Monthly Archives: November 2014

November 25, 2014

DOJ: Compliance Should Be Independent (If Not Separate)

Regardless of staffing or other resources, companies are increasingly feeling pressured to separate their legal and compliance functions as a result of regulatory actions and commentary. However, recent comments by DOJ Senior Deputy Chief James Koukios provide some welcome assurance that a separation of the functions isn’t critical from a regulatory standpoint – provided the compliance function remains independent and autonomous.

According to this article, Koukios recently indicated that the DOJ will look to see: (i) if the compliance function is well-designed, (ii) whether it’s applied in good faith, and (iii) whether it works. In addition, regardless of the organizational structure, the DOJ will expect compliance leadership to have a direct line of communication to the board and the audit committee.

We have heaps of helpful compliance resources in our “Compliance Programs” Practice Area – including this podcast, where Kaplan & Walker’s Jeff Kaplan discusses his take on the compliance officer & GC independence issues and reporting relationships.

Regulatory Compliance Concerns Rank High for GCs & Boards

According to this new Law in the Boardroom survey, both GCs and directors ranked regulatory compliance as among their chief concerns that keep them up at night.

What Keeps You Up At Night?

Directors say:

  1. Data security
  2. Succession planning
  3. Operational efficiency
  4. Regulatory compliance
  5. (TIE) Corporate reputation and crisis preparedness


GCs say:

  1. Regulatory compliance
  2. Data security
  3. Corporate reputation
  4. Crisis preparedness
  5. FCPA


Regulatory compliance also ranked 2nd – just behind Enterprise Risk Management – in terms of areas that GCs indicate they need better information and processess on. Not surprisingly, IT strategy & risk made both directors’ and GCs’ Top 5 list:

In Which Areas Do You Need Better Information & Processes?

Directors say:

  • Strategic planning 56%
  • IT strategy & risk 52%
  • Competitive environment 44%
  • Succession planning 41%
  • M&A strategy 36%

GCs say:

  • ERM 48%
  • Regulatory compliance 46%
  • IT strategy & risk 44%
  • Social media risk management 38%
  • Legal & consultant fees 33%

The survey also reveals a much greater level of anticipated M&A activity than in prior survey years, with over 50% of both GCs and directors indicating an expectation to devote considerable time to M&A – compared to 36% and 42%, respectively, reported last year.

Podcast: Independent Board Leadership Trends

In this podcast, Jamie Carroll Smith discusses board leadership trends based on EY’s review of S&P 1500 companies, including:


– by Randi Val Morrison

November 24, 2014

(Not Much) News from the ABA Fall Meeting

On Friday, I attended the annual ABA Fall Meeting for the Business Law Section. For the “Corp Fin Director’s Dialogue,” Director Keith Higgins brought a handful of other Staffers to join him. Not surprisingly, nary a word was said about the timing of any rulemakings. Given a new GOP Senate, I think it’s hard to predict when things will happen – even if you’re working inside the agency. I’m sure that is frustrating to those working on the rules.

Disclosure effectiveness continues to move inside the Division and comment letters are rolling in (see this nice recap of the ABA’s comment letter by Morgan Lewis). Keith made a plug for folks to voluntarily step up and improve their disclosure on their own, noting the memos issued by audit firms in recent months (they’re posted in our “Disclosure Effectiveness” Practice Area).

One noticeable thing glancing at the senior Corp Fin Staffers on the panel – they’re younger on average than they used to be given a number of high profile retirements this year (and certainly younger than most of the crowd at the ABA event)…

At lunch, Enforcement Director Andrew Ceresney gave this speech about the state of his Division.

Disclosure Effectiveness Initiative: Let The Games Begin!

Last month, Corp Fin Director Keith Higgins delivered this speech regarding the SEC’s disclosure effectiveness project. It provides a good overview of how the initiative is shaping up.

Meanwhile, George Washington University School of Business has wrapped up its own “Initiative on Rethinking Financial Disclosure” for which teams of graduate students were challenged to improve 10-K disclosure – with the winning team’s proposal submitted to the SEC as part of the disclosure effectiveness project. A lot of big names in our field were involved including former SEC Chair Harvey Pitt on the advisory committee – and former Chair Mary Schapiro as one of the judges. This article notes some of the recommendations – which included more summaries and hyperlinks.

To me, this is still all about better usability, as best drawn out by this quote from a student:

“The sections we focused on look like complete legalese. They look like someone is trying to cover their butt,” she says. “We made a key assumption about the 10-K: it is for investors’ needs, not a document that lawyers need to write in order to protect management from being sued.”

Just How Binding Are SEC Statements In An Adopting Release?

Check out this blog by Keith Bishop entitled “Just How Binding Are SEC Statements In An Adopting Release?”…

In addition, check out this blog by Keith Bishop entitled “Will The Courts Stop Deferring To SEC Interpretations?”…

– Broc Romanek

November 21, 2014

Studies: Bridging Company/Investor Sustainability Gaps

The largest studies of CEOs and investors to date on sustainability reveal consensus on the value of sustainability generally, but a huge disconnect in CEOs’ and investors’ views on certain fundamental aspects of sustainability – particularly how well companies are (or aren’t) communicating their sustainability story.

These results reflect some of the major gaps:

  • 80% of CEOs believe that their company is approaching sustainability as a route to competitive advantage. Only 14% of investors believe that the companies they invest in are doing so.
  • 74% of CEOs believe that their company is measuring both positive & negative impacts of activities on sustainability outcomes. Only 17% of investors believe that the companies they invest in are doing this.
  • 57% of CEOs believe that their company is able to set out in detail a strategy for seizing opportunities presented by sustainability. Just 8% of investors believe that the companies they invest in are able to do this.
  • 38% of CEOs believe that their company is able to accurately quantify the business value of sustainability initiatives. Only 7% of investors believe that the companies they invest in can do so.

Notably, investors identified certain shortcomings in their own approach to sustainability as being part of the problem. They acknowledged viewing sustainability as merely a risk management/mitigation issue rather than an opportunity for company growth, differentiation and competitive advantage. Additionally, they noted a need to strengthen their knowledge and capabilities in order to ask the right questions on sustainability, and challenges in identifying which issues have a material effect on their investments.

Investors also identified certain financial market structural challenges – such as a short-term investment focus and quarterly reporting requirements – that contribute to the disconnect. Among the factors they identified to help bridge the communications gap and better integrate sustainability into the global markets are longer term investment strategies and the use of common, industry-wide sustainability metrics – on par with financial performance measures – to enable more accurate identification and comparison of industry leaders.

See the suggested concrete company and investor action steps on page 18 of the investor report, and this PRI release discussing the survey results.

How to React to SASB

The Sustainability Accounting Standards Board (SASB) is self-described as an independent non-profit whose mission is to develop and disseminate sustainability accounting standards that help publicly-listed companies disclose material factors in compliance with SEC requirements. This recent Baker & McKenzie memo does a fine job of succinctly describing how SASB works – as well as the legal and practical implications resulting from SASB’s work and its  increasing visibility and influence.

See also this article where SASB directors Aulana Peters and Elisse Walter discuss the basis for SASB and its sustainability disclosure scheme – including a good explanation of how its standards are designed merely to help companies meet their existing disclosure obligations under Regulation S-K.

Access SASB’s standards and additional resources in our “Social Responsibility” Practice Area.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– UK Regulators Assess & Reject US Whistleblower Bounty Scheme
– Survey: Boards’ Risk Concerns Warrant Focus on Crisis Planning
– General Counsels: Tips for Managing Governance Demands & Risks
– CAQ Field Testing of PCAOB’s Auditor Report Proposal: Implementation Challenges
– Survey: Earnings Call Practices


– by Randi Val Morrison

November 20, 2014

Proxy Access: Will the Whole Foods No-Action Request Maim Private Ordering?

Proxy access is back to being red hot. So hot that I just calendared this webcast in a few weeks: “Proxy Access: A New World of Private Ordering.” Why is it hot? Some pension funds are frustrated because it’s been three years since the court struck down part of Rule 14a-11 and the SEC hasn’t acted further. In addition, they are angry that many boards are ignoring majority votes “against” individual directors – these boards are keeping directors on by declining to accept their resignations.

As a result, as I blogged a few weeks ago, the New York Comptroller has launched a “Boardroom Accountability Project” – through which 75 companies have received a 3%/3-year proxy access proposal (this is the formula that has received majority support so far). And other pension funds are weighing whether to submit similar proposals to other companies.

Meanwhile, as I blogged a few weeks ago on our “Proxy Season Blog,” Whole Foods has submitted a no-action request to Corp Fin arguing that a 3%/3-year proxy access proposal (submitted by retail holder Jim McRitchie) should be excluded because the company intends to have its own proxy access proposal on the ballot – with a 9%/5-year formula! So Whole Foods is seeking exclusion under Rule 14a-8(i)(9), arguing that the 3%/3-year shareholder proposal is an excludable counterproposal.

As the Whole Foods request argues, the Corp Fin Staff frequently permits companies to exclude shareholder proposals asking companies to provide shareholders with the right to call special meetings on the basis of Rule 14a-8(i)(9), when companies agree to ask shareholders to vote on management proposals at a different ownership threshold level than those sought in the shareholder proposals. But as noted in the proponent’s rebuttal (also noted in this blog), the company’s proposal includes a proxy access threshold that likely would never be triggered – Whole Foods’ largest shareholder owns just 5.4%.

Given that the date of the Whole Foods no-action request is October 23rd, Corp Fin should be making a decision in early-to-mid December. The ramifications of that could be quite important, as it could well end the private ordering movement just as it was really getting started…

Here’s a blog from “The Activist Investor” entitled “The Proxy Access Project We Need” – and here’s one entitled “How Activists Collaborate“…

How Proxy Access Fared During 2014

Here’s a recap from Subodh Mishra of ISS’ Governance Exchange: This year, shareholders have given majority backing to six of 14 resolutions that have thus far gone to a vote, with all but one–at Nabors Industries–passing under company vote requirements. Each of the six followed the 3-percent-over-three-years model, with those resolutions collectively netting roughly 55 percent support of votes cast “for” and “against.”

Shareholders at a number of companies this year, including Apple and Bank of America, voted on a variation of the proposal that called for the right at either a lower ownership threshold and/or over a shorter holding period. Those resolutions fared poorly, averaging just 4.5 percent support of votes cast, with the most recent–voted in September at FedEx–netting just 3.2 percent support.

ISS is currently tracking two more proposals–at Cisco and Microsoft–that will go to a vote in late November and early December, respectively. Meanwhile, at the Nov. 5 annual meeting of shareholders, Oracle voters gave roughly 45 percent backing to an access measure, according to a post-meeting statement from the California State Teachers’ Retirement System (CalSTRS).

“Independent shareholders overwhelmingly supported CalSTRS’ proposal opening the corporate proxy to shareholder candidate nominations for the Oracle Corporation Board of Directors,” said CalSTRS Director of Corporate Governance, Anne Sheehan. “While it received approximately 45 percent of the overall vote, it did not pass due to Larry Ellison’s large inside ownership. However, CalSTRS believes shareholders today sent a strong signal to the board of directors, and we expect more accountability from them, as a result.” CalSTRS said a history of governance shortcomings, along with the third successive year of failure to receive majority backing for its compensation plan, “should be a wake-up call to the board that greater responsiveness is required to address the concerns of long-term shareholders.”

Among S&P 500 companies targeted in the 2015 New York City Funds campaign over multiple “priority issues” are Mylan (pay and governance), Nabors Industries (diversity, pay, and governance), Urban Outfitters (diversity and governance), Cimarex Energy (diversity and fossil fuel), Cabot Oil & Gas(diversity and fossil fuel), and Regeneron Pharmaceuticals (diversity and pay).

XBRL: Anti-Fraud Exemption Has Expired for Most

Here’s a note that I recently got from a member:

One deadline that quietly passed that some may not be aware is the expiration of Rule 406T of Regulation S-T. While Interactive Data Files are subject to the anti-fraud provisions of the Securities Act and the Exchange Act, Rule 406T provided an exemption from the anti-fraud provision for issuers during the first 24 months that they became subject to the XBRL rules. The exemption was available if the issuer made a good faith attempt to comply with rule – and if the issuer promptly corrected, by filing an amended exhibit to fix any mistakes in the Interactive Data File promptly after they became aware of the error. Rule 406T expired on October 31st, so companies who are within the first two years of submitting XBRL exhibits will not be able to rely on this exemption anymore…

– Broc Romanek

November 19, 2014

Conflict Minerals: Panel Rehearing Granted on 1st Amendment Issues!

As noted by Cooley’s Cydney Posner in this blog, the DC Circuit Court of Appeals has granted the petitions of the SEC and Amnesty International for a panel rehearing (and the motion of Amnesty to file a supplemental brief) in connection with NAM v. SEC. (The Court also ordered that the petitions filed for rehearing en banc be deferred pending disposition of the petitions for panel rehearing.)

The per curiam order of the Circuit Court directs the parties to file supplemental briefs addressing the following specific questions related to the First Amendment:

(1) What effect, if any, does this court’s ruling in American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18 (D.C. Cir. 2014) (en banc), have on the First Amendment issue in this case regarding the conflict mineral disclosure requirement?

(2) What is the meaning of “purely factual and uncontroversial information” as used in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985), and American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18 (D.C. Cir. 2014) (en banc)?

(3) Is determination of what is “uncontroversial information” a question of fact?

Twist to Fee-Shifting Bylaws: Limit Suing Ability of Small Shareholders

As highlighted in this RacetotheBottom blog and Reuters article – and analyzed in this Cooley blog – Imperial Holdings, a Florida corporation, is trying out a permutation on fee-shifting bylaws: requiring plaintiffs to obtain consents to the litigation from shareholders holding shares in excess of a minimum threshold (3% of the outstanding). The problem the bylaw seeks to address is that shareholder litigation is frequently launched by counsel representing shareholders with only nominal stakes. Here’s the “consent by other shareholders” bylaw.

Meanwhile, in the fee-shifting bylaw lawsuit in Delaware, the defendants have opposed a limit on discovery…

SEC & FASB Issue Guidance on Pushdown Accounting

Yesterday, the SEC’s Office of the Chief Accountant & Corp Fin jointly released Staff Accounting Bulletin #15 to rescind portions of the interpretive guidance included in its SAB Series for what’s known as pushdown accounting. To reflect private sector developments in GAAP, the SAB #115 rescinds SAB Topic 5.J. entitled New Basis of Accounting Required in Certain Circumstances. The new bulletin brings existing guidance into conformity with FASB Update No. 2014-17 – Business Combinations (Topic 805): Pushdown Accounting, a consensus of the FASB Emerging Issues Task Force, which was ratified by the FASB last month and issued yesterday too…

– Broc Romanek

November 18, 2014

Our New “NYSE Listing Standards Handbook”

Spanking brand new. By popular demand, this comprehensive “NYSE Listing Standards Handbook” covers the corporate governance listing standards for companies listed on the NYSE. A “must have” for any listed company (or for those that work for listed companies). This one is a real gem – 114 pages of guidance.

How is Morale at the SEC? A 2014 Job Satisfaction Survey

Here’s the SEC’s 2014 Federal Employee Viewpoint Survey. You can see how the various Divisions & Offices within the SEC compare to each other, as well as how the responses compare to a government wide ratio. The overall number of responses is pretty high, 2472 Staffers. Compare the results to last year’s survey

Treasury Taking Aim at Homegrown REITs?

In this article by Inside Sources, the prospect of Treasury taking action against companies transfering their assets into REITs to lower their tax bills is explored…

– Broc Romanek

November 17, 2014

Conflict Minerals: Getting Ready for Year Two

I have calendared a webcast to help you prepare for your next Form SD. Meanwhile, enjoy this note from Elm Sustainability Partner’s Lawrence Heim:

This is an interesting time in the realm of conflict minerals. Calendar year 2014 is almost over, meaning companies need to be working on two important aspects of their program: preparing for their (or their customers’) CY2014 SEC filing and planning for CY2015 to be the year the “undeterminable” concept ends. The CY2014 filings are likely to differ from CY2013 in several respects. Among other things, we expect there to be more filings made and more Independent Private Sector Audits, or IPSAs, conducted (customer demand will likely drive this in advance of the SEC requirement).

Due to last year’s erroneous disclosure by a number of high profile companies of North Korea as a gold source, expectations of smelter/refiner due diligence are higher for both suppliers and issuers. Key aspects of CY2015 filings tied to the specific classification wording continue to in limbo pending resolution of the First Amendment challenge and SEC’s administrative action. We expect those matters to be resolved in time for the CY2015 filing, and for now recommend that companies proceed as the original disclosure requirement envisioned.

We have posted a number of studies about the first year’s Form SDs in our “Conflict Minerals” Practice Area – including this interesting one from Tulane that includes costs data. Also check out “Conflict Minerals Suppliers: To Screen or Not to Screen, That is the Question” and “Non-Metallic Conflict Minerals: Is You In Or Is You Out?“…

SEC Finds Crowdfunding Site To Be Both General Solicitation & Broker Rule Violation

In this blog, Steve Quinlivan notes that the SEC recently settled this enforcement action against a crowdfunding website because it failed to implement procedures reasonably designed to prevent U.S. persons from accessing and investing in securities through its crowdfunding website. The defendant operated a global, online, securities-based, crowdfunding platform that connects issuers with investors to raise funds in exchange for equity. Its website hosted offerings of securities from non-US based companies.

Also check out this CrowdFund Insider blog entitled “A Funny Thing Happened on the Way to the (2014 SEC Government Small Business) Forum” about the track record of the SEC implementing recommendations from its annual Small Business Forum…

November-December Issue: Deal Lawyers Print Newsletter

This November-December Issue of the Deal Lawyers print newsletter includes:

– What’s the Big Deal? Why Some Seemingly Material Acquisition Agreements Might Never See the Light of Day
– The Quest for Universal Ballots: Might Boards Benefit Too?
– Amendment to Delaware’s Statute of Limitations Rules: Drafting Tips
– The Continuing Importance of Process in Entire Fairness Review: In re Nine Systems
– Respecting Boilerplate: Scope and Communications Provisions

If you’re not yet a subscriber, try a 2015 no-risk trial to get a non-blurred version of this issue on a complimentary basis.

– Broc Romanek

November 14, 2014

Only Interested in Transactional Law: The Summer Associate Taboo?

I recently got this fascinating stream-of-consciousness from a member (feel free to share any human interest stories you have, I can post them anonymously or with attribution):

Ah, Fall of 2004. How I remember it well…

Running from on-campus interview to on-campus interview, declining call-backs, requesting post-offer meetings with associates…trying to decide which offer to accept, based on Firm differentiators such as salary and reputation, but also width of hallways, number of windows per associate office, and various other “decision makers.” My biggest concern that semester was trying to disguise my pregnancy, while wearing suits that hung perfectly in July and barely buttoned during late October. Did I want to practice transactional law or litigation? I hadn’t a clue and was eager to experience both. And that was perfectly okay.

Fast forward, Fall of 2006. How I remember it well…

My colleagues and I, arriving at the Firm — our Firm — wearing new suits and new shoes, with new haircuts. Corporate, securities, finance, and other transactional work all were booming. Deal after deal after deal. We heard about how Firms had such trouble retaining mid-level corporate associates, and, sure enough, nearly every few weeks, we saw another second, third, fourth year colleague heading to greener in-house pastures in search of balance.

As know-nothing first-years, we already were receiving weekly calls from head-hunters, and our salaries were raised, in part, to compete with the allure of the money offered by the investment banks, hedge funds, and private equity firms we represented. While at lunch, “interviewing” prospective summer associates, we promoted interest in transactional work — emphasizing the size of transactions, what we were learning, the newly-discovered joy of “deal rush,” while de-emphasizing the crazy hours and consistently frantic pace.

Our practice group was so invested in recruiting and hiring lateral associates that almost any lateral associate, whether transactionally-trained or litigator, would do; we became familiar with the technical term “re-tooling.” “You want to do Corporate work?” “When can you start?”

Now it’s Fall of 2014.

I’m the mid-level now – and things are just a little bit different. The “interview” lunches are all but gone – and the law students who trickle into the hallways are smiling hard and barely breathing. Gone are the tough questions about work-life balance, and the smart ones don’t even pretend to want to pursue the transactional path I’ve taken. Our Firm has selected a team of “primary interviewers” – and for the first time, we have a Fall Recruiting Launch, designed to ensure that we present a consistent recruiting message and apply consistent evaluation criteria.

Any questions? “What if a candidate asks if we expect to be hiring in that area?” We should say that we are continually monitoring the marketplace and that our hiring decisions for particular practice areas will be based on the needs of our Firm at the time of hiring. “But if the candidate expresses that he or she only wants to do Corporate law, then that may be a factor in assessing the candidate’s judgment.” Hmmm.

I’ve been asked to travel with some partners, out-of-state, to attend a recruiting meet-and-greet for “promising” law students, all of whom go to “better” law schools than I attended, and who, no doubt, have more flawless transcripts. Receptions, conventions, meetings, I’m a good Firm cheerleader. I love to meet new people, mingle, talk about our Firm, school, life, my kids, my crazy Fall recruiting stories.

On this particular day, however, I feel a bit like a spy or a decoy. I try to hint to the students with whom I’m chatting that my Firm is particularly busy in certain practice groups and that, this year, it certainly doesn’t hurt to be interested in litigation. I tacitly invite them, urge them, not to show too much interest in what I do — corporate, securities, finance work. “Yes, I love it. It’s so funny, though; when I was a summer associate, I really thought that litigation was my thing. It’s a good idea to keep an open mind, you know? How do you feel about litigation? Our Firm does a lot of commercial litigation, and we’re always hiring for that. Oh, you really want transactional? Well, you know, bankruptcy is booming right now, and that has a mix of litigation and transactional. That partner over there is a bankruptcy expert.” Hint. Hint. Hint.

I try my best, say my goodbyes, and board the train back to my home city. The next day, as expected, an e-mail appears, which says something like, “Thank you for traveling on behalf of the Firm last night. To assist our recruiting efforts, please indicate the names of any students whom you believe the Firm should invite for a call-back interview. Please also indicate the names of any students whom you believe may not be a good fit for the Firm, and please indicate why.” We are urged to rank candidates.

I carefully list the names of my favorites from the preceding night, after struggling to pin the names on the appropriate faces in my mind. I hesitate. But then I do it. Quickly and shamefully. I type two names under the “not good fit” category. Yes, in my opinion, they were the least outgoing and the most socially awkward. But that’s not the reason. Not this year. Despite my best efforts, all of my hard work, my steering, my hints, those two never wavered. So, under the “why,” this Corporate lawyer typed what may have become the new interviewee taboo, “ONLY interested in Corporate law.”

– Broc Romanek

November 13, 2014

Survey Results: Earnings Releases and Earnings Calls

Here are the results from a recent survey on earnings releases and earnings calls (the last similar survey was in ’07):

1. Regarding the archiving of earnings calls on our corporate web site:

– We archive them for one quarter – 31%
– We archive them for six months – 3%
– We archive them for between 6 and 12 months – 6%
– We archive them for 12 months – 40%
– We archive them for over one year – 11%
– We don’t archive our earnings calls – 9%

2. When we make/provide our earnings calls and related materials timely by a broadly available webcast and/or teleconference:

– We always file (or “furnish”) the transcript and related materials on a Form 8-K – 14%
– We sometimes file (or “furnish”) the transcript and related materials on a Form 8-K – 3%
– We never file (or “furnish”) a transcript and related materials on a Form 8-K (unless material information was disclosed during the earnings call that was not disclosed in the earnings release) – 84%

3. During the past few years:

– We have changed our earnings release practices, so that such releases coincide with our 10-Q filings – 28%
– We have kept our earnings release practices the same, and they get released a few weeks before our 10-Q filings – 22%
– We have kept our earnings release practices the same, and they get released a few days before our 10-Q filings – 17%
– We have changed our earnings release practices, so that they get released closer to the time of our 10-Q filings – 8%
– Our earnings releases have always been released at the same time as the 10-Q filings – 25%
– We decided to no longer provide earnings releases at all – 0%

4. In the near future:

– We definitely intend to revise the timing of our earnings releases so that they coincide with our 10-Q filings (or no longer provide earnings releases at all)- 0%
– We might revise the timing of our earnings releases so that they coincide with our 10-Q filings (or no longer provide earnings releases at all) – 10%
– We don’t need to change our earnings release practices because we recently did so – 43%
– We are comfortable with our earnings releases being issued before our 10-Q filings and don’t need to review those practices – 47%
– We already no longer provide earnings releases at all – 0%

5. We issue our earnings releases:

– Immediately before the start of the earnings calls – 17%
– Two hours before start of the earnings calls – 42%
– More than two hours before the start of the earnings calls – 42%
– During or immediately after earnings calls – 0%
– After, but within four business days of the earnings calls – 0%

6. We disclose earnings guidance:

– In the text of the earnings release – 23%
– During the earnings call, but not in the text of the earnings release – 17%
– On a Form 8-K filing, but not in the text of the earnings release – 0%
– In the text of the earnings release as well as during the earnings call – 23%
– On a Form 8-K filing and in the text of the earnings release – 3%
– During the earnings call, on a Form 8-K filing and in the text of the earnings release – 17%
– We do not give earnings guidance – 17%

7. We provide archives of our earnings calls (eg. calling them “podcasts” sometimes):

– On our website only – 75%
– On iTunes only – 0%
– On both our website and iTunes – 0%
– We do not provide audio archives of our earnings calls – 25%

Take a moment to participate in our “Quick Survey on Shareholder Engagement” and our “Quick Survey on Whistleblower Policies & Procedures.”

Fifth Time’s A Charm: Series Of Corporate Disclosures, Together, Can Be A “Corrective Disclosure”

As noted in this blog, a federal appeals court recently revived a securities class action that had been dismissed by the trial court for failure to plead loss causation. In Public Employees Ret. Sys. of Mississippi v. Amedisys, 13-30580 (5th Cir.; 10/14), the court found that a series of partial disclosures could collectively constitute a “corrective disclosure” of the defendant’s misrepresentations, which the plaintiffs plausibly alleged caused a decline in the defendant’s stock price.

Transcript: “The Art of Negotiation”

We have posted the transcript for the recent webcast: “The Art of Negotiation.”

– Broc Romanek

November 12, 2014

More on “EDGAR Dissemination: Still Favoring Subscribers?”

Last Monday, I blogged about a study that found that paying subscribers appear to gain access to SEC filings ahead of the rest of us. Good news! This WSJ article notes how that advantage has steadily dwindled over the past week since the mass media has been covering this story. Here’s an excerpt from that article:

On Tuesday, filings were published on the SEC’s website an average of 35 seconds after Mr. Jackson received them on his direct feed. The lag dropped to 27 seconds on Wednesday, when the Journal article was published. On Thursday and Friday the delay narrowed even more, with filings appearing on the SEC’s “Edgar” site an average of about three seconds and 2.5 seconds, respectively, after being published on Mr. Jackson’s feed. The drop in the lag time continued Monday, according to Mr. Mitts.

Poll Results: When Did EDGAR Filings Become Available in Real-Time? Shocking Answer of 2002

I also ran a poll in this blog about when EDGAR filings became available to the general public in real-time. For some reason, I wasn’t shocked that only 22% guessed the right answer – that the delay of SEC’s EDGAR database being available to the general public only after a 24-48 hour delay ended in 2002. I wasn’t shocked because the right answer is so unbelievable. Anyways, 41% guessed 1995 and 29% guessed 2000 (6% guessed 1989 and 2% guessed 1987). My lack of surprise is that it’s shocking that this incredible delay continued for years and years after EDGAR was born…

More on “ISS Announces QuickScore 3.0: Verify Your Data by November 14th”

A few weeks ago, I blogged that ISS announced that QuickScore 3.0 will be launched on November 24th for the 2015 proxy season (in other words, that’s the first date the new governance ratings will be included in research reports). Since then, ISS changed the home page of QuickScore 3.0 to this page – and posted the related technical document on that page. In addition, I have posted the best of the memos in the “Governance Ratings” Practice Area – including this nifty one from Sullivan & Cromwell.

Remember that data verification for QuickScore 3.0 ends on Friday! Meanwhile, we are posting oodles of memos on the policy updates for both ISS & Glass Lewis in our “Proxy Advisors” Practice Area

Poll Redux: How Are You Responding to Your SDX Shareholder Engagement Letter?

Back in September, I ran a poll in this blog to address the query about how companies were responding to the SDX engagement letter (here’s those results). Some members have asked that I re-run the poll to see if there are any changes to what folks are doing. Here it is:


– Broc Romanek