June 20, 2011

The Need to Change Your ID/Password for this Site

Starting today, due to an upgrade in our database, all individual login and passwords for our various sites have been reset. Your new username will be the email address that was in an email that was sent to on Friday. Your temporary password will be your five-digit, billing zip code. Beginning today, on your first login, you will be asked to reset your password as part of a simple process.

Once you have reset your password, it will automatically carryover to each of the following websites (if you’re a member of them):


Our HQ is handling questions on this (not me – I don’t even have access to our database) and their phone lines are open for extended hours this week: 925.685.5111. They have posted FAQs regarding this change.

If you use our popular Romeo & Dye’s Section 16 Filer software, you will need to download a new version of the software starting today and will automatically be prompted to do so.

Why Were the SEC’s New Whistleblower Rules Published Late in the Federal Register?

A member recently asked why the SEC’s new whistleblower rules were seemingly delayed in being published in the Federal Register until June 13th – since the agency issued its adopting release back in May after the Commission blessed them at a May 25th open Commission meeting (note: link to Fed Reg version is not yet posted on the SEC’s site)? To get something published in the Federal Register, the Office of Management & Budget (OMB) must conduct a review and then the adopting release moves to the Federal Register people (Government Printing Office).

Even though there seemed to be a delay for the whistleblower rules, it’s not really anything to complain about because it just pushed out the effective date for the rules. In other words, a delay would never have any bearing on whether an approved set of rules were indeed final – there would not be a reprieve from the Governor…

Gun-Jumping: Did Groupon Break SEC Rules?

This Forbes’ article notes how the timing of a lengthy NY Times piece on Groupon – that included behind-the-scenes access for the reporter – came out just a few days before Groupon filed a Form S-1 with the SEC for an IPO.

I haven’t seen any other commentary on this fact pattern – probably because most realize that the playing field has changed a bit due to the ’33 Act reform that took place in ’05. You may recall the infamous interview with the Google founders in Playboy a few days before that company filed its Form S-1 back in ’04. At first, Google was determined to fight the SEC regarding gun-jumping allegations – but the company ultimately backed down and included the entire Playboy interview in Google’s IPO prospectus.

Here’s an excerpt from the letter sent by SEC Chair Schapiro to Rep. Issa recently regarding more ’33 Act reform – the excerpt addresses this type of situation:

In April 2004, less than a week before Google initially filed its registration statement for its initial public offering, Google’s two founders were interviewed by Playboy magazine. Google informed the staff of the interview in August 2004 and advised the staff that the interview would appear in the September 2004 issue of Playboy, which was scheduled to hit newsstands after the offering period for Google’s innovative “Dutch auction initial public offering closed.

Under the rules in effect at the time of this offering, the publication of an article such as this in connection with an initial public offering could raise concerns about inappropriate market conditioning and the potential need for a cooling-off period. For a variety of reasons, primarily based on (l) the timing of the release of the article after the completion ofthe offering period for the auction; and (2) Google filing the article as an exhibit to its registration statement (thereby including it as part of its offering materials), the staff determined that the publication of the article would not inappropriately condition the market for Google’s initial public offering.

As such, the staff did not impose any cooling-off period or otherwise delay the offering as a result of the article. Beyond this, it is important to note that, had the 2005 communications rules described above been in effect at the time, even if the Playboy article was published before Google’s offering period for the auction had closed, Google’s initial public offering would not have been delayed.

By contrast, another initial public offering in 2004 had a different result under the rules in existence at the time., Inc. had planned to go effective on its registration statement in May 2004 when an article appeared in The New York Times featuring an interview with the company’s CEO. The CEO had invited a reporter to follow him for a day during the road show for the offering, and the article, which was published during the road show, included substantial information about the offering. It appeared to the staff that the interview was granted – and the reporter was given access to the road show process – in an effort for or its CEO to communicate with prospective investors through the article, which was not permitted under the rules at that time.

To address gun-jumping concerns, the staff imposed a cooling-off period. Under the communications rules adopted in 2005, this media coverage would not have required delay of the offering if certain filings, such as filing a copy of the article or its contents as a free-writing prospectus, were made.

Webcast: “The Latest Compensation Disclosures: A Proxy Season Post-Mortem”

Tune in tomorrow for the webcast – “The Latest Compensation Disclosures: A Proxy Season Post-Mortem” – to hear Mark Borges of Compensia, Dave Lynn of and Morrison & Foerster and Ron Mueller of Gibson Dunn analyze what was (and what was not) disclosed this proxy season.

I’ve got a quote in this interesting column in yesterday’s NY Times by Gretchen Morgenson in which she analyzes a fascinating report that compares CEO pay with a number of different metrics. For example: “24 companies where cash compensation last year amounted to 2 percent or more of the company’s net income from continuing operations.”

– Broc Romanek