April 12, 2004

SEC General Counsel Speaks Out

At the end of the ABA’s Business Law Section meeting in Seattle last Saturday, Giovanni Prezioso, the SEC’s General Counsel, gave a speech that should serve as interesting reading.

Among other topics, Giovanni noted that the SEC still is considering adoption of its outstanding “noisy withdrawal” proposal and that he believed that the SEC’s existing rule pre-empts any state laws that are contradictory. Notably, he warned that the SEC is closing watching how lawyers apply the new standards and monitoring how the state bars address the issue of lawyers’ obligations to clients.

SEC “Notices” PCAOB’s Auditing Standard No. 1

The SEC finally has “noticed” the PCAOB’s Auditing Standard No. 1, which deals with what it means to say your audit complied with the PCAOB’s auditing standards versus GAAS. As you might recall, the PCAOB is required to have all of its rules approved by the SEC before they become effective. It is my guess that odds are low to nil that the SEC won’t approve any of the PCAOB’s rules, but the SEC has been slow to move the PCAOB’s rules through this process so far (e.g. we’re still waiting for the SEC to notice the PCAOB’s Standard No. 2 regarding internal controls).

Imbedded in this notice appears to be a posturing – and important – reminder that “we’re bigger than they are” (ie. that your financials must comply with the PCAOB rules but you’d better never forget the preeminent place of the SEC). The SEC also uses the occasion of this notice to announce that it will be coming out with an interpretive release of its own.

Sample Annual Meeting Scripts

Due to popular demand, we have created a new “Annual Stockholders’ Meetings” Practice Area, complete with 2 sample annual meeting scripts in Word files.