Yesterday, the SEC announced that its Investor Advisory Committee will hold a virtual public meeting next Thursday, December 4th at 10 am ET. The agenda includes three hot topics:
1. Panel discussion on regulatory changes in corporate governance – exploring the evolving corporate governance landscape, including key changes to the shareholder proposal process, the use of mandatory arbitration clauses, investor corporate engagement, and modifications to the proxy voting system. James Andrus is moderating a discussion with Leza Bieber of Freshfields, Brad Goldberg of Cooley, shareholder advocate Jim McRitchie, and Vice Chair of ValueEdge Advisors and prominent corporate governance commentator Nell Minow.
2. Panel discussion on tokenization of equities – discussing the development of tokens representing ownership of an asset, and how tokenization can improve how public equities are currently issued, traded and settled – including market structure issues like settlement and short-selling.
3. Potential recommendation from the Committee on the Disclosure of Artificial Intelligence’s Impact on Issuer Operations – considering a draft recommendation urging the SEC to require companies to disclose how they define artificial intelligence, board oversight mechanisms, and other matters, which came out of the Committee’s March 6, 2025 panel discussion on this topic.
Ready or not, the holidays are upon us. I’m very grateful for all of you, as well as my family, friends and all of the same stuff that you’ll find on gratitude lists around the country. As your intrepid blogger during this holiday week, I am also counting my lucky stars for this Bloomberg article, which quotes Peter Atwater calling the marriage between crypto treasury companies and SPACs a “financial turducken.” I think that term might take off almost as much as the “K-shaped economy” that Peter also defined.
We’ve written about this trend a couple of times already, so I won’t belabor the explanation. As we’ve noted, SPACs have made a bit of a comeback this year – and the article gives the latest stats:
More than 110 SPACs raised $23.3 billion in the first 10 months of 2025, a far cry from the roughly $162 billion pooled across 613 in 2021, but easily outpacing the activity in the last two years combined, according to SPAC Research. The stream of deals has maintained a solid clip, with 59 SPAC mergers inked this year through October.
Of course, the real point of this blog is to share this important turducken history, in case you need something to talk about tomorrow with your friends & family:
The turducken, if you’ve managed to avoid its company thus far, is exactly what it sounds like–a chicken stuffed into a duck stuffed into a turkey, all deboned and layered with various types of stuffing. It looks like a regular turkey, but, when cut, magically reveals its true soul (the duck), as well as its soul’s soul (the chicken). It would fit nicely next to a Midwestern dessert salad, but is also the kind of main course you’d expect from a Thanksgiving feast thrown by the psychedelic machine minds at Google Deep Dream. In short, it is a truly mysterious food, melding the nostalgic with the futuristic, the traditional with the impossible.
The carnivore-baiting chimera has been a gold-plated staple of New Orleans cuisine since 1980, when Chef Paul Prudhomme began serving up a Cajun-inflected version in his restaurant, K-Paul’s Louisiana Kitchen. Prudhomme trademarked the name in 1986, and we’ve been calling it that ever since.
I blogged a few weeks ago about how the Enforcement Division is getting “back to basics” under SEC Chair Paul Atkins (and new Enforcement Division Director, Military Judge Meg Ryan, who was sworn in shortly before the government shutdown). A new report from Cornerstone Research and the NYU Pollack Center for Law & Business puts a finer point on the trend line. Here’s an excerpt from Cornerstone’s press release:
The U.S. Securities and Exchange Commission (SEC) brought 30% fewer enforcement actions against public companies and subsidiaries in FY 2025 than in FY 2024—a decline that coincided with the change in SEC administration.
While a decline aligns with previous years in which there was an SEC administration change, FY 2025 stood out for its composition: outgoing Chair Gary Gensler oversaw 52 actions (93%), while only four were initiated under the new SEC administration—the highest and lowest respective totals for outgoing and incoming chairs during a transition year since at least FY 2013.
Here are a few other takeaways:
– Monetary settlements are 45% lower than FY 2024: Total monetary settlements of $808 million in FY 2025 are the lowest since FY 2012 and the second lowest in SEED. This is also less than half of the FY 2016-FY 2024 average total monetary settlement of $1.9 billion.
– Chair Atkins to Focus on Issuer Reporting and Disclosure: Three of the four actions initiated against public companies and subsidiaries after Chair Gensler’s departure involved Issuer Reporting and Disclosure allegations. This is expected to continue into FY 2026. In his May 2025 remarks, Chair Atkins signaled his administration would “return” to the “core mission that Congress set” for the SEC—prioritizing “protecting investors; furthering capital formation; and safeguarding fair, orderly, and efficient markets.”
– Final Off-Channel Communications Sweep Under Chair Gensler: The SEC initiated nine actions in January 2025 as part of Chair Gensler’s off-channel communications sweep—an area that Chair Atkins indicated interest in addressing in remarks made in October 2025.
– Cooperation and Admissions of Guilt Continued Under Chair Gensler: The SEC noted cooperation by 73% of public company and subsidiary defendants that settled in FY 2025, higher than the FY 2016–FY 2024 average of 65%—reflecting the SEC’s continued emphasis on cooperation under Chair Gensler.
– Record-Low Disgorgement and Prejudgment Interest: The total amount of disgorgement and prejudgment interest ($108 million) was the lowest in any fiscal year in SEED — more than $300 million below the next-lowest total in FY 2012.
– Civil Penalties Continued in Administrative Proceedings: FY 2025 civil penalties for administrative proceedings accounted for the highest percentage of the total monetary settlement for any fiscal year in SEED.
Last week, the Ninth Circuit Court of Appeals granted part of an appeal by the US Chamber of Commerce and other trade organizations, arising out of their challenge to California’s climate disclosure laws. Here’s more detail from PracticalESG.com:
On Tuesday, the Ninth Circuit issued an order temporarily staying California’s SB-261 requiring biennial climate risk reporting by companies “doing business” in the state. Prior to the court’s ruling, companies were to publish their initial SB-261 report by January 1, 2026. This blog from Gunderson Dettmer gives background and explains what happens now:
“The motion was denied for SB-253 (GHG emissions reporting). SB-261 enforcement is now paused while the Ninth Circuit considers whether to reverse the district court’s August decision.
The case is scheduled for oral argument on January 9, 2026 — after the January 1 compliance date — though this date could change or the court could decide on the briefs. During today’s CARB workshop, staff indicated they are reviewing the order, and it remains unclear whether updated SB-261 guidance will be issued.”
The emergency application to the US Supreme Court Zach wrote about Tuesday has been withdrawn, although the industry groups that filed the original application stated they may “renew[] their request for relief if necessary at a later stage of the litigation.”
Members of PracticalESG.com can learn more about California’s climate disclosure laws here.
The case is Chamber of Commerce of the United States of America v. California Air Resources Board. As noted above, the court issued its order at the same time that CARB was holding a public workshop about implementation of the laws. This King & Spalding memo summarizes takeaways from the workshop and says:
It is possible CARB may issue an advisory following the Court’s injunction. In the meantime, while some companies may decide to report on or before January 1, 2026, at least by posting a link on their website, many other companies are likely to wait for further developments from the appellate Court or CARB. Notably, the Ninth Circuit did not stay a second California disclosure law, SB 253, that requires certain companies to disclose Scope 1 and 2 greenhouse gas emissions. Since the Ninth Circuit declined to also stay SB 253, companies should continue to plan for compliance with that law by August 10, 2026 (based on recent guidance from CARB).
We’re continuing to track the ins & outs of these developments – and share practical guidance about what companies should be doing – on PracticalESG.com. If you aren’t already a member of that site, email info@ccrcorp.com, call 800-737-1271, or start your membership online today.
On the heels of the federal antitrust probe that Dave wrote about earlier this month, the Florida Attorney General also has now announced an enforcement action against ISS and Glass Lewis – alleging violation of state consumer protection and antitrust laws. Here’s more detail about the complaint, as summarized by the AG’s announcement:
The lawsuit outlines how ISS and Glass Lewis—who together control almost the entire proxy-advisory industry—assured investors, pension funds, and Florida’s more than one million retirement participants that their recommendations were objective and evidence-based. Instead, the firms allegedly injected controversial environmental, social, and governance (ESG) demands into nearly every voting recommendation they delivered, pressuring companies to adopt race- and gender-based quota policies, ideological climate mandates, and other directives that expose businesses to legal and financial risk. The complaint alleges that the two firms did not simply arrive at these positions independently—they acted in lockstep, standardized their products, and denied consumers any meaningful alternative in a market they dominate.
The lawsuit asserts that Florida’s consumers, businesses, and retirees were misled about the nature and purpose of these recommendations, many of which are untethered from traditional financial analysis. The complaint also alleges that ISS and Glass Lewis made material omissions, pushing corporate actions that could violate federal law while claiming that their guidance supported good governance and regulatory compliance.
The Florida Attorney General had announced an investigation into ISS and Glass Lewis earlier this year, and this litigation adds to the challenges that ISS and Glass Lewis have filed in Texas against a state law that would make it difficult for them to provide “non-financial” recommendations. Earlier this year, the proxy advisors won a court battle against the SEC’s attempt at regulating them on the basis of their recommendations being a “solicitation.” But when it comes to that traditional business model, it currently looks like they might be losing the war.
In this program, you will hear directly from Staff in the SEC’s Division of Corporation Finance about important takeaways from the Statement, the Staff’s procedural expectations for this year, and common questions. There are a few important things to know about this webcast that are different from our typical programming:
1. It’s free for anyone who wants to attend, even if you aren’t currently a member of this site. We want to do what we can to get the word out about the Staff’s approach so that the season is as smooth as possible for everyone (especially given the Staff’s workload after the shutdown).
2. It’s happening from 11:00 am – 12:00 pm Eastern.
3. Since this is a pop-up webcast, we aren’t offering CLE credit for this one. Members of this site can get lots of live and on-demand credits through our other programs, though! As you can see on our home page, we have several good upcoming programs in December – including a program with former high-level Corp Fin Staff on December 11th, which will include practical guidance for companies to navigate this Rule 14a-8 process and other important SEC and Corp Fin initiatives.
As John noted last week – and as reflected in the memos posted in our “Shareholder Proposals” Practice Area – there are a number of open issues to consider when it comes to how this year’s shareholder proposal process will play out. For example, as mentioned in this Cooley memo, companies should remember the possibility of floor proposals. We’ll be continuing to track insights and dynamics as practices develop.
After the Staff issued its November 17th statement on how it would handle the Rule 14a-8 process this year, one of the questions people were asking was, “Will the Rule 14a-8(j) notices be posted on the SEC’s website?” The answer to that question appears to be “yes” – at the very least, for pending no-action requests that had been submitted before the new approach was announced.
On November 17th – which was the same day Corp Fin issued its statement about the Rule 14a-8 process for the 2026 proxy season – a company furnished a supplemental notice about a pending no-action request that it had submitted prior to the statement being issued. The supplemental notice followed the instructions for the new process. The company requested a response from the Staff – so in accordance with the Staff’s statement, the company included an unqualified representation about having a reasonable basis to exclude the proposal at issue. In this case, the company’s position was that the proposal could be excluded on procedural grounds.
On November 19th, Corp Fin posted its response. You can see the company’s supplemental notice on page 18. Corp Fin’s response says in part:
You represent that the Company has a reasonable basis to exclude the Proposal. Based solely on that representation, we will not object if the Company excludes the Proposal from its proxy materials.
Copies of all of the correspondence on which this response is based will be made available on our website.
This is something we’ll know more about soon, but for now it’s reasonable to expect the notices to be posted, even if a company isn’t requesting a response. In addition to submitting the Rule 14a-8(j) notice to the Commission, remember that you also have to send it to the proponent. We’d expect that any no-action requests submitted this season under Rule 14a-8(i)(1) would also be posted in the typical way.
We’ve been talking a lot about Rule 14a-8 shareholder proposals for obvious reasons – but there are also a host of other disclosures to think through for your upcoming proxy statement, which are relevant even if your company doesn’t regularly receive shareholder proposals.
Thankfully, we don’t have to worry about new rule requirements for upcoming proxy statements and Form 10-Ks – no disclosure rules have changed since last year. But as this 31-page Mayer Brown memo observes, shifting SEC priorities and other policy dynamics may affect your disclosures. Compared to this time last year, everything feels different. The memo gives thoughts on how to handle that:
Against the backdrop of heightened macro volatility in 2025, including introduced and threatened tariffs, rapid developments and emerging risks in artificial intelligence (“AI”), and broader political and geopolitical instability, companies should review and recalibrate their approach to disclosures for the upcoming annual report and proxy season with renewed discipline. As we discuss in further detail below, companies should reassess and refine their Form 10‑K disclosures with an emphasis on specificity, materiality, and cross‑document consistency.
In Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), companies should address known trends and uncertainties that are reasonably likely to materially affect liquidity, capital resources, supply chains, pricing, customer demand, or segment performance, making clear the timing, magnitude, and drivers of impacts (e.g., tariff exposure by product or geography, mitigation strategies, and sensitivities). Risk factor drafting should avoid boilerplate and describe company‑specific risks, including tariff‑related trade restrictions and retaliatory measures, regulatory shifts in AI (such as use of generative AI tools and evolving compliance expectations for AI governance), cybersecurity threats, and policy unpredictability affecting environmental, social and governance (“ESG”) matters and diversity, equity and inclusion (“DEI”) initiatives. Companies should also consider whether any of these developments warrants updates to its cautionary language related to forward-looking statements.
Much like in 2025, we expect that a number of high-profile issues will receive attention from investors, companies and other stakeholders during the 2026 proxy season. These issues, including ESG matters and climate-based disclosure, among others, reflect the changing political landscape and highlight the differences between the current SEC administration’s priorities and those of the prior administration.
The memo takes a close look at how these issues (and others) affect various sections in the proxy statement and Form 10-K. It also points out that you should pay extra attention to Item 405 disclosures this year, since the Edgar Next transition may have caused some folks to miss Section 16 deadlines.
Yesterday, the SEC issued a Litigation Release announcing that it had filed a joint stipulation dismissing its high-profile cybersecurity disclosure enforcement action against SolarWinds and its CISO. The enforcement action followed a massive Russian cyberattack against the company and challenged alleged “hypothetical risk factor” disclosures and other statements that purported to describe the company’s cybersecurity practices and policies.
The case was notable for, among other things, the SEC’s unusual decision to bring charges against SolarWinds’ CISO and its argument that the company’s cybersecurity weaknesses represented internal accounting controls failures. The SEC took a big hit last year when a federal judge dismissed all of its claims against the company and its CISO with respect to statements made prior to the attack, and all but one claim relating to post-attack disclosures.
Earlier this year, the SEC and SolarWinds reached a tentative settlement of the case, but yesterday’s announcement apparently takes that off the table. Here’s what the Litigation Release had to say:
The U.S. Securities and Exchange Commission today filed a joint stipulation with Defendants SolarWinds Corporation and its Chief Information Security Officer, Timothy G. Brown, to dismiss, with prejudice, the Commission’s ongoing civil enforcement action. As stated in the joint stipulation, the Commission’s decision to seek dismissal is “in the exercise of its discretion” and “does not necessarily reflect the Commission’s position on any other case.”
The dismissal of the SolarWinds enforcement action coincides with the release of a Cornerstone Research Report finding that SEC enforcement proceedings against public companies declined significantly during the 2025 fiscal year. Check out Kevin LaCroix’s blog on “The D&O Diary” for more information on that report.
A recent Wilson Sonsini memo offers advice for boards and management on best practices for shareholder engagement and dealing with shareholder activism. Here’s an excerpt from the memo’s discussion of how to conduct a meeting with investors:
The company’s representatives should conduct the meeting and drive the discussion. Shareholders want to engage directly with the decisionmakers, so top management or a board member should be the company’s primary speakers. Throughout the meeting, the company will want to show that its participants have a strong command of the issues facing the company.
Although not mandatory, executives generally engage most in discussions related to their functional areas. For example, the CEO would concentrate on questions and discussion related to strategy and “big picture” items, the CFO would focus on financials, and the General Counsel would focus on governance. Throughout the meeting, it is important for the company’s participants to demonstrate competence, alignment, and engagement.
Approach the meeting as a discussion and not a negotiation. This means listening actively and soliciting feedback, and not being dismissive, defensive, or confrontational. It is natural for there to be issues on which the company and the shareholder disagree, but the company’s focus in the meeting should not be on trying to change the shareholder’s mind. Rather, the goal is to clearly and unemotionally communicate the company’s position, reasoning, and value creation strategy while also building credibility with shareholders.
Other engagement-related topics addressed by the memo include when to engage with shareholders, whether to engage with known activists, how to prepare for a meeting with shareholders, what legal issues to keep in mind, and what to do after engagement.
