October 28, 2010

FASB: Proposed Loss Contingency Standard Won’t Apply to Calendar Year-End Form 10-Ks

Here is news from Davis Polk: At its open meeting yesterday, the FASB advised that calendar year-end companies will not be required to comply with the FASB’s proposed new loss contingency disclosure standards in their 2010 Form 10-Ks. The FASB indicated that it does plan to conduct redeliberations on the proposed standard at a future meeting.

The FASB first proposed amendments to its loss contingency disclosure standards in July 2008. Its first proposal met significant opposition due to concerns that it would require disclosure of information that could be prejudicial in litigation. In July 2010, the FASB proposed a revised new loss contingency standard which it had planned to finalize by year-end but commenters voiced the same concerns about this new proposal–mainly that the new standard would require the disclosure of prejudicial information.

Proxy Plumbing: An Interesting Phenomenon

Last week, I posted a “cute” poll on this blog asking about the reasons why you may not have submitted a comment letter to the SEC. 40% said they were too busy with Dodd-Frank; 21% said they were too busy with their Halloween costume; 13% said they don’t comment on concept releases, just proposals and 27% said they had been assimilated.

For this project of the SEC, an interesting phenomenon has arisen. A number of sites and blogs have been created just on this topic – see the customized search engine for the plumbing comment letters in the latest entry) and Somewhat unprecedented and I believe a true harbinger of things to come. Falls in line with my prediction that many more of us will one day be bloggers – and that solicitations for annual meetings will someday be waged much more online…

Dodd-Frank: Repeal of Provision Protecting SEC Exam Confidentiality from FOIA

Before Congress broke for the upcoming election, it took action to repeal Section 929I of Dodd-Frank. Section 929I had amended the 1934 Act to provide the SEC with authority to protect information gathered under its examination authority from both public disclosure under the Freedom of Information Act and disclosure in response to subpoenas in litigation. Just days after the SEC issued guidance concerning how it would apply that provision, Congress repealed Section 929I – despite testimony from SEC Chair Schapiro that the provision would enhance the SEC’s ability to conduct timely and comprehensive examinations. We have posted memos regarding the repeal in our “FOIA” Practice Area.

The SEC’s interpretation of FOIA has not been popular recently. For example, see this NY Times article entitled “Stonewalled by the SEC.” Also see Keith Bishop’s blog about CalPERS and the California Public Records Act.

– Broc Romanek