TheCorporateCounsel.net

In my spare time, I have been working with the SEC Historical Society to create a gallery addressing the SEC’s regulation of corporate disclosure that will be located in the Society’s virtual museum and archive. As part of this effort, I recently had the good fortune to moderate a program covering the evolution of materiality, featuring an all-star panel of experts that included: Trevor Barton from Deloitte; Meredith Cross from WilmerHale; Dan Goelzer, former SEC General Counsel and PCAOB board member; Rich Levine from Whistleblower Advocates PLLC; and Joan McKown from Jones Day.

The panel covered a wide range of questions, including:

1. How does the concept of materiality continue to evolve and what is the role of the SEC in that evolution?
2. What are the considerations around the application of the “reasonable investor” and “total mix” and “probability/magnitude” standards?
3. What is the importance of materiality in SEC enforcement actions and private securities litigation?
4. How is materiality assessed from a financial statement perspective, including the impact of Staff’s guidance in SAB 99 on the consideration of materiality in financial reporting?
5. How does the concept of “what information is material to a reasonable investor” continue to evolve in areas beyond financial performance and business development, such as climate change, governance, cybersecurity and sustainability matters, and what are the implications?

I have always enjoyed exploring the history of the SEC. In my mind, it is difficult to provide good advice today if you do not understand where the laws, rules and standards have come from, and that is why it is so important for me to try to chronicle some of these key developments.

– Dave Lynn