January 2, 2015

Study: Does SEC Enforcement Treat Bigger Companies Differently?

Food for thought as we start another year. As noted in this Forbes article, a new study by Jonas Heese of Harvard Business School claims that the SEC’s Enforcement Division treats companies with higher “employment intensity” better than other companies – a form of regulatory capture. “Employment intensity” is the number of a firm’s employees relative to its size.

Having been a first row observer to the Enforcement process at the SEC, I find this hard to believe. If anything, higher profile companies would have bigger targets on their backs as the agency hopes to send messages to the market in general with its cases. And individual Staffers are hoping to make a name for themselves by catching big fish in the act…

Venture Capital: Delaware Court Interprets Non-Standard NVCA Agreement

Here’s the intro from this Morris Nichols memo: “For reasons of economy in an early-stage investment, venture capitalists and founders often will use forms made available by the National Venture Capital Association (NVCA) as a basis to negotiate the post-investment governance structure of a corporation. In Salamone v. Gorman, the Delaware Supreme Court interpreted the product of such a negotiation. As noted in the opinion, the NVCA form contemplates per share (and not per capita) voting, and the opinion is a reminder of the need for clarity if there is intent to depart from such a regime.”

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:

– Transition Timeline for New COSO Framework
– Restatements Have Fallen Sharply Since SOX
– Survey: Benchmarking the Accounting & Finance Function
– Directors: Recognizing & Reacting to Red (or Yellow) Flags
– FASB Issues Going Concern Assessment & Disclosure Standard

– Broc Romanek