December 14, 2018

Next Wednesday! SEC Reschedules “Quarterly Reports” Meeting (& Adds Hedging)

We blogged several weeks ago about a scheduled open Commission meeting to consider a “request for comment” on the nature & content of quarterly reports & earnings releases. That meeting was cancelled due to President George H.W. Bush’s funeral. Yesterday, the SEC posted this Sunshine Act notice for the rescheduled meeting, to be held next Wednesday – December 19th. And at this meeting, the SEC will also consider adopting the long-pending hedging rules – as required by Section 955 of Dodd-Frank…

“Human Rights” Due Diligence

A growing number of investors are starting to ask companies how they manage human rights risks – but it’s a difficult thing to get your arms around. A recent report from the “UN Working Group on Business & Human Rights” says that the best thing to do is to just get started with the four-step diligence process (as outlined in this “Executive Summary”).

This 27-page annex provides a deeper dive on tools & resources, based on “lessons learned” from early adopters. Here’s an excerpt:

Enterprises should begin to consider the risks of adverse human rights impacts associated with the sector (or sectors) in which the enterprise is operating. For instance, the extractive sector must consider the human rights in communities affected by their projects, the garment sector must consider supply chain labour practices, and the information technology sector must consider the human rights affected when privacy is not adequately protected.

These examples are only some of the risks that are obvious in these sectors. Sector risks will be associated by the nature of the products and production processes as well as with the way the sector is organized. Some risks are common to almost all sectors. As part of the identification process, the enterprise should go through the list of internationally-recognized human rights.

Trading Suspensions: The Shareholder Perspective

This MarketWatch article looks at the consequences that shareholders face when a company’s stock is suspended or delisted – and follows the journey of one company, along with its shareholders and plaintiffs’ lawyers. Here’s the intro (and find more guidance on this topic in our “Delistings/Trading Suspensions” Practice Area):

You’re a thrill seeker, trading in highflying cannabis and crypto stocks, but you think you can get out any time. Suddenly there’s news of an unexpected trading stop or suspension and delisting by an exchange or by the Securities and Exchange Commission. Is all lost?

Unfortunately, according to the SEC, that may be the case. If there’s no exchange to trade that hot stock, the shares may become worthless, the SEC warns in an Investor Bulletin about the consequences of trading suspensions.

Liz Dunshee