September 19, 2014

Corp Fin Comment Letters: Insiders Selling Ahead of Their Public Availability?

Geez, I don’t know what to make of this Forbes article – which describes this study that found an abnormal level of selling by insiders in the days before Corp Fin comment letters that contained revenue recognition comments were made public. The total amount of abnormal selling in the 2006-2012 study period was $463 million, or $356k on average. I suppose insiders should be savvy enough to understand accounting comments from Corp Fin and their implications – but I still tend to think this couldn’t be happening on a widespread basis? Let me know what you think.

Comment letters (and the related responses) are made public no earlier than 20 business days after all comments are resolved. Learn more in my “SEC Comment Letter Process Handbook.”

New Bill: “The CEO-Employee Pay Fairness Act”

Yesterday, Rep. Chris Van Hollen – the ranking democrat on the House Budget Committee – introduced “The CEO-Employee Pay Fairness Act.” The bill would prevent companies from obtaining Section 162(m) tax deductions for CEO bonuses unless certain employee salaries were raised. The bill’s goal is for companies to reward all workers — not just top executives and major shareholders — for the company’s gains in productivity. Here’s a Washington Post article – and here’s an article from The Hill…

Resource Extraction Rules: SEC Sued (Again)

As noted in this Bloomberg article, Oxfam America has sued the SEC in a Massachusetts federal court to force the SEC to adopt the resource extraction rules again. In July, a federal court in DC vacated the rules the SEC had already adopted. As noted in Steve Quinlivan’s blog, Oxfam cites the following as grounds for relief:

– Administrative Procedure Act (5 U.S.C. § 706(1)) provides a remedy to “compel agency action unlawfully withheld or unreasonably delayed.”
– Federal mandamus statute (28 U.S.C. § 1361) gives a federal district court jurisdiction to compel an agency of the United States to perform a nondiscretionary duty owed to a plaintiff as a matter of law.

– Broc Romanek