TheCorporateCounsel.net

If you’re a regular reader of this blog, you know that nothing excites me more than when someone fools the SEC’s Edgar & makes a fake filing! A little drool perhaps. Plug the term “fake” into the search box of this blog & you’ll see plenty of fake filings coverage.

The latest involves the filing of a fake Schedule TO-C, making it look like Fitbit was in play (here’s an article from back when that happened). The SEC brought a civil case; the DOJ brought a criminal one. And this dude went through all this trouble – and got into so much trouble – for a measly $3k in profit! Dummy.

Here’s an excerpt from the SEC’s press release:

According to the SEC’s complaint, Robert W. Murray purchased Fitbit call options just minutes before a fake tender offer that he orchestrated was filed on the SEC’s EDGAR system purporting that a company named ABM Capital LTD sought to acquire Fitbit’s outstanding shares at a substantial premium. Fitbit’s stock price temporarily spiked when the tender offer became publicly available on Nov. 10, 2016, and Murray sold all of his options for a profit of approximately $3,100.

The SEC alleges that Murray created an email account under the name of someone he found on the internet, and the email account was used to gain access to the EDGAR system. Murray then allegedly listed that person as the CFO of ABM Capital and used a business address associated with that person in the fake filing. The SEC also alleges that Murray attempted to conceal his identity and actual location at the time of the filing after conducting research into prior SEC cases that highlighted the IP addresses the false filers used to submit forms on EDGAR. According to the SEC’s complaint, it appeared as though the system was being accessed from a different state by using an IP address registered to a company located in Napa, California.

Shareholder Proposals: The Battle Over BRT’s Reform Proposal Begins

Raising the bar for proponents to get their shareholder proposals on the ballot is a theme in the “Financial Choice Act,” as well as the reform package offered by the Business Roundtable last year. The Choice Act’s reform would go beyond what the BRT seeks, as noted in this Bloomberg article. This article also notes how shareholders are asking questions about the BRT proposal this proxy season. Here’s an excerpt:

Anne Sheehan, director of corporate governance at the California State Teachers’ Retirement System (CalSTRS), and Tim Smith, who leads Walden Asset Management’s shareholder engagement, have also sent letters to the CEOs of nearly 50 companies that are members of the roundtable asking where they stand on shareholder proposals. “We do not believe that the Business Roundtable is reflecting the views of companies with a history of meaningful and constructive engagement with investors,” the letters say.

Another letter from Sheehan and other institutional investors with more than $4 trillion in combined assets was sent May 17 to all members of the House of Representatives as they gear up to vote on the bill soon.

BlackRock Switch Helps Pass ‘Historic’ Climate Proposal

I blogged this on our “Proxy Season Blog” on Friday, but it bears repeating: As noted in this Reuters article, a shareholder proposal at Occidental Petroleum – often referred to as “Oxy” – earned 67% support last week even though the company’s board recommended against. This was a “climate risk two-degree scenario analysis” proposal. As discussed in the Reuters article, BlackRock supported the Oxy proposal — its first support for a climate resolution, which bodes well for future climate proposals (but not all of them).

Now, all eyes are on the ExxonMobil vote on this same issue, May 31st in Dallas (where interestingly, ISS also came out against Exxon CEO’s pay package)…

– Broc Romanek