November 22, 2004

Latest SEC Thinking on Internal Controls

On Saturday, at a panel from the ABA’s Committee of Federal Regulation of Securities’ Fall Meeting, Corp Fin Director Alan Beller stated that the SEC Staff is considering taking action regarding the ability of accelerated filers to comply with the internal controls deadline – and is thinking of whether a category of smaller accelerated filers should be given more time.

Alan expressed the view that to the extent that a company has financials that the company stands behind – but the company cannot complete its 404 report timely to include in the 10-K – he would prefer that the company file the 10-K without the 404 report and auditor’s attestation, so at least there is the 10-K information available to investors (but the 10-K would nonetheless be considered deficient). Alan stated that SEC Staff is considering whether such a company would be deemed deficient in its filing obligations for purposes of Form S-3 eligibility. We should hear relatively shortly from the SEC Staff whether they will take such action.

More PLI Notes

Speaking of internal controls, we have posted notes from PLI’s Securities Law Institute from the internal controls panel as well as the popular Q&A Picnic with Alan Beller.

Reporting Up and Shopping Around for Legal Advice

Our February e-minders described an example of reporting up at TV Azteca (because the company’s Chair didn’t want to disclose one of his related party transactions) – yesterday, Pat McGheehan wrote a column in the NY Times with many more details, illustrating how TV Azteca continued to shop around for the specific legal advice that they desired.

[Personal note– took the kids to SpongeBob Squarepants this weekend; took a pass on “Seed of Chucky.” On the NBA brawl, I agree completely with Michael Wilbon’s column.]