March 20, 2003

The SEC staff is expected

The SEC staff is expected to provide FAQs on Regulation G issues before the March 28th effective date. Here are some conversations we have heard that have taken place with the staff regarding transition issues (although don’t rely on them unless you speak with the staff or the FAQs are issued):

– so long as annual report is mailed before 3/28, providing other copies after 3/28 does not mean the report must comply with Reg G
– if 10-K is filed before 3/28, the fact that its posted and on a website after 3/28 does not mean the 10-K must comply with Reg G (however, if the 10-K is posted after 3/28, it must comply)
– if 10-K filed before 3/28 and annual report is delivered after 3/28 that repeats information from 10-K, the repeated information does not need to comply with Reg G
– shelf registrations filed after 3/28 that incorporate information from a 10-K that does not comply with Reg G would then need to comply with Reg G – this can be done by amending the 10-K or by filing a 8-K or 10-Q that is incorporated by reference and complies with Reg G (note that shelfs filed before 3/28 are not impacted by Reg G)

Yesterday, the SEC took enforcement action against HealthSouth for alleged accounting fraud that included a 2 day trading suspension – that is a fairly stiff sanction by itself for the company and rare for the SEC to impose such a sanction on a large cap company. See

For subscribers, we have posted an interview with Bob Juceam on D&O insurance at