TheCorporateCounsel.net Blog |
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Thursday, August 05, 2004
SEC Adopts Technical Amendments The SEC adopted technical amendments yesterday to the Form 8-K release, originally adopted on March 16, 2004. Among the changes: • the addition of a fourth checkbox to Form 8-K to allow a company to satisfy the disclosure requirements of Rule 13e-4(c), the Regulation M-A provision for issuer tender offers, by including that disclosure in a Form 8-K; • revision of the requirement to disclose the source of funding under Item 2.01 of Form 8-K, Completion of Acquisition or Disposition of Assets, if a material relationship exists between the company and the source of funding (instead of if a material relationship exists between the company and the seller of the assets); • Revision to Item 5.05(c) of Form 8-K, Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics, to provide that a company disclosing an amendment to, or waiver from, its code of ethics on its website must do so within four business days (rather than five); • amendment to Item 5(a) of Form 10-K (disclosure of unregistered sales) to disallow the exclusion of sales made under Reg S; and • re-addition of paragraph (b) of Item 5 of 10-Q/10-QSB that was inadvertently deleted. New “Reg S” Practice Area We have created new practice area for Regulation S. The Practice Area includes FAQs, recent No-Action Letters and a timeline of Reg S. Take a look! -Submitted by Julie Hoffman Wednesday, August 04, 2004
Treasury and IRS Issue New ISO Regs Under new regs issued Monday by the Treasury Department and the IRS, employee-holders of ISOs have the ability to acquire employer stock without realizing income when the option is exercised. The regulations finalize, with minor changes, regulations proposed last summer. Capital gains treatment is permitted if the employee holds the stock for a required period, the exercise price for the ISO is no less than the fair market value of the underlying stock on the date the ISO is granted, and the ISO plan was approved by shareholders. Additionally, the amount of ISOs that can be granted to an employee is limited. The final regulations generally will be effective on the earlier of January 1, 2006 or the first regularly scheduled stockholders meeting occurring at least six months after the publication of the final regulations. New "Lead Director" Practice Area We have created a new “Lead Director” Practice Area, including FAQs on board leadership and examples from companies’ corporate governance principles and proxy statement disclosures. Check it out. -Submitted by Julie Hoffman Tuesday, August 03, 2004
August E-Minders is Up! We have posted the August E-Minders. Check it out! SEC Enforcement Actions Down An article in yesterday's L.A. Times reported that actions brought by the Division of Enforcement are down in the current year (which ends Sept. 30). In the nine months ending June 30, the SEC brought 378 enforcement actions against companies and individuals, compared to 443 enforcement actions in the prior year. Some experts speculate that the decrease is a result of a change in enforcement strategies and an increase in complex cases, rather than a decrease in corporate fraud. There are select areas, however, where SEC enforcement numbers are rising: freezing assets, suspending trades and officer & director bars. Pitt’s (non) FOIAble Records The U.S. District Court for the District of Columbia ruled last week that certain records of former Chairman Harvey Pitt are not required by FOIA to be turned over to the media. The ruling encompasses Pitt’s notes on meetings with Wall Street and accounting executives as well as telephone logs and appointment calendars. Bloomberg had made several requests for information during Pitt’s tenure, but the SEC claimed most of the records were not “agency records” subject to the FOIA. The court also upheld the SEC’s denial of Bloomberg’s request for documents on a November 2001 meeting on conflicts on Wall Street. Bloomberg sought notes taken by the Staff at the meeting with officials from the NYSE, NASD and several brokerage firms. The court agreed with the SEC's denial, saying that regulators would be hampered if participants didn’t feel free to talk openly at such meetings, or if the thoughts and recommendations of the Staff were “exposed” before a final decision on a policy matter. -Posted by Julie Hoffman Monday, August 02, 2004
Accelerated Filing Reprieve? Last week, Jim Quigley, CEO of Deloitte & Touche USA, testified before the House Committee on Financial Services at a hearing on Sarbanes-Oxley. In his testimony, Quigley said it is very challenging for companies to comply with both an accelerated filing schedule and the new internal-controls rules in the same year. Quigley said Deloitte planned to send a letter to the SEC asking the agency to delay implementation. It appears that the SEC may actually be considering a one-year extension for the accelerated filing deadline for Form 10-Ks, according to a July 26th Wall Street Journal article. Under the phase-in as originally established in 2002, for fiscal years ending after December 15, 2004, 10-Ks will be required to be filed within 60 days of the fiscal year end (rather than the 75 days they had this year). In addition, accelerated filer companies are required to file their 10-Qs within 40 days after each quarter end this year - with this deadline dropping to 35 days next year. Our New Survey on Accelerated Filer Deadlines! We have a hunch that meeting a 35-day 10-Q deadline might be even more challenging than a 60-day 10-K deadline. To find out whether this hunch is correct, we have posted a quick survey on the ability of accelerated filers to meet these upcoming deadlines. Please weigh in on this important debate! You also might want to review the final results from our recent survey on disclosure committees. -Submitted by Julie Hoffman |
