April 8, 2011

Shutdown: Corp Fin Will Slow to a Crawl (If Even That)

Yesterday, the SEC issued this statement explaining that in the event of a government shutdown, EDGAR will remain fully functional - but that the SEC's Divisions (including Corp Fin) will be unable to process filings, provide interpretive advice, issue no-action letters or conduct any other normal activities. As a result, new or pending registration statements or applications for exemptive relief will not be processed regardless of the status of any review of those filings.

There will be only an "extremely limited number" of Staffers working during the shutdown - so although the SEC's statement provides an email address and phone number for emergencies, I imagine only true emergencies will be handled by the Staff. Other than these designated essential Staffers, any attempt to work during the shutdown is a firing offense - so there is nothing that a staffer can do for you even out of kindness of their heart. The government is scheduled to shutdown tonight at midnight.

Proxy Access: Judges Question the SEC's Rule

During oral argument yesterday, the three judges for the US Court of Appeals for the DC Circuit pressed the SEC on its assessment of the costs and benefits of its proxy access rule and asked whether the rule would empower labor and public pension funds at the expense of other investors, among other things.

As noted in this Reuters article, the judges frequently interrupted SEC Assistant General Counsel Randy Quinn during his arguments and even extended his time twice to ask more questions - and then Randy ran out of time to present a closing argument. The judges also pressed Randy when he mentioned that the proxy access rule would result in fewer contested elections. As Ted Allen noted in ISS's Blog: "While it can be difficult to predict the outcome of a case based on oral arguments, the judges appeared receptive to the arguments by Eugene Scalia, the lawyer for the business groups, that the SEC inconsistently judged how frequently the rule would be used and how much it might cost." Here are articles from the WSJ and Bloomberg - and this Cooley alert is good too.

Poll: How Many Corp Fin Staffers Will Be Working During the Shutdown?

As noted above, the SEC's statement regarding the shutdown notes that only an "extremely limited number" of Staffers will be working if the shutdown is not avoided. Take a moment to predict how many Corp Fin Staffers that phrase means:


- Broc Romanek