Monthly Archives: August 2009

August 17, 2009

Corp Fin Updates a Hodgepodge of C&DIs

On Friday, Corp Fin posted a number of new or revised C&DIs across a number of topic areas, including Securities Act Sections, Rules and Forms, Regulation S-K, Exchange Act Sections and Section 16. A summary of interpretations that are new or revised is provided on the “What’s New” page posted last Friday, and now each interpretation indicates “NEW” or “REVISED” along with the date in the bracketed notation at the end. For the purposes of determining the changes made in the revised C&DIs (as well as the C&DIs that have been withdrawn), you can review the “Outdated or Superceded Compliance and Disclosure Interpretations” page included in the “Archives” section.

A few of the notable Securities Act interpretations are as follows:

On the executive compensation disclosure front, the Staff provides guidance in Regulation S-K Question 117.03 on the reporting of compensation that as been recovered under a clawback policy, as well as reporting in the Non-Qualified Deferred Compensation Table of vested equity awards that provide for deferral of the receipt of such awards (see Regulation S-K Question 125.05).

Look for more discussion and analysis of the latest Compliance and Disclosure Interpretations in the upcoming issue of The Corporate Counsel.

The New Regulation FD C&DIs

The Staff has also made some more progress migrating the old Telephone Interpretations over to the Compliance and Disclosure Intepretation format, posting Regulation FD C&DIs for the first time on Friday. For the most part, these interpretations are the same as the Regulation FD interpretations from the Fourth Supplement to the Manual of Publicly Available Telephone Interpretations. Here is how the new C&DIs relate to the old telephone interpretations:

In updating the Regulation FD guidance, the Staff did not reissue Interpretation 17, which had reiterated the SEC’s position that it did not intend, with the adoption of Regulation FD, to change the practice of using a press release to disseminate earnings information in advance of a conference call or webcast. It would seem that the interpretation is no longer necessary, given that the earnings release model has continued largely unchanged for almost a decade following adoption of Regulation FD.

SEC Approves PCAOB Rules Requiring Registered Firm Reporting

On Friday, the PCAOB announced that the SEC had approved the Board’s rules governing the reporting regime that will be applicable to registered accounting firms. These rules implement Section 102(d) of the Sarbanes-Oxley Act, which required each registered public accounting firm to submit an annual report to the PCAOB, along with more current information as may be deemed necessary. The changes also included rules governing succession to the registration status of a firm. The rules will take effect on October 12, 2009.

– Dave Lynn

August 14, 2009

Study: The Voting Trends of ETFs

Recently, the Investor Responsibility Research Center Institute and PROXY Governance teamed up to conduct this study about the voting policies and voting records of seven of the largest exchange-traded fund sponsors, which account for around 94% of the $500 billion ETF market. Given this large amount, ETFs can have a significant influence over corporate matters.

The study essentially found that practices were all over the map, for both the level of detail of each ETF’s voting guidelines as well as their voting philosophies and patterns. Some funds were much more likely to vote with management compared to other funds (90% of the time vs. 23%); and those funds that were less likely to vote with management relied more heavily on a proxy advisory firm for voting advice. I guess the diversity in voting practice is not too surprising, given that this is a relatively young investment product in a rapidly expanding market.

If you buy an ETF, does the ETF has the right to vote at all of the underlying companies owned by that ETF? The answer can be a little complicated in that the “ETF” term has become bastardized such that it encompasses several categories of investment structures, some of which technically aren’t ETFs. But according to the SEC’s “Q&As,” ETFs are investment companies – and therefore, the voting rights are held by the fund managers, not the fund shareholders. ETFs are not mutual funds (and cannot call themselves mutual funds).

Finally Dismissed: Oracle’s Long-Standing Insider Trading Suit

In June, a US District Court Judge dismissed an 8-year old shareholder lawsuit accusing Oracle CEO Larry Ellison of insider trading and misleading investors. The case – Nursing Home Pension Fund v. Oracle – stems from back in early ’01, when Oracle’s shares dropped 21% after the company announced that it would miss its quarterly earnings forecasts. The suit alleged that Ellison sold $900 million of Oracle stock before the announcement, knowing that there were problems with one of Oracle’s products. The company claimed Ellison sold stock to exercise options that were going to expire and had to be sold during open trading windows.

This is the same case that was dismissed in ’03 by the District Court, a decision that was reversed on appeal in ’04. Ellison donated $100 million to charities and paid $22 million to resolve a separate insider trading suit in ’05. That settlement followed the dismissal of a similar suit in Delaware against Ellison. For more on the case and its long history, see this Bloomberg article.

IFRS Study: More Trouble Than Its Worth?

The debate over IFRS continues to rage. A recent study finds that the US doesn’t have much to gain from adopting International Financial Reporting Standards. The study examines the economic consequences of mandatory IFRS reporting around the world and finds that, on average, there are several benefits to adopting IFRS, including increased market liquidity, decreased cost of capital and increased equity valuations. However, in countries like the US, where there is already a high-quality accounting infrastructure in place, there may be minimal room for improvement.

Additionally, while some argue that adopting IFRS in the US would make it easier for investors to compare compaies with those in other countries and decrease the cost of reconciliations, the study discovered “weak” evidence of any comparability benefits. You can follow the debate over IFRS in our “IFRS” Practice Area, including this Watson Wyatt article that examines a number of comment letters.

– Broc Romanek

August 13, 2009

More Insider Trading Developments: Is a Fiduciary Duty Necessary?

Following on the heels of another insider trading case asking important questions – SEC v. Cuban – the SEC recently prevailed in another insider-trading case: SEC v. Dorozhko. In its decision, the Second Circuit held that hacking into a secure server and trading on the basis of information obtained constitutes a “deceptive device” under Section 10(b) – even though the guy didn’t owe a fiduciary duty to the company. Read some analysis in Tom Gorman’s “SEC Actions” Blog – and note we’ve been posting memos relating to this case in our “Insider Trading” Practice Area.

In this podcast, Bill Kelly and Billy Fenrich of Davis Polk discuss the Dorozhko ruling, including:

– How does the decision differ from SEC v. Cuban?
– What are the implications of these two opinions?

Court Upholds SEC’s Bar of an Accountant for “Unreasonable Conduct”

A few weeks ago , the DC Circuit Court of Appeals upheld a Rule 102(e) decision of the SEC – in Dearlove v. SEC – to bar an accountant from practicing before the SEC for conduct that was merely “unreasonable.” The Court affirmed the SEC’s ’06 order that had barred the Deloitte engagement partner on the audit of Adelphia Communications.

The Court held that Rule 102(e) did not require the SEC to employ a common law negligence standard since generally accepted accounting standards was the standard without requiring the SEC to elicit expert testimony on the reasonableness of petitioner’s conduct.

The Challenge to PCAOB’s Constitutionality

In this podcast, Merritt Cole of White and Williams discusses the case that the Supreme Court recently agreed to hear challenging the constitutionality of the creation of the PCAOB, including:

– What’s the history of this case?
– What are the issues before the Supreme Court?
– If the Supreme Court deems the PCAOB’s creation unconstitutional, what happens to it?
– Are there any other consequences if the Supreme Court holds the PCAOB unconstitutional?

– Broc Romanek

August 12, 2009

Getting the Vote In: Rising Use of Automated Advocacy Calls

Recently, the mass media has been noticing the rising use of automated advocacy calls that companies sometimes use to help bring in the vote (recall the rising use of these calls for political elections over the past decade). For example, see this Forbes’ article. This negative attention illustrates the tightrope that companies – and their proxy solicitors – will walk next year when broker votes disappear and the need for these calls increases by a factor of five.

To learn more about automated advocacy calls, I caught up with Tom Ball of Morrow & Co. in this podcast so he could tell us about the latest trends using these voicemails, including asking him:

– What are these automated advocacy calls? How common are they?
– How are the calls best used?
– How much do they cost?
– Who gets hired to do the “voiceovers” for the calls?

I also posted some samples of these voicemails in case you have never heard one: here is one sample voicemail – and here’s another sample).

Survey Results: Audit Committee Oversight and Subsidiaries

Probably due to the narrowness of the topic, our recent survey on “Audit Committee Oversight and Subsidiaries” didn’t have too many respondents. However, there were some interesting results.

Many companies have adopted stock ownership guidelines requiring executives and directors to own stock in their company based on a multiple of their salaries or board retainers. With the current market downturn and drop in net worth for many people, some companies are changing their stock ownership guidelines. Here is our latest “Quick Survey on Stock Ownership Guidelines” to gauge what folks are doing. Please take a moment to respond to this anonymous survey.

Alternative Fee Arrangements for Deals: Little Less Talk and Lot More Action?

We have posted the transcript from our recent webcast: “Alternative Fee Arrangements for Deals: Little Less Talk and Lot More Action?”

– Broc Romanek

August 11, 2009

Just Mailed: July-August Issue of The Corporate Counsel

We recently mailed the July-August issue of The Corporate Counsel. This issue includes pieces on:

– NSMIA’s Rule 506 Pre-Emption Follow-Up–Risdall Reversal
– The Requirement to Include Late 8-K Information in Form 10-Q/K
– 8-K Item 5.02–When Does the Reference Year Change for Determining the High-Paid NEOs?
– S-K Item 401– Identifying Executive Officers in the 10-K/Proxy Statement
– Exhibit Filing Items
– The Staff’s Longstanding Prohibition on Selling Shareholder Registration of Shares Prior to Issuance– Universal vs. Automatic Shelf Registration
– Federal Legislative Response to Boards Declining Tendered Resignations of Losing Nominees–Pre-Empt State-Law Holding Over?
– SEC’s “IDEA”– Not a Great Idea
– Ramifications of the New SEC and Treasury Proposals

Act Now: Get this issue on a complimentary basis when you try a “Rest of ’09” for free when you try a 2010 no-risk trial today.

Nasdaq Speaks ’09: Latest Developments and Interpretations

We have posted the transcript for our recent webcast: “Nasdaq Speaks ’09: Latest Developments and Interpretations.”

Sponsor An Executive: Hijinks

If you need a laugh, check out this Canadian commercial – a spoof on executives losing money in the market…

– Broc Romanek

August 10, 2009

Complimentary Copy: Summer Issue of Compensation Standards Print Newsletter

We just dropped the Summer 2009 issue of the Compensation Standards print newsletter in the mail to members of (members of that site get the print newsletter as a bonus).

Complimentary Copy: Since the issue provides timely analysis of all the regulatory reforms that have recently taken place, we have posted a complimentary copy of the Summer 2009 Issue so that you can get up-to-speed on the radical changes taking place in the executive pay area.

Free for Rest of ’09: Since we know that times are still tough for many, we offer you the ability to be a member of for free for the rest of this year when you try a 2010 no-risk trial. With all the change going on in the executive compensation area, you can’t afford to be without the critical resources on that site (and the Compensation Standards print newsletter, which you get as a bonus for being a member of

More on “Will Facebook Sidestep Google’s Pre-IPO Problems?”

Recently, I blogged about my concern that Facebook might confront the same Section 12(g) issues that plagued Google – forgetting to register at the 500 shareholder/$10 million assets threshold.

I didn’t do enough homework as it turns out that the Facebook did indeed seek relief by filing a Section 12(h) application with the SEC back in 2008. And the SEC granted the relief, providing a limited exemption for certain employee equity grants (this Red Herring article provides a summary explanation).

These 12(h) applications are pretty rare – but I should know better as I was the guy who processed them for a spell back when I was in Corp Fin’s Office of Chief Counsel many moons ago…

A Word of Caution: Take with a Grain of Salt

A member recently sent us this issue of “SEC Today,” which had to issue a correction to a prior issue because someone mistook a technical correcting release from the SEC for something substantive. I am not poking fun at them as mistakes do happen – just look at my mea culpa above.

The reason for me to note this is to remind you to correct us if you see mistakes in this blog (or elsewhere on our sites). It does happen and we will go back and make the fix as soon as we are notified. It ain’t easy being a “journalist”; it can be nervewracking posting these blogs everyday without the layers of review that the mainstream media enjoys. Any and all feedback is appreciated and always kept to ourselves unless we receive permission to use it otherwise.

– Broc Romanek

August 7, 2009

The SEC’s “Holy Cow” Moment: Judge May Overturn BofA’s Settlement over Merrill Lynch Bonuses

As I head out for a two-week email-free vacation (got some blogs tee’d up for next week and Dave will be manning the ship), I have to admit surprise by Judge Jed Rakoff’s decision to not approve this week’s settlement between the SEC and Bank of America over allegations of misleading proxy materials because the bonus obligations due to Merrill Lynch employees were not fully disclosed.

BofA had agreed to pay a $33 million fine, which I suggested recently was on the high side for a non-scienter violation. Personally, I thought the SEC was trying a new approach and acting fast – as bringing charges against individuals will take considerably longer. Take my poll below to express what you think.

According to this Reuters article, the Judge’s order states: “Despite the public importance of this case, the proposed consent judgment would leave uncertain the truth of the very serious allegations made in the complaint.” The order is linked from this “WSJ Law Blog.” Judge Rakoff will hold a hearing on the case on Monday in his US District Court, Southern District of New York.

FINRA Proposes New Fixed Priced Offering Rule

On Tuesday, FINRA proposed new Rule 5141 “Sale of Securities in a Fixed Price Offering,” which would eliminate NASD Rules 2730, 2740 and 2750. Under the proposal, the definition of “fixed price offering” would build on the existing definition with minor changes and would continue to make clear that an offering can have more than one stated fixed price (e.g., volume discounts and sales net of commissions to the issuer’s employees).The comment period expires on September 18th.

Proposed Rule 5141 would:

1. Incorporate the standards of Rule 2740 by prohibiting a broker-dealer that participates in a fixed price offering selling syndicate from offering securities to any person that is not a member of such selling syndicate at a price below the stated public offering price (known as the “reduced price”), with an exception to permit sales to a person to which the broker has or will provide research (provided that the purchaser pays the stated public offering price and the research falls within Section 28(e)3)(A) of the ’34 Act;

2. Incorporate the standards of Rule 2730 by defining a “reduced price” to include any purchase of – or arrangement to – purchase securities from a person at more than the fair market price in exchange for securities in the offering; and

3. Modify the prohibition in Rule 2750 on sales to “related persons,” by permitting a member of the selling syndicate to sell securities to an affiliate, subject to compliance with FINRA Rule 5130 (ie. IPOs) and that any other transactions between the broker and the affiliate unrelated to the sale or purchase of securities in a fixed price offering are part of the normal and ordinary course of business (i.e., thereby avoiding the recapture of the selling concession through the affiliate as intended to be prevented by the existing rule).

On Wednesday, FINRA withdrew its ’04 proposal that would have clarified the application of then-Rule 2710 to shelf offerings. Note that the ‘04 proposal remains useful as a resource regarding the standards for the current Form S-3/F-3 shelf offering exemptions and the views of the FINRA Staff on the calculation of underwriting compensation for such offerings.

FINRA Officially Creates the “Limited Representative – Investment Banking”

Back in April, I blogged about the SEC approving FINRA’s rule change that creates a new limited representative category – Limited Representative-Investment Banking – for persons whose activities are limited to investment banking, including those who work on the equity and debt capital markets and syndicate desks. On Wednesday, FINRA issued this regulatory notice creating the mandatory registration regime – effective November 2nd – and the SEC issued this order.

Poll: The SEC and Bank of America Settlement

Take a moment to participate in this anonymous poll:

Online Surveys & Market Research

– Broc Romanek

August 6, 2009

Treasury’s Mark Iwry to Speak

We’re very excited to announce our speakers for the “6th Annual Executive Compensation Conference” that will be held at the San Francisco Hilton and via Live Nationwide Video Webcast on November 10th.

The All-Star cast includes:

– Treasury’s Mark Iwry, Senior Advisor to Secretary Geithner
– RiskMetrics’ Pat McGurn and Martha Carter
– NY Times’ columnist Joe Nocera
– Noted counsel John Olson and Marc Trevino
– Renowned consultants Fred Cook, Ira Kay, Mike Kesner, Doug Friske, James Kim and Don Delves
– Panel of respected Directors
– Investor advocates Ed Durkin, Meredith Miller and Paul Hodgson

Now that Congress is moving on say-on-pay (and other compensation-changing initiatives), you need to register now to attend our popular conferences and get prepared for a wild proxy season. Remember that the “6th Annual Executive Compensation Conference” is paired with the “4th Annual Proxy Disclosure Conference” (held on 11/9) – so you automatically get to attend both Conferences for the price of one. Here is the agenda for both Conferences.

Act Now: Register now to attend live in San Francisco or by video webcast. If you can’t make these dates, note that both Conferences will be available through a video archive.

SEC Enforcement Staff Gains Authority to Issue Subpoenas Without Commission Blessing

As noted by this Reuters article, SEC Enforcement Director Rob Khuzami delivered a speech yesterday about his first 100 days in the job (the text of the speech is not yet available). Rob said that the SEC plans to issue more subpoenas and give people more incentives to cooperate with investigations. Based on the article, here are the speech’s highlights (most of which SEC Chair Schapiro had already announced):

– Yesterday, the SEC adopted final rules that provide the Enforcement Staff with the power to issue subpoenas by getting approval only from supervisors, not the full Commission – this will make it much faster and easier to get formal orders. Rob said that the increased subpoena power may induce companies to be more aggressive in addressing wrongdoing to avoid “the necessity” of a subpoena. Some companies do not disclose SEC probes before subpoenas are actually issued.

– The SEC has plans to seek authority to submit more immunity requests to the Justice Department to encourage people to testify without fear of criminal prosecution.

– The SEC plans to create new groups to investigate cases involving asset management, foreign corrupt practices, market abuses, municipal securities and public pensions and structured products. One group already exists to investigate subprime mortgage abuses. Management will be streamlined.

– The SEC plans to create a new office to monitor incoming tips and complaints and hire its first chief operating officer to boost efficiency and speed the reimbursement of funds to harmed investors.

– The Enforcement Staff will need Rob’s permission for “tolling agreements” that give them more time to conduct investigations. He said these have become too common, causing delays that reduce the SEC’s accountability.

Another Sign of the Times: Birth of the “Investors Working Group”

Recently, it was announced that over 50 investor groups had joined to form the “Investors Working Group,” a group co-sponsored by the Council of Institutional Investors and the CFA Institute Centre for Financial Market Integrity. The group aims to lobby Washington over how to deal with the financial crisis and the co-chairs are two former SEC Chairs, Arthur Levitt and William Donaldson. Here is the related press release – and here is their initial report recommending a host of regulatory reforms.

This comes on top of the SEC’s new “Investor Advisory Committee” and new attempts to join investors together through social media

– Broc Romanek

August 5, 2009

Dissecting the SEC’s Enforcement Numbers – and Its Fines

With the SEC bringing this accounting fraud case against General Electric yesterday – costing the company a fine of $50 million – it’s clear that the SEC’s new aggressive approach to Enforcement is in full-gear with a trio of high-profile cases during the past two weeks (note that it’s likely that some – if not all – of these cases were commenced under the prior SEC Chair’s watch).

This case follows the Bank of America settlement, which cost that company a fine of $33 million. Some have complained that $33 million was too small an amount. I had the opposite reaction, that’s a large amount for a mere one-time disclosure violation allegation. Bear in mind that yes, Rule 14a-9 is an anti-fraud rule – but it’s a “non-scienter” fraud provision, so there is no requirement for intent or knowledge of wrongdoing. As a result, penalties often are pretty small – in fact, I recall that many cases are often settled with a C&D order and no fine at all (eg. GE’s “disclosure of perks” settlement with the SEC in ’04). Note the third in the trio is the CSK Auto clawback action.

These cases follow SEC Chair Schapiro’s comments back in April about overhauling the approach that the SEC’s Enforcement Division will take when considering which cases to pursue. We have posted memos regarding the SEC’s new settlement policy, etc. in our “SEC Enforcement” Practice Area.

As is true often in life, sometimes quantity is confused for quality – and the consequences can be disastrous. In Enforcement’s case, the Division’s former goal seems to have been a high number of cases brought (undoubtably to impress Congress, whose focus likely would be on numbers come funding time) – so low-hanging fruit often was pursued at the cost of not tackling some important cases (eg. Madoff). It sounds like that will now change.

I personally haven’t done the math for Enforcement’s reported caseload over the years – but a member recently sent me these thoughts:

I am very skeptical of the Enforcement numbers. Specifically, the SEC’s delinquent filing list recently constitutes a couple hundred each year. The delinquent filing list had 220 for fiscal ’08.

Enforcement claimed 671 completed actions in fiscal 2008. How many delinquent filing cases are included in this total? The entire group of 220? In comparison, the SEC listed only 11 delinquent filer cases in fiscal ’03. If the improvement in Enforcement’s number of cases over the past five year is due solely to delinquent filers, I think this fact pattern in problematic given that delinquent filings really isn’t fraud and simply requires the Staff to send out letters asking the company when they intend to become current.

This thought is not far from what Judith Burns of Dow Jones wrote in an article last Fall. Here is an excerpt from that article:

The Securities and Exchange Commission’s enforcement division brought a near record level of cases in the just-ended 2008 fiscal year, results that critics say are padded with relatively easy actions against companies that are late in filing quarterly or annual reports.

SEC Chairman Christopher Cox heralded the results Wednesday, calling fiscal 2008 the enforcement division’s second-best on record. That would put the total between the 656 enforcement cases brought in fiscal 2007 and the record 679 actions in fiscal 2003, the agency’s high-water mark. The SEC is expected to issue official figures within weeks.

Critics say the results are inflated by a record number of so-called 12(j) actions to deregister shares in companies that lack current financial reports. The SEC brought about 50 such cases in fiscal 2006, a level that appears to have doubled in fiscal 2008, which ended Sept. 30, accounting for roughly 15% of all cases.

Individuals familiar with the matter, who agreed to speak anonymously, said that in early 2008 the SEC’s enforcement division was on track to bring an abysmally low number of cases for the year. One reason for the declining output was a rush to issue cases at the end of fiscal 2007, leaving little in the pipeline for fiscal 2008, according to these individuals.

Delays in getting cases before by the five-member commission also are a factor, these individuals say. Critics say new internal controls and paperwork requirements are throwing sand in the enforcement division’s gears, reducing the amount of time that SEC cops have to spend on legwork.

Deregistration actions provided easy filler, allowing the SEC to paint a picture of an aggressive enforcement staff, according to critics. Some decry the practice, saying the cases need to be brought, but should not be counted toward overall output. Others worry that the SEC is using accounting tricks, sending the wrong message to corporate America: do as I say, not as I do.

More on “Early Problems for XBRL? A Mismatch with FASB’s GAAP Codification”

Recently, I blogged about the SEC’s mandatory XBRL deadline and the mismatch caused by the FASB’s new codification of accounting standards that was launched on July 1st (which becomes effective on September 15th) since all of the mandated XBRL standards are tied to the FASB’s now-superseded standards.

Yesterday, an extension taxonomy was jointly released by the FASB and XBRL US that is intended to bridge the GAAP between the old references and the codification. It’s a start, but Neal Hannon notes that the new codification references will not be accepted by the SEC’s EDGAR. So the mismatch problem still remains.

Neal points out another disconnect:The new extension taxonomy provides pointers only to the public sections in the Codification. In other words, if you are in an XBRL tool – which nearly all folks will be when working with XBRL – and want to see the authoritative literature, the hyperlink takes you out of your XBRL software and asks you to log into the FASB Codification to see the results. This is a major pain – but should eventually be rectified in the SEC’s next release of the taxonomy, slated for sometime early next year. In the meantime, those looking to discover a direct link from XBRL elements to the underlying authoritative literature will have to do a bit of discovery work on their own…

More on “The Mentor Blog”

We continue to post new items daily on our new blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Some Thoughts on Board Leadership Disclosure
– Rights Offerings: How Does the “European” Model Stack Up?
– Very Candid Disclosure: From the Company that Brought You “Dead Frogs”
– Carbon Emission and Cap Disclosures: Likely to Come Soon
– Managing Your Law Department: Top Ten Thoughts
– List of Online Job Databases
– The Kiss of Death: “Best of…”
– Regulation FD: When Does Information Become “Public?”

– Broc Romanek

August 4, 2009

Corp Fin Deputy Director Shelley Parratt to Speak!

We’re very excited to announce that Corp Fin Deputy Director Shelley Parratt has joined our All-Star cast and will serve as the keynote for our “4th Annual Proxy Disclosure Conference.”

Now that Congress is moving on say-on-pay (and other compensation-changing initiatives), you need to register now to attend our popular conferences and get prepared for a wild proxy season. Remember that the “4th Annual Proxy Disclosure Conference” is paired with the “6th Annual Executive Compensation Conference” – so you automatically get to attend both Conferences for the price of one. They will be held November 9-10th in San Francisco and via Live Nationwide Video Webcast. Here is the agenda for the Conferences. Register now.

SEC Settles Charges that BofA Failed to Disclose Merrill Lynch Bonus Payments

As noted in this press release, yesterday, the SEC settled charges that Bank of America misled investors about the bonuses paid to Merrill Lynch executives at the time of its acquisition of the firm. Bank of America agreed to settle the SEC’s charges and pay a penalty of $33 million. Here is the SEC’s complaint – and here is the litigation release.

The SEC alleges that in the joint merger proxy statement, Bank of America stated that Merrill had agreed that it would not pay year-end performance bonuses or other discretionary compensation to its executives prior to the closing of the merger without Bank of America’s consent. In fact, Bank of America had already contractually authorized Merrill to pay up to $5.8 billion in discretionary bonuses to Merrill executives for 2008.

Note that New York Attorney General Cuomo announced that his investigation was continuing – so this saga may not be over…

Broadridge Speaks on Latest E-Proxy & Proxy Season Stats

Recently, I blogged about Broadridge’s release of data regarding the latest proxy season. Now, I’ve caught up with Lyell Dampeer, President of Broadridge Financial Solutions, to ask him a few questions in this podcast including:

– What were the e-proxy statistics for this past proxy season?
– What should companies be thinking about for next proxy season?
– How did the other proxy season statistics look?

– Broc Romanek