As I mentioned in the blog a few times this week, the fact that we are transitioning from carefree summer days to back-to-school time is weighing heavily on my mind, because in about 10 days I am going to find myself back in a classroom at Georgetown Law co-teaching a course about the exemptions from registration in the Securities Act of 1933. For reasons that I cannot really explain, I always get very nervous about speaking in front of students in the classroom, even though I am very much at ease speaking to a large group of professionals at our October Conferences or at other securities regulation programs. This nervousness prompts me to over-prepare for class, even though I could probably teach the course in my sleep at this point. As part of that preparation, I am always looking for current developments that can convey to the students the state of the capital markets and the ongoing debate about how best to facilitate capital-raising. Fortunately, there has been no shortage of current events to talk about concerning capital-raising and exempt offerings over the past five years!
For example, last month, the SEC’s Office of the Advocate for Small Business Capital Formation hosted policy roundtables on reexamining the IPO on-ramp and reassessing the framework for small public companies. During these roundtables, the panelists discussed how to improve the IPO process to encourage companies to go public, as well as potential changes that would encourage more companies to stay public. The video and transcript for the panel “IPO Policy Roundtable: Reexamining the IPO On-Ramp” and the video and transcript for the panel “Small Cap Policy Roundtable: Reassessing the Framework for Small Public Companies” are now available on the SEC’s website, so check them out today.
On Wednesday, the U.S. District Court for the Central District of California denied a motion for preliminary injunction seeking to halt enforcement of California’s SB 253 (the Climate Corporate Data Accountability Act) and SB 261 (the Climate-Related Financial Risk Act) on First Amendment grounds. As this Fenwick alert notes:
With respect to SB 253, the district court found that plaintiffs did not show a likelihood of success on the merits based on California’s dual interests in providing investors with reliable information on which to make investment decisions and in reducing emissions (while acknowledging that California’s interest in providing reliable information to investors may not be justified to the extent the law compels disclosure form companies that have no California investors).
With respect to SB 261, the district court found that California made a sufficient showing as to benefits of investors’ desire for the specific disclosures required by SB 261 to achieve the legislature’s objective in reliable information that enables investors to make informed judgments about the impact of climate-related risks on their economic choices.
The district court also found that the plaintiffs had not shown irreparable harm (due to their failure to show how the climate laws violate the First Amendment) and that “the balance of equities favors denial of plaintiffs’ motion,” primarily because “enjoining SB 253 and 261 would delay the State from advancing the public interests for which it adopted the laws.”
So, for now, the litigation will continue as the deadlines for reporting under the climate laws draw closer.
SB 261 contemplates reporting as of January 1, 2026, while the California Air Resources Board (CARB) is still working on regulations that will establish when 2026 reports are due under SB 253.
The latest issue of The Corporate Counsel newsletter has been sent to the printer. It is also available now online to members of TheCorporateCounsel.net who subscribe to the electronic format. The issue includes the following articles:
– Noisy Exits: Navigating Director Disagreement Resignations
– Offerings During Blackout Periods: Disclosure Considerations for “Flash Numbers”
Please email info@ccrcorp.com to or call 1.800.737.1271 to subscribe to this essential resource.
The SEC announced yesterday that it launched a new statistics and data visualization page that “includes statistics and graphics on key elements of the capital markets, such as initial public offerings, exempt offerings, corporate bond offerings, reporting issuers, municipal advisors, transfer agents, and household participation in the capital markets.” The announcement notes:
The webpage provides statistics presented in time series charts to show market trends, pie charts to show distribution across different categories, as well as heat maps to show geographic distributions. The visuals are interactive, allowing the public to explore the information in which they are interested.
“I have long believed that greater transparency is essential to serving the public effectively, and this new webpage is another step toward making our work more accessible,” said SEC Chairman Paul S. Atkins. “This new statistics page provides an unprecedented window into the capital markets. I am pleased that the SEC has launched this effort to put vital information into the hands of investors, market participants, and the public.”
“This page offers users the ability to explore information about the market and follow how that information has changed over time,” said Dr. Robert Fisher, Acting Chief Economist and Director of the Division of Economic and Risk Analysis. “These data will enable a better understanding of what is happening in the markets.”
The new webpage includes:
– Data Visualizations: interactive graphics based on statistics
– Statistics Table: fundamental statistics regularly updated with the most recently available data
– Statistics Guide: description, calculation method, and data source for each metric
– Statistics Download: all available statistics in the table and data visualizations
– Related Materials: research and reports, regulatory background, investor bulletins, or additional resources
The new webpage can be found on the SEC’s website under Data & Research.
I encourage you to take a spin through this new site, the information is interesting. I suspect that I might share some of this information with my students this Fall, because it provides some interesting context regarding the utilization of various securities offering exemptions.
We are almost two months away from 2025 Proxy Disclosure Conference, which is taking place at The Virgin Hotels in Las Vegas and by webcast on Tuesday, October 21. I look forward to gathering with the other “SEC All-Stars” for the panel “The SEC All-Stars: Proxy Season Insights,” which the agenda notes will take place from 8:50 – 9:50 a.m. local time. I have been putting pen to paper to prepare what I will talk about and here is a sneak peek:
– The SEC’s new priorities under the leadership of Chairman Paul Atkins;
– The impact of deregulatory Executive Orders on SEC rulemaking;
– The status of the climate disclosure litigation;
– Key SEC actions regarding shareholder proposals and shareholder engagement;
– The future of cybersecurity disclosure;
– The SEC’s focus on executive compensation disclosure;
– Regulatory priorities for the capital markets; and
– The evolution of crypto asset regulation.
My remarks will only scratch the surface on these topics, and then our panels throughout the day and during the 22nd Annual Executive Compensation Conference on the following day will delve into the details.
You will not want to miss this year’s Proxy Disclosure Conference! You can sign up online or reach out to our team to register by emailing info@ccrcorp.com or calling 1.800.737.1271.
We have assembled a great group of speakers for the 22nd Annual Executive Compensation Conference, which is taking place at The Virgin Hotels in Las Vegas and by webcast on Wednesday, October 22. Right after our morning session when we will hear from astronaut José Hernández, I will be joining my fellow SEC All-Stars for the panel “The SEC All-Stars: Executive Pay Nuggets.” I am planning to tackle a topic that is often on our minds, and that is a volatility playbook for executive compensation. Some of the topics I plan to cover include:
– Rule 10b5-1 plan practices in volatile markets;
– Evolving equity grant practices;
– Option repricing;
– Hedging and pledging issues; and
– Managing stock ownership requirements
You will not want to miss the 22nd Annual Executive Compensation Conference! Also note that this year, we mark the very special occasion of CCRCorp’s 50th Anniversary with a Welcome Party + CCRcorp’s 50th Anniversary Celebration, which will take place from 4:00 pm to 7:00 pm PT on October 20. As always, you can sign up online or reach out to our team to register by emailing info@ccrcorp.com or calling 1.800.737.1271.
It was all the way back in February when I blogged about the Trump Administration’s first round of tariffs, an opening salvo of three executive orders directing the United States to impose new tariffs on imports from Canada, Mexico, and China. Then came “Liberation Day,” when the Administration announced sweeping new tariffs that were more broadly applicable than the initial round of tariffs, which should not be confused with the “Liberation Day” for Washington, DC that was announced earlier this week. In the wake of these global trade actions, we have experienced what one might euphemistically describe as a “dynamic” trade environment, with the completion of some new trade deals, escalating tariffs on some trading partners, retaliatory tariffs and constantly shifting deadlines. It has been quite a wild ride, making it difficult to maintain one’s Zen amidst the tumult.
As an outside advisor, this dynamic global trade policy has made it difficult to understand what tariffs apply and how they might impact a company’s business. Thankfully, a cottage industry has grown up around tracking the Trump Administration’s tariffs, which is certainly a Herculean task. Here are some of the free tracking efforts that I have found useful:
– The Global Business Alliance, which serves as an advocacy resource for international companies in the United States, maintains the GBA Tariff Tracker, which shows enacted, retaliatory, in-progress and threatened tariffs by country/country group and by sector.
– The Atlantic Council, which is a nonpartisan organization promoting constructive leadership and engagement in international affairs, maintains the Trump Tariff Tracker, which includes a nifty interactive map, a tariff calendar and a description of all of the legal authorities used by the Trump Administration to impose tariffs.
– The Trade War Tracker is a project of Mike Waugh, who is an Economist and Monetary Advisor at the Federal Reserve Bank of Minneapolis, and it provides some handy bar charts and a useful timeline.
There are no doubt many other useful tariff trackers out there, so please drop me a line if you have come across one that you like. I hope that these trackers prove useful to you on your tariff journey, and remember: “The only Zen you can find on the tops of mountains is the Zen you bring up there.”
The paper, which KPMG describes as “a briefing prepared for audit committee members,” includes summaries of key areas of financial reporting that tariffs may affect and questions audit committees may want to ask related to each area. In KPMG’s view, the current geopolitical, macro-economic, and risk landscape — including tariffs uncertainty — is a top audit committee priority. KPMG’s publication provides a comprehensive overview of the issues audit committees may need to grapple with in the changing tariff environment, and the suggested questions would be a good starting point for exploring these issues with management.
We are of course keeping track of all of the latest tariff developments here at TheCorporateCounsel.net, and you can find coverage of these developments in our “Trump Administration Tariffs” Practice Area. This Practice Area includes:
If you do not have access to the Practice Areas and all of the other practical guidance that is available here on TheCorporateCounsel.net, I encourage you to email info@ccrcorp.com to sign up today, or sign up online.
The WSJ noted in an article this week that U.S. companies are repurchasing their own shares at a record pace, with stock buybacks expected to total over $1.1 trillion in 2025, which would mark an all-time high. The article notes that the pace of buybacks is led by financial institutions and technology companies, with the 20 largest companies accounting for almost half of repurchases.
What we do not hear now amidst this latest buyback frenzy is the steady drumbeat of criticism of stock repurchases from regulators and legislators. Over the course of the past several years, corporate share repurchase activity has gotten a “bad rap” from a wide range of sources, including the SEC, the media, legislators, academics and some investors and analysts. Much of their focus has been on the use of share repurchases to accomplish short-term objectives over long term investments, managing reported per-share earnings metrics, and enriching insiders who sell their stock at the rising prices resulting from the repurchase activity. We saw a significant amount of criticism of corporate share repurchases during the volatile markets of the COVID-19 pandemic and in the uncertain economic and market environment that followed the pandemic. At the time, Congress enacted provisions of the CARES Act that prohibited companies from conducting share repurchases if they received emergency loans from the government and a 1% excise tax on stock buybacks by publicly traded corporations.
It is hard to believe now that just a little over two years ago, the SEC adopted amendments to the share repurchase disclosure requirements that would have required companies to disclose detailed daily quantitative repurchase data at the end of every quarter (rather than on a daily basis as proposed) in an exhibit to their periodic report on Form 10-Q and Form 10-K. In a blog from back then, I tried to get to the “why” behind these rule changes, noting that the amendments reflected a mistrust of share repurchase activity even though the SEC’s own adopting release for the rules noted:
Existing studies, including a review by Commission staff in 2020, have considered the rationales and effects of repurchases. As our staff concluded, repurchases are often employed in a manner that may be aligned with shareholder value maximization. Together with dividends, repurchases provide an avenue for returning capital to investors, which may be efficient if the issuer has cash it cannot efficiently deploy. Such returns of capital may also send signals to investors that managers are operating the issuer efficiently rather than retaining excess cash for potentially suboptimal use.
The SEC’s repurchase rulemaking was doomed from the start, however, and in December 2023, the Fifth Circuit Court of Appeals vacated the SEC’s rule amendments. In March 2024, the SEC adopted technical amendments that restored the share repurchase disclosure rules back to their pre-2023 quarterly disclosure format. The SEC under former Chair Gary Gensler’s leadership did not seek to resurrect the share repurchase rulemaking following the defeat in the courts.
While today’s relative calm in the war against share repurchases allows companies to proceed with their share repurchase activity with fewer distractions, it is always important to consider all of the corporate, securities and governance considerations that go into developing, approving, announcing and conducting a share repurchase program. Be sure to check out all of the great resources that we have available in our “Share Repurchases” Practice Area.
