December 17, 2003

NYSE Issues FAQs on Shareholder

Yesterday, the NYSE sent notices to listed companies advising them of a list of FAQs regarding the shareholder approval of equity compensation rules. These FAQs have been long awaited – as borne out by the many issues raised in a November NASPP webcast.

The NYSE also stated it will be issuing a set of FAQs on the new governance listing standards in the near future. Nice of them to provide their interpretations for free (as opposed to Nasdaq).

PCAOB Proposes Oversight of Non-US Auditors

Last week, the PCAOB proposed rules relating to its oversight of non-US auditors. As I have mentioned a number of times, this is a highly controversial proposal because the PCAOB is essentially claiming global jurisdiction through this rulemaking – the first such claim for a regulator that I am aware of.

As part of this proposal, the PCAOB has decided to extend the registration deadline for non-U.S. audit firms by 90 days – now, the deadline is July 19, 2004.

Momentum of SEC Enforcement Grows

As reflected most recently by Director Stephen Cutler’s remarks at the AICPA conference last week (he noted the SEC was about to announce actions against 11 auditors), the momentum of the SEC’s Division of Enforcement continues. Here are some Enforcement statistics noted by Bruce Carton in his blog recently (as relayed by Linda Chatman Thomsen, Deputy Director of Enforcement, at an early December ABA meeting):

– In FY 2003, the SEC brought 679 enforcement actions (as compared to 598 cases in FY 2002 and 484 cases in FY 2001).
– 199 cases were in the financial fraud and issuer-reporting area. She observed that the percentage of issuer-reporting cases has been going up steadily over the last five years or so and that such cases first exceeded 100 in number in 2000.
– 109 cases were in the offering-fraud area, down from 119 in FY 2002.
– 137 cases were in the broker-dealer litigation area, up from 82 in FY 2002.
– 50 insider trading cases, down from 59 in FY 2002.
– 63 cases involved investment advisers.
– many more officer and director bars last year than in the past.

For members, we have an interview with Ken Winer of Foley & Lardner in which Ken discusses “SEC Enforcement and You.”