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Last week, as noted in this article, the GOP passed the package of bills in HR 37 that got defeated a few weeks ago. This time, only a simple majority was needed to pass – and the House voted 271-154 to pass HR 37 (entitled the “Promoting Job Creation and Reducing Small Business Burdens Act“). Among other things, the bill includes a number of JOBS Act-like changes (see more in this MoFo memo):

– Aligns Exchange Act 12(g) threshold for savings and loan holding companies
– Clarifies the termination of EGC status
– Requires a study of XBRL requirements that may exempt XBRL for many companies
– Permits issuers to submit a summary page on Form 10-K
– Requires a Regulation S-K study intended to simplify disclosure requirements

But as noted in this blog, it’s uncertain whether this bill will pass the Senate. And then as noted in this blog, the White House issued a formal veto threat because the bill also delays part of the Volker Rule effectiveness until July 21, 2019. So the chances of this becoming law are slim at this time…

Congress: Broader Subpoena Power for Committee Chairs – Impact on the SEC?

Egads. The last thing Congress needs is more power to force government employees to come and participate in the theater known as Congressional hearings. But, as noted in this WSJ article, the number of GOP chairs empowered to issue subpoenas without holding a committee vote first is expected to double to 12 by the end of the month. Last Tuesday, the House Financial Services Committee voted to allow Chair Jeb Hensarling (R. Texas) to send a subpoena without a committee vote – so expect to see a steady line of SEC Staffers headed to the Hill as part of the GOP push to pare back Dodd-Frank, etc. Learn more about this change in this memo…

Don’t forget to take advantage of our free “Job Board” – to either post job openings or your profile if you’re looking for a new gig…

The SEC Does Not Care about Its Injunctions

David Smyth of BrooksPierce recently wrote this interesting blog entitled “The SEC Does Not Care about Its Injunctions.” Here’s an excerpt:

It won’t surprise you to learn that the U.S. Code includes this provision: “A court of the United States shall have power to punish by fine or imprisonment, or both, at its discretion, such contempt of its authority . . . as . . . [d]isobedience or resistance to its lawful writ, process, order, rule, decree, or command.” It’s right there at 18 U.S.C. § 401(3). District courts also have inherent power to enforce compliance with their orders through civil contempt. E.g., Roadway Express, Inc. v. Piper, 447 U.S. 752, 764-65 (1980).

Meanwhile, the SEC’s enforcement staff works pretty hard to seek and obtain injunctions against its defendants. They’re odd injunctions. They don’t command someone to avoid particular behavior. In addition to ordering disgorgement and civil penalties, they just order defendants to do what the securities laws already require them to do – that is, obey the law. Some federal trial and appellate courts don’t love these injunctions, finding them overly vague under Rule 65. But they are what they are, and it takes a lot of effort to get them.

So . . . True or False: Having gotten those injunctions from a federal court, the SEC doesn’t really care if defendants violate them. True! If you are such a defendant, and you agree or are compelled not to violate specific provisions of the federal securities laws – as the law itself already requires – the SEC will not seek to have you held in contempt of court if you go ahead and violate those provisions anyway. It might sue you again for new things it thinks you did, but contempt related to the old injunction? Bygones. The past is the past.

– Broc Romanek