June 16, 2011

A Sixth Say-on-Pay Lawsuit

Last week, a sixth company that failed to garner majority support for their say-on-pay was sued – Hercules Offshore in a district court in Texas (here’s the complaint). We continue to post pleadings from these cases in’s “Say-on-Pay” Practice Area.

Yesterday, I traded tweets with someone regarding the probability that all companies that fail to earn majority support will be sued. I’m not convinced that will happen since these cases are brought in such diverse venues and by different plaintiff’s firms. Does anyone know of any guiding hand behind the scenes of these six lawsuits?

It’s also interesting to note that I haven’t seen a single law firm memo yet about these say-on-pay lawsuits even though it appears they are the talk of the town whenever I am out and about. Let me know if you see one…

Let the Wild Rumpus Begin! Competing Bills to Upsize ’34 Act Registration Threshold

Yesterday, I blogged about a new House bill (HR 2167) that would raise the ’34 Act registration threshold to 1000 shareholders (from 500) and exclude employees and accredited investors. In doing so, I neglected to mention another recent House bill (H.R. 1965) that would raise the threshold to 2000 shareholders and also raise the deregistration threshold from 300 to 1200 shareholders. As noted in Jim Hamilton’s blog, there also is a Senate companion bill (S 556) for this one.

For a view questioning the wisdom of raising the threshold, check out Suzanne Rothwell’s entry yesterday on “The Mentor Blog.”

SEC Enforcement Director Receives Delegated Power to Immunize Witnesses

A few days ago, the SEC Commissioners gave delegated authority to the agency’s Enforcement Director to immunize witnesses. I’m not certain that immunization happens all that happen at the SEC – since these are just civil cases – and in conjunction with 18 U.S.C. sections 6002 and 6004, I think this essentially allows Rob Khuzami to immunize any witness who is “pleading the Fifth” in an SEC investigation, thereby disallowing them to continue to assert the Fifth Amendment with the caveat that their testimony can’t be used against them in any criminal case.

– Broc Romanek