TheCorporateCounsel.net

In a recent blog, Gunster’s Bob Lamm argues that whatever concerns some of us may have about Donald Trump’s return to the White House, the changes at the SEC will likely make the agency easier to work with for public companies and their legal counsel:

Let’s face it – the SEC under Chair Gary Gensler has been difficult. I will try to take the high road by simply saying that under his leadership the SEC has been dismissive if not downright scornful of the issuer community when it comes to both rulemaking and enforcement.

There are many examples on the rulemaking side, but my favorite (so to speak) was the decision to require quarterly disclosure of corporate stock buybacks on each day during the preceding quarter. Perhaps we were supposed to be grateful that the original proposal – to file reports of each day’s buyback activity – was dropped in favor of the quarterly disclosure requirement. However, from my perspective there was no rational purpose to that disclosure, with the possible exception of giving academics the ability to conjure up correlations between buyback activity and other “nefarious” activities by corporations and their executives and directors. Fortunately, the final rules were thrown out by the federal courts.

Bob’s aside about academics being the only beneficiaries of the SEC’s buyback rules struck a chord with me. It seems to me that SEC rulemaking over the past several years has been unduly deferential to input from academics. To me, the best example of this is the Rule 10b5-1 amendments, which I’ve previously argued mostly represent a solution in search of a problem.

In contrast to the SEC’s deference to academics, Bob says that the agency has given public companies the cold shoulder. For example, he notes the SEC’s refusal to consider an “Issuer Advisory Committee” akin to its Investor Advisory Committee), as well as its reversal of the proxy adviser regulations adopted during the first Trump administration. He also points to the agency’s ham-fisted approach to the adoption of the climate disclosure rule, and its endless pursuit of disclosure controls & procedures enforcement cases against public companies.

Bob’s hope that Trump 2.0 will lead to better relations between public companies and their principal regulator is premised on his view that things weren’t so bad for public companies at the SEC the last time around. That’s probably true, but he acknowledges that the bottom line is that there are no guarantees, and like everything else about Trump 2.0, we’ll just have to wait and see what the next few years bring.

– John Jenkins