September 22, 2014

The House’s New JOBS Act Bill: A Closer Look

Buried at the end of a long blog last week was a note that the House passed HR 5405, a JOBS Act-related bill called the “Promoting Job Creation & Reducing Small Business Burdens Act.” HR 5405 is a collection of 10 separate Acts plus more. It’s amazing the House passed anything given that Congress is only working 8 days from mid-July until the end of November!

If enacted into law, it could present a bunch of new Congressionally-mandated tasks for Corp Fin to tackle (a mere 60 days to implement Section 1101’s adjustment to Rule 701 threshold) – thereby reducing the likelihood that we will get effective disclosure reform anytime soon (although Section 1003 requires a study that sounds awfully similar to what Corp Fin is already doing in this area). Or maybe it would ramp up that effort as Section 1002 gives the SEC only 180 days to scale back disclosure requirements for smaller companies – and reduce “duplicative, overlapping, outdated or unnecessary” disclosure requirements for all companies.

There are a number of things in HR 5405 that are already required. Shocker. For example:

– Liquidity pilot program is already required by the JOBS Act and the SEC has a pending proposal from FINRA and the exchanges to implement it.
– Review/streamlining of S-K is already required by the JOBS Act.

Then there is always at least one idiotic thing that finds its way into the work of Congress. In this case, it’s Section 1001 – it would force the SEC to adopt a rule that “allows” companies to use a summary page for its Form 10-K – but companies could only do this if the summary page includes links to more deeper discussions in the 10-K. I’m pretty sure that is already allowed if a company wanted to do it – and it sounds pretty similar to an amplified table of contents…

By the way, HR 5405 includes some Dodd-Frank technical corrections – but it doesn’t include the “wish list” item that stops the SEC’s adoption of a pay ratio disclosure rule. Note that the Chamber issued a letter supporting this bill. And note the controversy over collateralized loan obligations – dealt with in this bill and in a companion bill – as noted in this article. Meanwhile, SEC Commissioner Gallagher delivered this speech last week about institutionalizing a small business focus…

Today’s Webcast: “Cybersecurity Role-Play: What to Do & Who Does What, When”

Does the magnitude of the Home Depot breach rock you to your core? Three times as many credit cards stolen as the Target incident. Tune in today for the webcast — “Cybersecurity Role-Play: What to Do & Who Does What, When” – to hear the FBI’s Richard Jacobs and Cleary Gottlieb’s Louise Parent, Craig Brod, Pam Marcogliese and Jonathan Kolodner role-play a variety of possible cybersecurity scenarios that could happen to you. Please print out these “Hypotheticals” before the program.

And also check out the audio archive for last week’s companion webcast — “Cybersecurity: Working the Calm Before the Storm“— during which Weil Gotshal’s Paul Ferrillo, Hogan Lovells’ Harriet Pearson and Dave Lynn of and Morrison & Foerster analyzed a host of issues that you need to consider now — before you have a security breach.

This WSJ article entitled “Ex-Cyber Spy’s Message to Board Members: You’re Not OK” is an eye-opener…

The Gender Disparity of Social CEOs

In this Huffington Post piece, my good friend Andrea Learned explores the gender disparity in CEOs that leverage social media to get their message across. Check it out!

– Broc Romanek