January 16, 2013

End of the Year Lists: How Was the SEC’s Enforcement’s Year?

As with the end of every calendar year, lists are made and analyzed. This Reuters article counts the number of settlements by the SEC’s Enforcement Division. Meanwhile, this National Law Journal article penned by Enforcement Director Rob Khuzami and Deputy Director George Canellos supports their legacy. The article starts like this:

In his December 3, 2012, column, “SEC enforcement: What has gone wrong?,” Columbia Law School professor John C. Coffee Jr. makes a series of claims about U.S. Securities and Exchange Commission enforcement cases. These claims are inaccurate and paint a distorted picture of an enforcement program that has achieved record results in recent years. As a solution to the problems he sees, Coffee proposes that the SEC outsource its biggest cases to private contingency-fee lawyers — a suggestion that ignores critical differences between the SEC’s goals as a regulator and those of a litigant seeking monetary damages.

Finally, it’s worth noting this Reuters article entitled “SEC probes Ernst & Young over audit client lobbying.”

SEC Approves NYSE’s “Methods for Providing Notice” Amendment

Here’s news from Cooley’s Cydney Posner:

The SEC has just approved an amendment to the NYSE rules regarding the method for providing notices to the NYSE of matters or events where timely notification is essential for investors to take certain actions. Currently, the Manual provides for various methods of notice. Now, the NYSE is providing, in Section 204.00, a new, uniform method of notification through a web-based communication system – either a web portal ( ) or an email address – specified by the NYSE in a prominent position on its website.

The new method will be applicable to notices regarding the following events:

– Closing of transfer books;
– Notice of dividend action or action relating to a stock distribution;
– Meetings of shareholders, notice of the fixing of a date for the taking of a record of shareholders or for the closing of transfer books;
– Redemption of listed securities;
– Notice of corporate action which will result in, or which looks toward, either the partial or full call for redemption of a listed security; notice of dates set in connection with the calling of any meeting of shareholders; and
– Notice by transfer agents of the number of shares outstanding at the end of each calendar quarter.

In emergencies, such as technical problems at the NYSE or the company, companies will be able to provide notifications by telephone and confirm by fax. In addition, where a material event or a statement dealing with a rumor that requires immediate release is made shortly before the opening or during market hours, companies must notify the NYSE using the telephone alert procedures set forth in Section 202.06(B). Under those procedures, the company must give ten minutes notice to its NYSE representative by telephone (along with transmission of the written text) prior to release of the announcement; under the new rule, the written text must now be transmitted using the web-based communication system.

For the remaining notification provisions in the Manual that do not direct companies to follow the new notification methods, companies may use the methods provided for in Section 204.00 or any other reasonable method. (In these other events, more flexibility is permitted because, while the NYSE needs to be informed promptly, the NYSE believes that a company’s failure to notify the NYSE immediately would not significantly disadvantage investors.)

The NYSE is also making some technical, clarifying and conforming changes to the “Guide to Requirements for Submitting Data to the Exchange.” Finally, the number of hard copies of proxy materials required to be provided to the NYSE is being reduced from six to three.

Webcast: “The Latest Developments: Your Upcoming Proxy Disclosures –
What You Need to Do Now!”

Tune in tomorrow for’s webcast – “The Latest Developments: Your Upcoming Proxy Disclosures – What You Need to Do Now!” – to hear Mark Borges of Compensia, Alan Dye of Hogan Lovells and, Robbi Fox of Exequity, Dave Lynn of and Morrison & Foerster and Ron Mueller of Gibson Dunn discuss all the latest guidance about how to overhaul your upcoming disclosures including these topics:

– Overview of key lessons from the 2012 proxy season
– The rise of the proxy summary
– Developments with CD&A and executive summaries – including realized/realizable pay
– The impact of the compensation committee and advisor independence rules in 2013
– Hedging and pledging policies in the wake of the 2013 ISS policy change
– Engagement strategies for 2013
– Compensation and governance shareholder proposals

– Broc Romanek