As we blogged when the government shutdown started a few weeks ago, Corp Fin issued a set of FAQs to help us since its down to a skeletal level of staffing. Corp Fin has now updated its FAQs to revise #4 and 5 – and to add #6 and 9.
New #6 deals with removing a delaying amendment when you have unresolved staff comments on your filing (the answer is “yes, but you’re still responsible for the completeness & accuracy of the disclosure”) – #9 deals with the Staff considering a request for emergency relief under Rule 3-13 of Reg S-X (the answer is “not likely unless there needs to be protection of property”). Kudos to the Staff for numbering the FAQs!
Removing the Delaying Amendment: Need “Magic Words” to Start the Clock
Broc blogged last week about some examples of companies that removed the delaying amendment – and noted the lack of uniformity in the language. If you’re thinking of doing this, be sure to check out the update to FAQ #5. As this excerpt notes, merely deleting the delaying amendment won’t get the 20 day clock running:
Simply omitting the delaying amendment from an amendment will not begin the 20 day period. A company that intends to remove the delaying amendment must amend its registration statement to include the following language provided by Rule 473(b) – “This registration statement shall hereafter become effective in accordance with the provisions of section 8(a) of the Securities Act of 1933.” It must also amend to include all information required by the form, including the price of the securities it will sell.
FAQ #5 also highlights the fact that Rule 430A isn’t available in the absence of a delaying amendment – it can only be used for registration statements that are declared effective by the Commission or the Staff.
Privacy: California’s Consumer Privacy Act is Coming – And So Are Class Actions
If you’re feeling lucky that your company has largely dodged the GDPR bullet, I’ve got some bad news for you – California’s recently enacted consumer privacy legislation goes into effect on January 1, 2020. The statute provides substantial new protections to California consumers, and according to this DLA Piper memo, its private right of action provisions ensure that class actions will be coming:
The statute provides a private right of action under certain circumstances to California consumers whose “nonencrypted and nonredacted” personal information is “subject to an unauthorized access and exfiltration, theft, or disclosure as a result of the business’s violation of the duty to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the information . . . .” Cal. Civ. Code § 1798.150.
Significantly, the Act provides such consumers with the ability to obtain relief in the form of either actual damages or statutory damages between $100 and $750 per violation, whichever is greater. In setting the statutory damages amount, courts are instructed to consider, among other factors, “the nature, seriousness . . . and persistence of the misconduct,” number of violations, “the length of time over which the misconduct occurred,” willfulness, and ability to pay. In addition to damages, the Act provides for injunctive or declaratory relief and “any other relief the court deems proper.”
The memo also notes the possibility of class actions under the state’s unfair competition statute as a result of violations of the CCPA. Because of the significant class action risks, companies should begin to prepare for the statute now – and the memo offers up some specific suggestions along those lines.
– John Jenkins