TheCorporateCounsel.net

May 21, 2019

SEC’s Upcoming Roundtable: Short-/Long-Termism

Yesterday, SEC Chair Clayton issued this statement indicating that a roundtable on short- and long-term management of companies will be forthcoming. The date & agenda are not yet known. This follows the SEC’s “request for comment” in December about the nature, content and timing of earnings releases & quarterly reports…

By the way, Chair Clayton will also host a roundtable of former SEC Chairs during the SEC’s 85th anniversary “program & dinner” coming up on June 3rd. This kind of roundtable normally would be fascinating, but I think a lot of alumni are going to that thing to catch up with each other & won’t be too interested in programming. But what do I know…

The SEC is Questioned Over Lag Bringing Volkswagen Case

Here’s the intro from this WSJ article:

A federal judge sharply questioned why securities regulators took so long to sue Volkswagen AG over its bond offerings, years after other government agencies resolved litigation over the auto maker’s diesel-cheating scandal. U.S. District Judge Charles Breyer on Friday suggested the SEC’s March 2019 lawsuit makes it look like a “carrion hawk that simply descends when everything is all over and sees what it can get from the defendant,” according to a transcript provided to The Wall Street Journal.

The judge also ordered the SEC to provide a timeline on when it learned of each fact behind its case — and explain its legal reasoning behind waiting to file the suit—before he would let the case move forward.

Collecting Fines: The Challenges the SEC Faces

Here’s the intro from this WSJ article:

Wall Street watchdogs often tout the fines they levy on alleged wrongdoers. Yet much of that money is never collected. The SEC over the five years ending in 2018 took in 55% of the $20 billion in enforcement fines set through settlements or court judgments, according to agency statistics. During the prior five years, from 2009 through 2013, the SEC collected on 60% of $14.6 billion.

And in 2018, the commission collected just 28% of almost $4 billion. That rate—the lowest in a decade—was due in part to an unusual $1.7 billion settlement with the Brazilian oil company Petrobras that may never require payment to the SEC. The SEC has struggled for years to get defendants to pay more of their fines, although some are almost certain to avoid payment forever. That includes people who went to prison on related criminal charges, or people behind Ponzi schemes who spent the funds they took from defrauded investors.

Meanwhile, this study shows that the SEC’s enforcement actions against companies remain at near-record levels despite the government shutdown…

Broc Romanek