue reading SEC Announces Adoption of Amendments to Rule 10b5-1 Insider Trading Plans and Related Disclosures
Written by Jeremy Mittman and Nimish Patel California’s groundbreaking laws mandating corporate board diversity are under fire as two California courts recently ruled them unconstitutional. The courts struck down two California statutes – SB 826 and AB 979 – which required corporations doing business in the Golden State to have a certain number of sitting directors who were female or who were identified as members … Continue reading Corporate Board Diversity Mandates Under Fire in California
Written by Blake Baron On February 9, 2022, the U.S. Securities and Exchange Commission (SEC) unanimously voted to propose shortening the standard settlement cycle for securities transactions from two days to one. The full proposed rule can be found here and a fact sheet can be found here. According to the fact sheet, the proposal, which aims to reduce risks in the clearance and settlement … Continue reading SEC Proposes Shortening the Securities Transaction Settlement Cycle
Written by Nimish Patel On August 6, 2021 the U.S. Securities and Exchange Commission (SEC) formally approved Nasdaq’s proposed board diversity listing rules. Key Takeaways The new rules will require companies listed on Nasdaq’s U.S. exchange to annually disclose self-identified board demographic data. Most companies will be required to have at least two diverse directors or explain why they do not. There will be a … Continue reading SEC Approves Nasdaq’s New Board Diversity Requirements
Written by Mark Hiraide You are a celebrity or a social media influencer and are asked by a company raising money from investors to post endorsements on Instagram. The company’s White Paper identifies you as a “team member,” and the company refers to you as a member of their advisory board. The company goes on to raise over $12 million from investors, but later goes … Continue reading $12 Million Judgment Against Celebrity Endorser for Role in Cyrptocurrency ICO
Written by John Durrant
As of May 5, 2020, the COVID-19 pandemic has accompanied a precipitous descent in the domestic securities markets, followed by a surprisingly sharp rebound. Such volatility may well give rise to several different types of potential liability against companies and their officers and directors, including:
- Securities fraud claims under the Exchange Act of 1934 (the “Exchange Act”).
- Claims related to offerings of securities under the Securities Act of 1933 (“Securities Act”).
- Claims under the various state securities claims, i.e., the “Blue Sky” laws.
- Derivative suits arising under state law.
Business leaders may well say, “Wait, we didn’t cause COVID-19; we didn’t shut down the economy; how can we be held liable?” Continue reading “Will COVID-19 Cause Securities Litigation?”
Written by Mark T. Hiraide
In response to the ill effects the coronavirus pandemic is having on business, the Securities and Exchange Commission on May 4, 2020 adopted a temporary final rule to make it easier for existing businesses to raise up to $250,000 through Regulation Crowdfunding.
Under the relaxed rules, which are in effect only until August 31, 2020, a business is excused from complying with the Regulation Crowdfunding requirement to have its financial statements reviewed by an independent public accountant. During this limited period, the SEC is requiring only certain information from the business’ Federal income tax returns certified by the principal executive officer. That represents a significant time and financial savings for companies – especially small businesses – that need a quick infusion of capital during rough times caused by the COVID-19 virus. Continue reading “SEC Offers an Elixir for Small Businesses Feeling the Financial Effects of COVID-19”
Written by Ignacio Celis-Aguirre
On March 26, 2020, the Securities and Exchange Commission (the “Commission”) announced that it would be providing additional temporary regulatory relief to market participants in response to the effects of the Coronavirus Disease 2019 (“COVID-19”). This relief addresses: (1) temporary relief from the notarization requirement for Form ID for certain filers who cannot secure a notarization because of COVID-19; (2) extending the filing deadline for specified Regulation A and Regulation Crowdfunding reports and forms from certain companies unable to file timely reports and forms because of COVID-19; and (3) extending the filing deadline for submitting annual update filings (“Form MA-A”) to Form MA for certain municipal advisors affected by COVID-19. Continue reading “Additional SEC Relief is Revealed”
SEC Grants Additional Time For Filings Impacted By COVID-19
Written by Blake Baron
Earlier this month, the U.S. Securities and Exchange Commission (the “SEC”) provided conditional regulatory relief to those public companies impacted by COVID-19 (novel coronavirus) with a 45-day extension to file certain SEC filings that would have been otherwise due between March 1, 2020 and April 30, 2020. The SEC announced today that it was modifying that prior relief to cover certain filings due on or before July 1, 2020. The SEC acknowledged that many companies’ operations continue to be significantly impacted by the ongoing COVID-19 pandemic, which may result in difficulties for those companies to meet their applicable SEC filing deadlines. Continue reading “COVID-19 Causes Coverage”
Written by Blake Baron
On March 25, 2020, the SEC’s Division of Corporation Finance provided disclosure guidance to public companies to assist in the evaluation of a company’s disclosure obligations with respect to the COVID-19 (novel coronavirus) pandemic and related business and market disruptions.
While it may be difficult for companies to assess or predict the exact impact of COVID-19 on individual companies or entire industries, the SEC explained that a company may have obligations to disclose certain risks and effects to the extent material to investment and voting decisions. Such risks and effects include the impact of COVID-19 on the current state of a company’s operations, management expectations regarding its future effects, a company’s response to the evolving pandemic and operational plans to address such uncertainties. The SEC noted that disclosure of these risks and COVID-19-related effects may be necessary or appropriate in various sections of SEC filings, including, but not limited to, management’s discussion and analysis, the business section, risk factors, legal proceedings, disclosure controls and procedures, internal control over financial reporting, and a company’s financial statements. Continue reading “SEC Sets Course on COVID-19 Disclosure”