September 2, 2015

Proxy Access: Imagine No Holding Periods!

Proxy access is being debated in Canada ahead of a possible proposal (see this memo) – and this excerpt from this article gives a sense of the possible stakes:

Proponents of “proxy access” all agree to these conditions or some variant thereof; but in a policy paper from the Canadian Coalition for Good Governance (CCGG) stands apart and alone in the North American investment world on a most important condition of proxy access: The CCGG would place no holding time requirement whatsoever before shareholders acquire the right to nominate board members.

Meanwhile, Ning Chiu of Davis Polk delves into this working paper from the SEC’s DERA about the trade-offs between universal proxy access through federal regulation and the “private ordering” of proxy access through shareholder proposals…

Promontory Settles With Regulators

Here’s an excerpt from this Reuters article:

In a swift reversal of its earlier determination to sue the New York State Department of Financial Services, the Promontory Financial Group, a leading consultant to the industry, took what some observers say is the kind of advice it typically offers clients when accused of wrongdoing: settle. Rather than risk even greater reputational damage during a lengthy court battle – and some speculate that negative fallout from the decision to fight the case could have been a driving force behind the strategy shift — the prominent Washington, D.C.-based firm climbed down from its confrontational strategy on Tuesday, admitting that its actions fell short of the New York regulator’s standards when it investigated possible sanctions violations by Standard Chartered bank.

In addition, Promontory agreed to pay a $15 million fine and accepted a six-month suspension from new consulting projects that require New York state authorization.

States File First Brief in Regulation A+ Challenge

In this blog, Stinson Leonard Street’s Steve Quinlivan note that Montana and Massachusetts have filed their first brief in their Regulation A+ challenge…

September-October Issue: Deal Lawyers Print Newsletter

This September-October issue of the Deal Lawyers print newsletter has been posted – & also sent to the printers – and includes articles on (try a “Free for Rest of ’15” no risk trial now):

– Retention Payment Program: Decision Tree
– Earn-Out Covenants
– Spin-Offs & Executive Compensation: Keys to Success
– D&O Insurance: Maximizing Returns In the Face of M&A Lawsuits
– Providing Effective, Practical Counsel Regarding Acquisition Surprises

Remember that – as a “thank you” to those that subscribe to both & our Deal Lawyers print newsletter – we are making all issues of the Deal Lawyers print newsletter available online for the first time. There is a big blue tab called “Back Issues” near the top of – 2nd from the end of the row of tabs. This tab leads to all of our issues, including the most recent one.

And a bonus is that even if only one person in your firm is a subscriber to the Deal Lawyers print newsletter, anyone who has access to will be able to gain access to the Deal Lawyers print newsletter. For example, if your firm has a firmwide license to – and only one person subscribes to the print newsletter – everybody in your firm will be able to access the online issues of the print newsletter. That is real value. Here are FAQs about the Deal Lawyers print newsletter including how to access the issues online.

– Broc Romanek

September 1, 2015

Rule 506(c): Updated Stats

Recently, someone posted a query in our “Q&A Forum” wondering if there were any updated states on Rule 506(c) placements (Corp Fin Director Keith Higgins had given some preliminary stats in this speech last year). Here are more recent stats:

Since the exemption became available in September 2013, Form D filing data indicates that as of June 30, 2015:

– Filers checked that they intended to rely on Rule 506(c) in almost 2,900 new offerings, and planned to raise more than $37 billion in new capital and
– Filers checked that they intended to rely on Rule 506(b) in approximately 34,800 new offerings, and planned to raise more than $1.15 trillion in new capital.

More on “SEC Busts Earnings Release Hackers! 150K Releases Stolen Over 5 Years”

My head is still spinning from the revelations noted in my blog last week about how hackers stole over 150,000 earnings releases from the newswires over a period of five years.

Based on activity in our “Q&A Forum” (#8516), it looks like some companies are rethinking their practice of giving their earnings releases to the newswires before they make them publicly available (given the unreliability of how secure the newswires apparently are). These companies would file their earnings releases on a Form 8-K before they hand them over to wires. Of course, these would mean that the wires wouldn’t be the first place to go for news – but they did that damage to themselves. Let me know what you think…

Check out this blog about “Do hiring practices lead to earnings management?”…

Shareholder Proposals: Trinity v. Wal-Mart’s Impact on the “Ordinary Business Exclusion”

In this podcast, Brian Breheny, Ted Yu & Hagen Ganem discuss the Third Circuit’s ruling in Trinity Wall Street v. Wal-Mart and its impact on the interpretation of the “ordinary business exclusion” to the shareholder proposal rule, including:

– What was this case all about?
– Can you give a bit more gloss on the “ordinary business exclusion” to Rule 14a-8?
– How did the Third Circuit’s opinion differ from the SEC’s view?
– What do you think the impact will be of this decision?
– Will Trinity appeal the decision – does it have a shot with the US Supreme Court?

Our September Eminders is Posted!

We have posted the September issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!

– Broc Romanek

August 31, 2015

Pay Ratio: Media Tries to Sleuth Out Ratios Based on 3rd-Party Data

I’m wrapping up a comprehensive “pay ratio” chapter for the 2016 edition of our “Executive Compensation Disclosure Treatise” (order your copy now – 1600 pages!) and came across this article by Quartz. Here’s an excerpt:

Starting in 2018 [Broc’s correction], US companies will have to report the ratio of their CEO’s pay to the average employee’s salary to the Securities and Exchange Commission. But why wait? Salary-data aggregator Glassdoor put together a ranking of pay ratios for companies in the S&P 500 based on the median employee pay data it has and CEO pay data from company filings. At the top: David Zaslav of Discovery Communications with an astounding ratio of 1,951-to-one, followed by the chiefs at Chipotle (1,522), CVS (1,192), and Walmart (1,133).

The biggest takeaway? We have no idea what these ratios really look like. Estimates are wildly inconsistent. And it’s unclear how much better things will be under the new rules since companies will get to choose how they calculate employee pay.

A recent analysis from Payscale, also an online salary aggregator, came out with an entirely different ranking and vastly lower ratios. Larry Merlo of CVS tops its list, but with a ratio of 422-to-one, compared to 1,192 from Glassdoor. Payscale’s highest estimated ratio would only make the 37th spot on Glassdoor’s ranking.

A separate Bloomberg analysis computed average worker pay in a different way, using publicly available data, and came up with a whole other set of estimates and rankings. Bloomberg puts the average salary at JP Morgan at $124,959, compared to $65,344 from Glassdoor. Consequently, Glassdoor’s estimate of the pay ratio is twice as high.

To make it more confusing, Glassdoor isn’t universally higher. Bloomberg has ex-McDonald’s CEO Don Thompson in first place with a pay gap ratio of 644 to one. Glassdoor puts the ratio at 422.

Some caveats are in order for data from sites like Payscale and Glassdoor. Their salary data is self-reported by employees, and not entirely reliable. And as Glassdoor notes, CEO pay varies highly from year to year, due to things like stock options and bonuses. Employees tend to underreport such earnings to Glassdoor, and the distribution of people who report on the site may be skewed in terms of pay or seniority. Some companies have already disputed the average salaries reported by Glassdoor.

Here’s a note that I received from a member in response:

According to this Reuters article, the Glassdoor study (which I couldn’t find anywhere on Glassdoor’s website) used “CEO compensation figures reported by 441 S&P 500 companies through Aug. 14 and user reports about salaries at those companies. Only companies for which Glassdoor had 30 or more worker salary reports were included. The data could be skewed if workers under-counted tips or bonuses, Glassdoor said.” Anyone using Glassdoor or Payscale stats as reliable is irresponsible – but some journalists obviously are (here’s a NY Times example and here’s a new one from

Pay Ratio: Investor & Proxy Advisor Views?

If you want a preview of how proxy advisors & institutional investors perceive the coming pay ratio disclosures, check out this Bloomberg article. Of course, we’ll have representatives from ISS, Glass Lewis, BlackRock, CalSTRS and Capital Research and Management at our upcoming “Proxy Disclosure Conference/Say-on-Pay Workshop” to discuss that and more…

Drafting Effective CD&As

In this podcast, Sharon Podstupka of Pearl Meyer & Partners provides some insight into how to draft more effective CD&As (here’s the related report findings), including:

– What are the benefits of having a non-lawyer involved in drafting the CD&A?
– What are arguments that can “win the day” at companies who have senior management not interested in drafting user-friendly CD&As?
– How does creating more usable disclosure impact the timeframe for drafting proxy disclosure?
– Do you see companies planning in advance for the pay ratio rules? And if so, in what ways?

– Broc Romanek

August 28, 2015

SEC’s Filing Fees: Going Down 13% for Fiscal Year 2016!

Yesterday, the SEC issued this fee advisory that sets the filing fee rates for registration statements for 2016. Right now, the filing fee rate for Securities Act registration statements is $116.20 per million (the same rate applies under Sections 13(e) and 14(g)). Under the SEC’s new order, this rate will dip to $100.70 per million, a 13.3% drop. Nice to see another reduction after last year’s 10% drop (which combined with a drop in the rate two years ago, offsets a hefty price hike from three years ago).

As noted in the SEC’s order, the new fees will go into effect on October 1st like the last four years (as mandated by Dodd-Frank) – which is a departure from years before that when the new rate didn’t become effective until five days after the date of enactment of the SEC’s appropriation for the new year – which often was delayed well beyond the October 1st start of the government’s fiscal year as Congress and the President battled over the government’s budget.

Board Succession Planning Databases

In this podcast, Equilar’s David Chun discusses the latest in Equilar’s line of services – BoardEdge, including:

– What is “BoardEdge”?
– How does it compare to a company hiring a recruiter?
– Any surprises since you launched?

Our “Q&A Forum”: The Big 8500!

In our “Q&A Forum,” we have blown by query #8500 (although the “real” number is much higher since many of the queries have others piggy-backed on them). I know this is patting ourselves on the back, but it’s over 14 years of sharing expert knowledge and is quite a resource. Combined with the Q&A Forums on our other sites, there have been well over 28,000 questions answered.

You are reminded that we welcome your own input into any query you see. And remember there is no need to identify yourself if you are inclined to remain anonymous when you post a reply (or a question). And of course, remember the disclaimer that you need to conduct your own analysis and that any answers don’t contain legal advice.

– Broc Romanek

August 27, 2015

I Doubt Apple’s CEO Violated Reg FD With His “China” Email to Jim Cramer

Yesterday, I ran a popular poll about whether folks thought that Apple’s Tim Cook violated Regulation FD by emailing CNBC host Jim Cramer about how Apple was faring in China. The poll results indicated that 15% thought it was nowhere near a violation – and 21% indicated it might look that way to the untrained eye (but that it wasn’t). 29% thought it was clearly a violation – and 29% thought it was a toss-up and depended on how the SEC approached it (7% didn’t realize that Seinfeld is available around-the-clock on Hulu these days).

In my blog about it, I indicated that the facts as we know them are semi-sparse. Based on the facts as we know them, here’s my 10 cents:

1. I Agree That The Optics Aren’t Good – In a great illustration of “perception matters,” a plain face reading of the email that Cook sent to Cramer makes the securities lawyer in me cringe. The 2nd paragraph is about how Apple is experiencing strong growth in China, etc. Even worse is the start of the 3rd paragraph about “our performance so far this quarter is reassuring.” This all comes after Cook’s intro about how Apple doesn’t give mid-quarter updates. This “perception” is probably why so many in our community think it’s a clear-cut violation.

2. But Communications to Journalists Aren’t Reg FD Violations – To the extent Cook’s email was directed to Cramer as a member of the media (so intention matters) – and reasonably understood that way – there likely isn’t a problem (absent other facts). This is supported by this excerpt from the SEC’s adopting release in 2000:

Rule 100(b)(1) enumerates four categories of persons to whom selective disclosure may not be made absent a specified exclusion. The first three are securities market professionals — (1) broker-dealers and their associated persons, (2) investment advisers, certain institutional investment managers and their associated persons, and (3) investment companies, hedge funds, and affiliated persons. These categories will include sell-side analysts, many buy-side analysts, large institutional investment managers, and other market professionals who may be likely to trade on the basis of selectively disclosed information. The fourth category of person included in Rule 100(b)(1) is any holder of the issuer’s securities, under circumstances in which it is reasonably foreseeable that such person would purchase or sell securities on the basis of the information. Thus, as a whole, Rule 100(b)(1) will cover the types of persons most likely to be the recipients of improper selective disclosure, but should not cover persons who are engaged in ordinary-course business communications with the issuer, or interfere with disclosures to the media or communications to government agencies.[FN]

[FN 27] While it is conceivable that a representative of a customer, supplier, strategic partner, news organization, or government agency could be a security holder of the issuer, it ordinarily would not be foreseeable for the issuer engaged in an ordinary-course business-related communication with that person to expect the person to buy or sell the issuer’s securities on the basis of the communication. Indeed, if such a person were to trade on the basis of material nonpublic information obtained in his or her representative capacity, the person likely would be liable under the misappropriation theory of insider trading.

I’ve always wondered (or worried) about the journalist exception when the journalist is a conduit for the market. It’s possible that FN 27 wasn’t written to address this type of situation. For example, it may have been included to assure company officials that communicating high demand to a supplier in an effort to secure additional supplies would not violate Reg FD – even if the supplier is a “holder’ (which likely should have been written in the regulation as “owner”) of company securities.

And the thing about the press is that it’s not usually a very good way to plan for Reg FD compliance (although the live interview situation is probably not subject to the usual concerns about what the press will actually report – and when they’ll actually report it publicly).

3. Doubtful Directed to Cramer In His Investor Capacity – So far at least, there is no indication that Cook intended his email to be received by an investor. If so, any misuse by Cramer would create problems for Cook. Barring that type of situation, this is merely an exclusive with media. Done all the time.

As I understand it, Cramer is the manager of a charitable trust fund (at least, he’s portrayed that way), as well as the talking head on his own show. But if you ask 100 people what Jim Cramer does, my hunch is that at least 99 will say “media personality” or “news show host” – not “fund manager.”

On the other hand, there certainly is the argument that intent of the communicator is not intended to part of Reg FD – that it’s more mechanical. Instead, Cook might have a strong argument – similar to the “intent” concept – that the email to Cramer was not sent under circumstances that were reasonably foreseeable to Cook that Cramer would purchase or sell securities on the basis of the information contained in the email. More particularly, it seems reasonable that Cook could conclude that MSNBC has a policy, applicable to Cramer, that – to the extent it even allows trading in public securities – material information received by its personnel must be disseminated broadly before the personnel can trade securities of a company that is the subject of the information (or discuss the information in a selective forum, essentially equivalent to a “tip”). Thus, it seems reasonable that Cook could conclude that Cramer – even to the extent he is a manager of a fund that holds Apple stock – would be required to broadcast the material information in the email and allow for appropriate dissemination before using the information for another purpose. Presumably, that would not constitute a violation of Reg FD.

By the way, I have always wondered how MSNBC got comfortable with Cramer trading while running his own show, but that’s another ball of wax. And don’t forget to check out our comprehensive 119-page “Regulation FD Handbook“…

Conflict Minerals: GAO Says Most Companies Unable to Determine Source

On the same day that the SEC’s rules were dealt a blow by the DC Circuit last week (see our memos about that posted in our “Conflict Minerals” Practice Area), the GAO delivered this 60-page report about 2014 disclosures – not 2015! – and concludes that most companies were unable to determine the source of their conflict minerals. (And that conclusion seems unlikely to change in the report on 2015.) Here’s an excerpt from this Cooley blog:

Of those studied, 99% reported performing reasonable country-of-origin inquiries (RCOI) for the conflict minerals they used. The GAO spoke with some of the companies, which reported that they had “difficulty obtaining necessary information from suppliers because of delays and other challenges in communication.” According to the report, the vast majority of companies (94%) also conducted due diligence on the source and chain of custody of the conflict minerals they used, but 67% reported that they were unable to determine the source of the minerals (i.e., whether they came from the covered countries) and, not surprisingly, “none could determine whether the minerals financed or benefited armed groups in those countries.”

The report also indicates that 24% reported that the conflict minerals they used did not originate in covered countries, while 4% reported that they did source from the covered countries, but “indicated that they are or will be taking action to address the risks associated with the use and source of conflict minerals in their supply chains.” Only 2% indicated that their conflict minerals came from scrap or recycled sources.

The report estimates that only 47% of companies reported that they received responses from the suppliers they surveyed, while only 19 companies in the sample had response rates of 100%.

Shareholder Approval: SEC Seeks Comment on NYSE’s “Early Stage Companies” Proposal

As noted in this MoFo blog, the SEC is seeking comment by next Monday for the the NYSE proposal to amend the shareholder approval rules (Sections 312.03(b) and 312.04) to exempt an “Early Stage Company” from having to obtain shareholder approval before issuing shares for cash to related parties (or their affiliates or entities in which they have a substantial interest), so long as the company’s audit committee (or a comparable committee comprised solely of independent directors) reviews and approves of the transactions prior to their completion. An “Early Stage Company” is defined as a company that has not reported revenues greater than $20 million in any two consecutive fiscal years since its incorporation; however, the company will lose that designation (and will not be able to regain it) at any time after listing on the NYSE that it files a Form 10-K with the SEC in which it reports two consecutive fiscal years (including periods prior to listing) in which it has revenues greater than $20 million in each year.

– Broc Romanek

August 26, 2015

Poll: Did Apple’s CEO Violate Reg FD With His “China” Email to Jim Cramer?

A member asked me to run a poll on whether folks thought that Apple CEO Tim Cook’s email to CNBC host & fund manager Jim Cramer about China trends violated Reg FD. The facts as we know them are semi-sparse. This MarketWatch article contains some scant Reg FD analysis – as well as a copy of CEO Cook’s email.

Take a moment to participate in this anonymous poll:

survey service

Corp Fin Updates Financial Reporting Manual: How Delinquent Filers Can “Catch-Up”

Yesterday, Corp Fin posted an updated Financial Reporting Manual to provide guidance about how delinquent filers can make a “catch-up” filing. This guidance seems to reflect the long-standing position taken in Corp Fin’s Office of Chief Counsel about how companies that haven’t filed their ’34 Act reports in a long time can come back into compliance without filing all of their missed reports (since most of those missed reports would provide little value to investors at this point). Read Section 1320.4 of the Manual – but the guidance essentially is that Corp Fin has the discretion to allow a company to catch-up:

– By filing the last due Form 10-K (with “all material information that would have been included in those filings”) and any subsequent 10-Qs due since that last 10-K (the Manual doesn’t mention the 10-Qs but that is the Staff’s position)
– This discretion doesn’t absolve the company of any potential liability it has for being delinquent (nor preclude SEC Enforcement action)
– Catching up this way doesn’t mean that the company is now “current” for S-3/S-8/Rule 144 or Reg S purposes “until it establishes a sufficient history of making timely filings”

Jeff Riedler is retiring next week as Assistant Director of AD1’s Office of Health Care and Insurance.

October Conference Hotel Nearly Sold Out; Yesterday’s “Pay Ratio Workshop” Archive Available!

As it typically does a few months ahead of the event, our conference hotel in San Diego – the Manchester Grand Hyatt – is nearly sold out. We have procured an overflow hotel next door – the San Diego Marriott Marquis – for which you can obtain comparable room rates if you reserve online thru this page. But you’ll want to try the Manchester Grand Hyatt first – obtain a discounted rate there by following these instructions. This hotel relates to our popular conferences – “Proxy Disclosure Conference” & “Say-on-Pay Workshop” – to be held October 27-28th in San Diego and via Live Nationwide Video Webcast.

Those conferences are paired with the audio archives that are up from yesterday’s “Pay Ratio Workshop.” You can register at anytime to gain immediate access to these archives and also gain access to our October pair of conferences. Register Now! Here’s a list of the archived 9 panels for the “Pay Ratio Workshop”:

– “Overview: The Final Rules”
– “Getting Ready for Compliance: Sampling & Other Data Issues”
– “Streamlining Your Compliance Efforts”
– “Board Presentations: What To Tell Boards Now”
– “Disclosure: Handling the Transition Period”
– “Parsing Model Disclosures: US-Only Workforces”
– “Parsing Model Disclosures: Global Workforces”
– “Parsing a Recent Pay Ratio Disclosure”
– “How to Handle PR & Employee Fallout”

– Broc Romanek

August 25, 2015

Today’s “Pay Ratio Workshop” – Includes 22-Pages of Annotated Model Disclosures!

Surprise! We decided to pre-record all of the nine panels for today’s “Pay Ratio Workshop.” So if you’re among the many that have registered, you can access all nine panels right now! When you get to this Conference page, just click on a panel’s name – or the “Audio” link adjacent to a panel. Register now if you haven’t yet!

The Course Materials include 22-pages of annotated model pay ratio disclosures (in Word to facilitate your starting point!) – and 128-pages of detailed analysis of executive pay disclosures made during the 2015 proxy season.

The Course Materials alone are worth the price of admission. But this 4-hour audio-only event is paired with our much lengthier “Proxy Disclosure Conference” & “Say-on-Pay Workshop” that are being held in October. Register Now! Here’s a list of the 9 panels for the “Pay Ratio Workshop” (& the agendas for all three events):

– “Overview: The Final Rules”
– “Getting Ready for Compliance: Sampling & Other Data Issues”
– “Streamlining Your Compliance Efforts”
– “Board Presentations: What To Tell Boards Now”
– “Disclosure: Handling the Transition Period”
– “Parsing Model Disclosures: US-Only Workforces”
– “Parsing Model Disclosures: Global Workforces”
– “Parsing a Recent Pay Ratio Disclosure”
– “How to Handle PR & Employee Fallout”

pay ratio

– Broc Romanek

August 24, 2015

Tomorrow’s “Pay Ratio Workshop” – Includes 22-Pages of Model Pay Ratio Disclosures!

In the wake of the pay ratio rules being adopted, get a handle on what you need to do now during tomorrow’s “Pay Ratio Workshop.” The Course Materials for tomorrow include 22-pages of annotated model pay ratio disclosures (in Word to facilitate your starting point!) – and 128-pages of detailed analysis of executive pay disclosures made during the 2015 proxy season. The Course Materials alone are worth the price of admission.

But there’s more! This 4-hour audio-only event is paired with our much lengthier “Proxy Disclosure Conference” & “Say-on-Pay Workshop” that are being held in October. Register Now! Here’s a list of the 9 panels for the “Pay Ratio Workshop”:

– “Overview: The Final Rules”
– “Getting Ready for Compliance: Sampling & Other Data Issues”
– “Streamlining Your Compliance Efforts”
– “Board Presentations: What To Tell Boards Now”
– “Disclosure: Handling the Transition Period”
– “Parsing Model Disclosures: US-Only Workforces”
– “Parsing Model Disclosures: Global Workforces”
– “Parsing a Recent Pay Ratio Disclosure”
– “How to Handle PR & Employee Fallout”

pay ratio

– Broc Romanek

August 21, 2015

Survey Results: Board Portals

Below are the results from our recent survey on board portals:

1. When it comes to board portals, our company:
– Doesn’t have one and isn’t considering using one in the near future – 3%
– Doesn’t have one but is considering whether to use one – 13%
– Adopted one within the past two years – 16%
– Adopted one more than two years ago – 68%

2. For those with board portals, our company:
– Licensed an off-the-shelf portal – 94%
– Built it in-house – 0%
– Hired a service provider to build a custom portal – 6%

3. For those with off-the-shelf board portals, we have:
– Asked whether our vendor has ever had a security breach – 13%
– Investigated our vendor’s security – 70%
– Plan to investigate our vendor’s security in the near future – 10%
– Not worried about our vendor’s security – 7%

Take a moment to participate in our “Quick Survey on ‘What is a Perk?’” and our “Quick Survey on Annual Meeting Conduct.”

Reminder: Keep Cautionary Language Up-to-Date

Check out this D&O Diary blog (& this Mintz Levin blog and Reuters article) about a recent decision in Harman International Industries Securities Litigation, in which the US Court of Appeals for the DC Circuit held that – despite cautionary language – the “safe harbor” under the PSLRA for forward-looking statements was not applicable for certain statements. The ruling noted that “safe harbor” protection was not available because the cautionary language was misleading in light of historical facts and was not tailored to the specific forward-looking statements the company made. The Court’s decision serves as an important reminder to keep cautionary language up-to-date. Here’s an excerpt:

The PSLRA safe harbor was designed to facilitate dismissal of challenges to forward-looking statements at the pleadings stage, before any discovery. But as Harman shows, even on a motion to dismiss, courts will take a hard look at the cautionary language and dismiss the complaint only if the cautionary language truly is meaningful. That means eschew boilerplate, be specific, don’t misstate historic facts and, above all, update your language as things change.

See also this blog that looks at the risks of disclosure post-PSLRA. Here’s an excerpt:

What role does public disclosure by a defendant firm play in the outcome of securities fraud class actions? In a recent article we study this question and find when a defendant firm discloses more via press releases and conference calls, it is more likely to experience an adverse outcome in litigation. While the possibility of private legal liability likely improves the quality and integrity of disclosure, it may also make firms reluctant to release information to financial markets. These compelling findings should be of interest to companies and legal practitioners as they evaluate corporate disclosure decisions and policies, as well as to legal scholars and lawmakers by improving our understanding of the relation between disclosure and private litigation.

pay ratio

– Broc Romanek