November 19, 2015

Corp Fin’s Keith Higgins Speaks on the Future of Executive Pay Disclosures

A few days ago, Corp Fin Director Keith Higgins delivered this speech entitled “Executive Compensation: Looking Beyond the Dodd-Frank Horizon.” It’s definitely worth reading – and an easy read. It looks ahead to the SEC’s Disclosure Effectiveness project and it covers the executive pay disclosure waterfront (see Mark Borges’ blog on it), including:

– Item 10 of Schedule 14A
– Form S-8
– Regulation S-K
– CD&A
– Compensation Tables
– Compensation Committee Report

DOJ Updates US Attorneys’ Manual for Yates Guidance

A few days ago, the DOJ revised the chapter on the “Principles of Federal Prosecution of Business Organizations” in the United States Attorneys’ Manual – commonly known as the “Filip factors” – to incorporate previously announced “Yates” guidance addressing the accountability of individual employees in civil and criminal investigations of corporate wrongdoing. The new policies require that to receive any cooperation credit, a company “must identify all individuals involved in or responsible for the misconduct at issue, regardless of their position, status or seniority, and provide to the Department all facts relating to that misconduct.” The new policies also clarify issues relating to the attorney-client privilege, timely self-reporting, foreign data privacy restrictions, and the prosecution of individuals.

SEC Enforcement: Self-Reporting Required for Deferred Prosecution or Non-Prosecution Agreement

Here’s a blog by Steve Quinlivan:

At a recent conference focused on FCPA matters, Andrew Ceresney, Director, SEC Division of Enforcement, focused on the benefits of self-reporting and cooperating with the SEC on FCPA matters. Mr. Ceresney noted that the Enforcement Division has determined that going forward, a company must self-report misconduct in order to be eligible for the Division to recommend a deferred prosecution agreement or non-prosecution agreement to the Commission in an FCPA case. He also stated he was hopeful that this condition on the decision to recommend a DPA or NPA will further incentivize firms to promptly report FCPA misconduct to the SEC and further emphasize the benefits that come with self-reporting and cooperation.

While it is now known where the SEC stands, in reality the Enforcement Division’s position just implements historical practice. In each FCPA case where the SEC has previously entered into a DPA or NPA, the company involved self-reported the violations, and then provided significant cooperation throughout the investigation.

Broc Romanek