Broc Romanek is Editor of CorporateAffairs.tv, TheCorporateCounsel.net, CompensationStandards.com & DealLawyers.com. He also serves as Editor for these print newsletters: Deal Lawyers; Compensation Standards & the Corporate Governance Advisor. He is Commissioner of TheCorporateCounsel.net's "Blue Justice League" & curator of its "Deal Cube Museum."
Wow, I was shocked to check the “SEC Staff Alumni” group that I created on LinkedIn a while back on a whim – and see that it now has over 900 members. Anyone is free to join. Meanwhile, I created this “Securities & Exchange Commission Memories” group on Facebook about two years ago – it’s a place where you can see old pictures, hear stories and reminisce about old friends who have passed. I believe it’s the only group on Facebook devoted to SEC alumni & staffers.
One of the first members to join my LinkedIn group urged me to use the SEC’s official logo as the group’s logo. I refused as I presume the SEC has trademarked their logo (with the Patent & Trademark Office; or maybe federal agencies don’t even need to bother doing that as it’s presumed to be trademarked) and who knows what other laws would be violated if a logo looked too similar to a federal agency’s. But I do note that rampant use of federal agency logos is happening all over the Web (eg. this Forbes article uses the SEC’s logo)…
Cybersecurity: Boards Aren’t Getting Sufficient Training
In NAVEX Global’s benchmark report about compliance training, you will find that boards aren’t getting enough cybersecurity training including these stats:
– Cybersecurity – 22% train boards, 69% train employees
– Workplace harassment – 12% train boards, 76% train employees
– Conflicts of interest – 33% train boards, 76% train employees
– +40% don’t train boards on anything
– Only 20% train new board members
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Delaware Limits Reach of Its Jurisdiction Over Foreign Corporations
– Companies as Whistleblowers
– ESG: Water Disclosures
– Enforcement: Is the SEC Really Going After Unicorns?
– Cyberliability: Commercial Insurance Policies Might Cover
I was just reading Amy Goodman’s interview on the SEC Historical Society’s site & I found out that Amy had framed a picture of the first Edgar filing ever made back in 1984 – during the “pilot program” phase of Edgar – by the Southern Company. When Amy retired, it was handed down to Melissa Caen – who currently is the corporate secretary of the Southern Company. This first filing was a Form S-8. Richard Childs (still at Southern) and Wayne Boston (retired a few years back) made the filing.
Remember that the SEC embarked on this electronic filing journey well before the birth of browsers & the mainstream use of the Internet. As discussed in Amy’s interview, SEC Chair Shad had to find money in the agency’s budget to get Edgar off the ground as there were members of Congress who didn’t believe in the project of an “electronic library of SEC filings.” There were quite a few others not interested in seeing Edgar succeed – including the financial printers (who didn’t realize they would be making a boatload of Edgarization down the road).
My EDGAR (Passphrase) Nightmare
I’m really loving this blog by NASPP Executive Director Barbara Baksa about her Edgar nightmare. Here’s the intro:
I recently had to update my EDGAR passphrase. I thought this would be a relatively simple process. I’m a smart person and I have a proven success rate in navigating government websites—I know how to use the DMV website to make an appointment, I’ve requested a certified copy of my birth certificate online, I can find a public company’s stock plan on EDGAR—how hard could it be to update my EDGAR password? Turns out, way harder than I expected.
This is a long blog entry, but it’s not my fault. I blame the SEC.
How I Got Into this Mess
I got my EDGAR access codes over a decade ago, back when the SEC first rolled out the system for filing Section 16 forms online. It was so long ago, it was before the SEC required a notarized Form ID or a passphrase. I did not want to go through the hassle of submitting a notarized form to the SEC, so I had a system in place to make sure I didn’t forget to update my EDGAR password, which consisted of a reminder in my Outlook calendar set for about a month before my EDGAR password expired. Once a year, the reminder would pop up and—unlike how I respond to my alarm clock—I would not ignore it or hit snooze. I would immediately update my EDGAR password and set the reminder for the next year.
This system worked fantastically for over a decade, including through a change in employers. And then I got a new laptop with Outlook 13 on it. Outlook 13 had some sort of “known issue” that caused emails to disappear from my inbox. The only way to fix it was to remove Outlook 13 and go back to Outlook 10. In the process, my entire calendar was lost. Completely gone.
After massive hyperventilating and gnashing of the teeth, I was able to recreate most of it, but there were some appointments I forgot—including the reminder about my EDGAR password.
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Ten Tips for Board Engagement in Company Strategy
– Internal Audit Outsourcing: Benchmarking & Guidance
– SEC Filings: Early Detection of Red Flags?
– Cyber Diligence: Rating Service Firms
– Survey: Over 60% of Compliance Officers Meet with Board Quarterly
– How to Mitigate Audit Fee Increases
I’m excited to announce that John Jenkins has joined us – and he will be partnering with me to run our websites, print publications, etc. Although some say that we hired John as a ringer for our hockey team, I can tell you that John knows all. He has been one of my primary resources for tough questions over the years. You’re gonna love him! John has spent 30 years toiling at Calfee Halter in Cleveland as a Partner – and he will continue to serve in that role for them. Ping him at john@thecorporatecounsel.net to say hello…
A Little “Deal Tact” Goes a Long Way
Here’s a sample of John’s handiwork – something that he drummed up for the “DealLawyers.com Blog” a while back:
In my last blog, I talked about some advice given to our firm’s associates during a training session on becoming a seasoned business lawyer conducted by two senior investment bankers from one of our firm’s clients. The first thing they mentioned was the importance of avoiding boorish first drafts. That piece of advice, together with many of the other suggestions they made about things that young lawyers should do or avoid doing, falls under the general heading of the need to be sensitive to the messages that your actions are going to send to the other people involved in the transaction.
You might think that a lot of this stuff would be intuitive, but it doesn’t appear to be that way for lawyers. For instance, one of the specific “don’ts” that our investment banker friends mentioned in their presentation was the seemingly obvious point of not making critical remarks to the client concerning its other advisors. Apparently, that’s something that some lawyers are notorious for doing. Unless your client’s retained Patrick Bateman as its financial advisor, that’s a very bad idea, if for no other reason than what goes around, comes around. Besides, while “plays well with other children” may not be a line item that appears on most law firm or corporate law department evaluation forms, it’s on most clients’ short list of the qualities that they look for in a deal lawyer.
Deal making by its very nature is a group effort, and the ability to work effectively in a transactional setting requires a skill that might be called “deal tact.” The best deal lawyers use this skill not only in their dealings with their own client and fellow advisors, but also in their dealings with those on the other side of the table, and particularly the lawyers who are representing the other side in the deal.
From time to time, I have had a chance to work on transactions with lawyers who have national reputations as M&A advisors. Although their styles differ markedly, deal tact is one quality that they have all shared in common. Let me give you an example of this that I’ve seen many times. During the early stages of the deal, draft documents are often hacked-up pretty significantly by the lawyers receiving them because, well, they sometimes just don’t make any sense. Incompetence or inexperience may be part of the reason for this, but far more frequently, it’s attributable at least in part to an unreasonable time schedule that requires somebody to generate a document before they know what the deal is about.
When this happens, there’s usually a younger lawyer on the deal team who is chomping at the bit to highlight each and every flaw in the document during the course of a negotiation session. This is understandable, since that kid pulled at least one all-nighter finding and correcting every last one of them. The superstar generally doesn’t let this happen. Instead, that lawyer typically will focus his or her attention on the major deal issues while clients are present. When the meeting is about to break-up, the mark-up will be passed on to the other side’s lawyers, usually accompanied by a statement noting that the mark-up includes some “lawyer comments” that aren’t worth wasting the group’s time on. That may be followed up with some sidebar discussions, but the important thing is that nobody loses face in front of their clients.
Now if you know anything about your fellow M&A practitioners, you know that it isn’t a saintly sense of humility that motivates this kind of conduct. Instead, it’s an appreciation for the fact that if you put somebody on the defensive, they’re going to do a couple of things. First, they’re going to try to defend themselves by quibbling with every point you make. Second, they will look for opportunities to stick it to you– and chances are pretty good that they’ll find at least one during the course of the transaction. Neither of these things moves the ball forward.
I’m not suggesting that deal lawyers should always act like Clark Kent — possessing a little deal tact doesn’t mean you shouldn’t play hard ball when appropriate. I’m just saying that Conan the Barbarian shouldn’t be our role model either. I mean, if you really believe that what is best in life is “to crush your enemies, to see them driven before you, and to hear the lamentation of their women,” you’d probably be much happier as a litigator anyway.
Every deal presents opportunities for a knowledgeable and experienced deal lawyer to grandstand in front of the client or make somebody on the other side look foolish in front of their client. One of the big things that separates the pros from the pretenders is the ability to resist that temptation in order to move the transaction forward.
Here’s a follow-up note from Keir Gumbs of Covington about my blog yesterday illustrating how Corp Fin is not going back to “Square #1”: To clarify how to best interpret the H&R Block no-action letter – the letter was about amending an existing bylaw, not just the adoption of a bylaw:
RESOLVED: Shareholders of H&R Block, Inc (the “Company”) ask the board of directors (the “Board”) to adopt, and present for shareholder approval, revisions to its provisions allowing “Shareholder Nominations Included In The Corporation’s Proxy Materials” and associated bylaws to ensure the following:
1. The number of shareholder-nominated candidates eligible to appear in proxy materials should be one quarter of the directors then serving or two, whichever is greater.
2. Loaned securities should be counted toward the ownership threshold if the nominating shareholder or group represents that it has the legal right to recall those securities for voting purposes, will vote the securities at the annual meeting, and will hold those securities through the date of that meeting.
3. There should be no limitations on the number of shareholders that can aggregate their shares to achieve the required 3% ownership to be an “Eligible Shareholder.”
4. There should be no limitation on the renomination of shareholder nominees based on the number or percentage of votes received in any election
The letters last year were asking companies to adopt bylaws, which gave the companies the ability to argue that they’d implemented the proposal. The Corp Fin Staff picked this up in their response. Note for example the difference in language:
The proposal requests that the board amend its “proxy access” bylaw provisions in the manner specified in the proposal.
We are unable to conclude that H&R Block has met its burden of establishing that it may exclude the proposal under rule 14a-8(i)(10). Based on the information presented, we are unable to conclude that H&R Block’s proxy access bylaw compares favorably with the guidelines of the proposal. Accordingly, we do not believe that H&R Block may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(10).
The use of the word “amend” in the description of the bylaw, the use of the phrase “burden” and “Based on the information presented” tells me that:
1. The Staff viewed this as an amend the bylaw proposal (and not an adopt a bylaw proposal like those that it confronted earlier this year; and
2. The use of the burden language signals that there is an argument that they could have made that would have been successful; the staff rarely uses burden language except to signal that the company didn’t make the right arguments.
Compare that with the language used in the letters where the Staff granted relief earlier this year:
The proposal requests that the board adopt a “proxy access” bylaw with the procedures and criteria set forth in the proposal.
There appears to be some basis for your view that Quest Diagnostics may exclude the proposal under rule 14a-8(i)(10). We note your representation that the board has adopted a proxy access bylaw that addresses the proposal’s essential objective. Accordingly, we will not recommend enforcement action to the Commission if Quest Diagnostics omits the proposal from its proxy materials in reliance on rule 14a-8(i)(10).
Commentary: I’ve been saying since earlier this year that the fight over bylaws was not ended by the letters last year. This proposal – and ones like it – may survive challenge to the extent that they are asking companies to adopt changes to bylaws that have already been adopted.
This will be especially true with respect to what I call “single issue” proposals that focus on one or more specific features of a company’s proxy access bylaw. In those cases, it seems like the Staff will find it hard to say that a bylaw has implemented a proposal where the proposal identifies a provision in that bylaw that is material and asks the company to change that provision.
ISS Survey: 2017 Policy Updates
As noted in this Gibson Dunn blog, ISS has posted its annual policy survey (here’s info about the survey). The deadline is August 29th – and the big topics include:
This blog by Cooley’s Cydney Posner describes the circumstances surrounding this new no-action response given to H&R Block a few weeks ago (also see this blog from Ning Chiu). It involves a proposal from Jim McRitchie asking the company to amend its existing proxy access bylaw provisions – and the company sought to exclude the proposal under Rule 14a-8(i)(10)’s “substantially implemented” basis.
Corp Fin did not allow the exclusion – but that doesn’t necessarily mean the tactic of a company implementing their own version of proxy access to stave off a possible shareholder proposal on the topic is dead. So Corp Fin isn’t back to “Square #1,” as explained in this blog. And here’s the conclusion from Cydney’s blog:
Arguably, depending on your point of view, the practical effect of the staff’s new position may be to repudiate the prior line of 14a-8(i)(10) no-action letters issued commencing in February, even though it is not technically doing so. Whether this position will be repeated or could possibly be anomalous remains to be seen. In any event, given the proponent involved, companies that adopted versions of proxy access that McRitchie et al would view as “proxy access lite” may well be seeing new proposals for revisions to proxy access bylaws.
Audit Report Reform: The PCAOB’s Resource Page
Yesterday, the PCAOB launched this resource page dedicated solely to its re-proposal regarding audit reports. The format is friendly for mobile – but a little difficult to navigate on a laptop as the font is huge and requires much scrolling. Scrolling feels natural on a smart phone; not so much for a laptop…
Conflict Minerals: IPSA Uncertainty Likely to Carry Over to ’17
Here’s the intro from this note from Elm Sustainability Partners:
With the Securities and Exchange Commission’s decision earlier this year to forego an appeal to the US Supreme Court of NAM v. SEC, much uncertainty hangs around the requirement for filers of Form SD and Conflict Minerals Reports (CMRs) to conduct an Independent Private Sector Audit (IPSA) for filing year 2016. We expected the question to be resolved once and for all before the end of CY2016. However, that now appears doubtful.
As of last Friday, a judge had not yet been assigned to the case in the lower court that is to provide the SEC direction. And the SEC’s Flex Agenda published June 6, 2016 does not list the matter as a rule making activity currently planned by the Commission.
So for the time being, it appears the the CY2016 IPSA trigger will be identical to CY2015 – the IPSA is necessary only when an issuer voluntarily chooses to classify a product as “DRC Conflict Free” or “not DRC Conflict Free” after due diligence. It is important to understand that when the Reasonable Country of Origin (RCOI) indicates that there is no reason to believe that tin, tantalum, tungsten or gold in a product did originate – or may have originated – in the Covered Countries, only a Form SD is to be filed and no IPSA is required in such instances.
Here’s a scary piece from Carl Hagberg’s “Shareholder Service Optimizer”:
The SEC’s Enforcement Division has issued wide-ranging subpoenas to the four largest ADR banks – and to many of their top officials, we are told – demanding detailed information going all the way back to 1997, according to our source – the chief whistleblower, who, while wanting to be anonymous for now, knows the ADR business inside and out.
The Treasury Department and the FBI are also heavily involved – investigating the use of ADR programs to launder money on a huge, global scale according to our source, who has provided investigators with a detailed “roadmap” as to exactly how it’s done. The Senate Banking Committee is following this closely too, with one staffer reportedly sending a message to regulators that “We will not be looking for millions in fines and penalties, but billions.”
All four banks have ‘lawyered up’ with four of the country’s biggest and best-known law firms, who are scrambling like mad to reach a settlement and avert disclosures that are likely to rock the banks in a major way. More class action suits will be filed soon, according to our source, revolving around foreign exchange transactions that were systematically rigged in favor of the big-four players – and the big-four ADR banks recently settled massive IRS claims for back taxes on their ill-gotten, and we guess, previously concealed gains – “for pennies on the dollar.”
And oh yes, a book – and a movie – entitled “ADRmageddon” are on the drawing boards as we write this.
For over 25 years we have been asking why there are ADRs anymore – since issuers of securities are perfectly capable of issuing ‘ordinary shares’ – and easily making any and all payouts in currency of the owners’ choosing, based on current, and well-publicized exchange rates.
The answer is a simple one: ADR banks have been charging excessive fees for buying, selling and ‘lending’ ADRs, short-changing owners on the exchange rates and ‘nicking’ the proceeds a second and sometimes a third time with fees and surcharges…because they make tons of money this way and have been blithely getting away with it….until now.
We think the upcoming revelations may well turn out to be an Armageddon for ADRs…and may do serious harm to the already tarnished reputations of several major banks – which we used to expect would deal with clients fairly, and honestly…so do stay tuned.
Our August Eminders is Posted!
We have posted the August issue of our complimentary monthly email newsletter. Sign up today to receive it by simply inputting your email address!
Below is some news from Shas Das of Hunton & Williams. Shas recently joined Hunton from the PCAOB, most recently serving as an Associate Director in the PCAOB’s Office of International Affairs, where he negotiated bilateral agreements providing for cross-border inspections with Germany, Denmark, Greece. He also served as the PCAOB’s chief liaison with the Chinese regulatory authorities for five years. Recently, Shas was reading through some PCAOB releases and noticed some fine print in the EU’s recent adequacy directive that suggests the EU would like to move away from joint inspections with the PCAOB in favor of US authorities recognizing the work of their European counterparts:
Two weeks ago, the PCAOB issued a “Staff Inspection Brief” outlining the scope, focus, and objectives of its ongoing 2016 inspections of auditors of public companies. While the inspection brief addressed topics ranging from recurring or common audit deficiencies found during previous inspections cycles (including auditing internal control over financial reporting, assessing and responding to risks of material misstatement, auditing accounting estimates), to cybersecurity risks, the document conspicuously avoids any reference to the fact that on that very same day, the European Commission renewed the PCAOB’s adequacy decision for an additional six years (until 2022), thereby allowing the PCAOB continued access to the audit work papers of its EU counterparts, but notably, unlike previous EU Directives, it provides that joint inspections will only be conducted in “exceptional circumstances.”
With limited exception, the PCAOB conducts its inspections of registered audit firms based overseas jointly with the home country regulator; in other words, the PCAOB will obtain access to audit work papers and relevant audit firm personnel in coordination with its EU counterparts – and, in most if not all cases, will share its inspections findings with its EU audit regulator counterpart. Typically, such inspections are facilitated through the execution of Statement of Protocols with the EU audit oversight authority in the jurisdiction where the audited firm registered with the PCAOB is located – these SOPs govern how the inspection will be conducted and generally reflect the product of extensive negotiations, balancing the importance of the PCAOB’s need to conduct its inspections in a manner that enables it to achieve its audit oversight objectives pursuant to Section 104 of Sarbanes-Oxley with the local law of the EU member state. The last such agreement negotiated by the PCAOB with any foreign regulator (EU or otherwise) was executed in September 2015 (with Luxembourg).
Before any EU member state or audit authority can transfer audit work papers to a foreign authority, under applicable EU law, the foreign authority must be deemed “adequate.” The term “adequacy” refers to the ability of a third country authority to fulfill the requirements set out in the EU’s Statutory Audit Directive (2006/43/EC) and, in particular, its capacity to enter into reciprocal working arrangements with the EU Member States with regard to the exchange of audit working papers or other relevant documents between competent authorities. This also covers the preservation of the confidentiality of any such documents that authorities from third countries may receive from EU Member States.
Notably, the EU’s recently issued adequacy decision that relates to the PCAOB provides for the following:
“(17) The ultimate objective of cooperation on audit oversight between Member States’ competent authorities and the competent authorities of the United States is to reach mutual reliance on each other’s oversight systems. In that way, transfers of audit working papers or other documents held by statutory auditors or audit firms and of inspection or investigation reports should become the exception. Mutual reliance would be based on the equivalence of auditor oversight systems of the Union and of the United States [emphasis added].
(18) The competent authorities of the United States intend to further evaluate the auditor oversight systems in the Member States before deciding to fully rely on the oversight performed by their competent authorities. Therefore, the mechanism of cooperation between the competent authorities of the Member States and the competent authorities of the United States should be reviewed to assess the progress made towards reaching mutual reliance on each other’s oversight systems. For that reason, this Decision should be applicable for a limited period of time.
(19) Notwithstanding the time limitation, the Commission will monitor developments in the supervisory and regulatory cooperation on a regular basis. This Decision will be reviewed as appropriate in light of the supervisory and regulatory changes in the Union and in the United States, taking into account available sources of relevant information. That review may lead to the withdrawal of the declaration of adequacy [emphasis added].”
The EU has previously adopted decisions recognizing the adequacy of the auditor oversight systems in Canada, Japan, Switzerland, and most recently Brazil, the Dubai International Financial Centre, Guernsey, Indonesia, the Isle of Man, Jersey, Malaysia, South Africa, South Korea, Taiwan, and Thailand. In addition to the aforementioned countries, the EU has declared auditor public oversight systems in the following jurisdictions to be “equivalent” to the EU Member States’ auditor public oversight systems, thus allowing EU members states to exempt the auditors and audit firms located in these jurisdictions from the requirements to be registered and subject to EU oversight: Australia, Canada, China, Croatia, Japan, Singapore, South Africa, South Korea and Switzerland. Though the US audit oversight system has also been deemed equivalent with the EU audit oversight system, this decision has been time-limited due to the fact that the US has not, in the past, fully supported the goal of reaching mutual, full reliance. Nevertheless, in keeping with the latest extension of the adequacy decision for six years, it now appears that the PCAOB (with the SEC’s concurrence) has determined to proceed along a path of full, mutual reliance that may result in very few joint inspections conducted by the PCAOB in the EU during the coming years – raising questions about the continued efficacy of the PCAOB’s international inspections program.
The PCAOB has bilateral cooperation agreements with 22 foreign audit regulators, of which 13 are located in Europe (including Norway and Switzerland). The ramifications of the EU’s renewal of the adequacy decision, and more specifically the severe limitations placed on the PCAOB’s access to audit work papers and ability to conduct joint inspections, could have far reaching effects and negatively impact the PCAOB’s long-standing negotiations with the Chinese regulators regarding access to sensitive audit work papers of Chinese companies listed in the U.S.
It will be interesting to see how the Chinese regulators and audit firms view the new terms of engagement between the PCAOB and the EU on cross-border inspections, particularly when taking into account references in the EU’s adequacy decision that “cooperation should always take place under the conditions set out in Article 47(2) of Directive 2006/43/EC and in this Decision, in particular as regards the need to respect sovereignty, confidentiality and reciprocity [see paragraph 11 of the EU’s Adequacy Decision].”
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Directors Survey: Internal Audit Makes The Grade
– Compliance: Increased Regulation Cited as #1 Challenge
– Corporate Human Rights Benchmark Launched
– IT/Cyber Oversight: Guidance for Directors
– Standalone Board Risk Committee Considerations
A few days ago, as noted in this blog, Corp Fin revised Regulation S-K CDI 140.02 – and withdrew Reg S-K CDI 240.04. Revised CDI 140.02 now states:
Question: If a selling security holder is not a natural person, how does a registrant satisfy the obligation in Item 507 of Regulation S-K to disclose the nature of any position, office, or other material relationship that the selling security holder has had within the past three years with the registrant or any of its predecessors or affiliates?
Answer: In addition to disclosing any material relationships between the registrant and the selling security holder entity, the registrant must disclose the Item 507 information about any persons (entities or natural persons) who have control over the selling entity and who have had a material relationship with the registrant or any of its predecessors or affiliates within the past three years. In such case, the registrant must identify each such person and describe the nature of any relationships. [July 26, 2016]
As part of my “Big Legal Minds” podcast series – check out this 11-minute podcast, during which Shannon Kinney of ConocoPhillips describes how to best disclose a compensation committee’s decision to exercise negative discretion for an annual incentive plan, including:
1. How has the company improved the format & usability of the proxy in recent years?
2. Can you give us the background of how the compensation committee applied negative discretion for its annual incentive plan?
3. How did the company decide to describe its decision to apply negative discretion (pages 49-52 of the 2016 proxy)?
Remember that these podcasts are also available on iTunes or Google Play (use the “My Podcasts” app on your iPhone and search for “Big Legal Minds”; you can subscribe to the feed so that any new podcast automatically downloads…
Regulation A+: Secondary Market
As noted in this blog by Steve Quinlivan, the SEC has posted this presentation about the secondary market for Regulation A+ offerings – and in this commentary, SEC Chair White noted there have been over 60 Regulation Crowdfunding offerings so far with a total of $4.4 million in funds committed – and 12 funding portals registered with the SEC and become members of FINRA.
With all the proxy statements now filed for this proxy season, we will have to continue to wait for our first “Schedule 14N.” You will recall that a Schedule 14N must be filed by any shareholder – from outside the company – who nominates a director using the proxy access process. With over 240 companies having adopted proxy access (all of them listed in the appendix of this memo), it could be soon that we see one since it’s been over 5 years from when Schedule 14N was “born.”
Poll: When Will We See Our 1st “Schedule 14N”?
But I’ll let you make your own guess for when we see that first one in this anonymous poll:
As the transcript for our recent webcast – “Non-GAAP Disclosures: The SEC Speaks!” – continues to be wildly popular since it featured Corp Fin’s Chief Accountant Mark Kronforst & heavyweights Meredith Cross and Dave Lynn, we continue to post a ton of memos about Corp Fin’s new CDIs – as well as this new non-GAAP tool for audit committees.
As part of its focus on non-GAAP measures, Corp Fin has questioned whether companies (& their audit committees) have implemented appropriate controls regarding the disclosure of such measures. This memo discusses the types of controls that could be established and provides high-level examples of control issues and related responses for consideration in connection with non-GAAP measures.
General Motors recently tweeted earnings results including adjusted results. And here’s a few MarketWatch pieces entitled:
Non-GAAP Measures: A Review of Old Corp Fin Comments
This Audit Analytics blog analyzes Corp Fin comments in the non-GAAP area from a period – 2014-2015 – before the new CDIs were issued. These comments don’t necessarily reflect what Corp Fin is focusing on now given the new guidance…
More on our “Proxy Season Blog”
We continue to post new items regularly on our “Proxy Season Blog” for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Japan: First Signs of Activism
– Investor Policies: Director Age & Tenure Limits
– NYC Pension Funds: Proxy Voting Guidelines Updated
– State Street Global Advisors: How It Voted
– Who Decides Whether a Shareholder Has Complied With An Advance Notice Bylaw?
