August 16, 2004

Google to Playboy: They’re Real

This was a headline from – and if you haven’t figured it out by now, I can’t resist throwing in some Seinfeldism whenever I get a chance.

Well, Google continues to give plenty of securities law fodder to the business media – this time, a violation of the quiet period that has led to Amendment No. 7 to Form S-1 that includes an interview of the two Google founders with Playboy magazine as Appendix B, complete with three corrections to statements they made in the interview (the interview was conducted in April, just before the S-1 was originally filed).

The three corrections are made in a new risk factor on page 22 that notes that the interview may constitute a Section 5 violation – but the three corrections are not noted or cross-referenced in Appendix B itself. However, in my opinion, none of the corrections relate to matters that are investment deal-breakers since they don’t deal with financial performance (they relate to amount of storage in Gmail; number of employees at Google; and how often searches are made daily with Google’s search engine).

According to media reports, the SEC Staff required Google to include the entire interview in the prospectus – which at least one account labeled as unprecedented. The practice in the past is that the Staff would force the issuer to include only the statements that realistically could impact investment decisions. But in this case, perhaps Google was faced with the prospect of a delay in the offering and the easiest solution was to include the entire interview rather than do a prolonged negotiation with the SEC Staff as to what statements should be included.

As the Wall Street Journal notes today, if Google had gone public in a year or so, the ’33 Act reform that Corp Fin is working on these days might have made the Playboy interview a non-issue.

NYSE Regulatory Reorganization

As part of a NYSE regulatory reorg, the Listed Company Compliance division – including Corporate Compliance headed by Janice O’Neill and Financial Compliance headed by Glenn Tyranski – has been structured so that it reports to Rick Ketchum, who is Chief Regulatory Officer. As a result, now all regulatory, governance and compliance units are aligned under the leadership of Rick Ketchum and separate from the NYSE’s business divisions.

SERP Design and Value/Cost Considerations

Dozens of additional practice pointers have been added to in the past two weeks as our task force continues to churn them out – including one by Bill Gerek of the Hay Group on SERP Design and Value/Cost Considerations. Register now for the October 20th executive compensation conference and gain access to all the pointers on as a bonus!