In mid-December, the SEC’s Office of the Investor Advocate delivered its Report on Activities for the Fiscal Year 2025 to Congress. As highlighted in the announcement, the report provides an update on the office’s investor research activities, discusses the office’s engagements with investors, and describes its ongoing advocacy efforts.
I was interested to see this tidbit with data on accredited investors in the portion addressing the efforts of the Office of Investor Research:
We find that 12.6% of individuals in the U.S. population qualify as accredited investors. Individuals primarily qualify based on their reported net worth (capturing 9.7% of the population), followed by personal income (capturing 2.8% of the population) and household income (capturing 2.8% of the population). Least common is qualifying based on specialized expertise (capturing 1.7% of the population). The majority of accredited investors (75%) satisfy only a single criterion, while the remaining 25% satisfy two or more.
4.3% of those who qualify report owning private market securities described in the question as “private funds or offerings” and further specifying that these types of assets typically require investors to meet certain criteria.
That last statistic surprised me, so I looked up the working paper from June 2025 referred to in the report. I was even more surprised to see the data on non-accredited investor participation — I would have expected the gap in private market participation between accredited and non-accredited investors to be much wider.
Overall, 1.3% of respondents reported owning private market securities through ownership of interests in private funds or securities acquired in a private offering. Respondents who meet the accredited investor qualifications are more likely to report owning private market securities (4.3%) than non-accredited investors (1.1%). About one percent of those who did not qualify as an accredited investor report owning private market securities (Table 6).
The report gives words of caution, though.
We next examined how accredited investor qualification aligned with ownership of different types of financial assets. Respondents were asked to report which investment types they owned, using a list of different investment categories . . . This question included an option for private market securities described in the question as “private funds or offerings,” and further specifying that investing in these types of assets typically require investors to meet certain criteria . . . it does not perfectly align with the regulatory definitions. However, the question was worded to allow people to answer even when they unsure of which category their investments fall into . . .
As we were unaware of prior survey questions eliciting private market securities ownership, we randomly assigned respondents to report ownership in two ways. The first was “‘Private fund’ or ‘private offering,’ which typically requires certain income, wealth, or knowledge levels to participate.” The second was “‘Private fund’ or ‘private offering,’ which typically requires you to be an ‘accredited investor.’” Ultimately, we did not find any statistically significant differences in reported levels of ownership between these two statements, so we combined them for aggregated analysis . . .
Certain nonaccredited investors with knowledge or experience in financial and business matters may participate in Rule 506(b) private offerings, meaning that ownership may be possible. [FN 19: In addition, non-accredited investors may purchase securities in other securities offerings that are exempt from the registration requirements of the Securities Act of 1933. See, e.g., Rule 504 of Regulation D, Regulation A, and Regulation Crowdfunding.] Alternatively, such affirmative responses could reflect measurement error, including uncertainty by respondents over what constitutes a “private fund or offering,” or individuals who previously purchased private market securities no longer qualifying as an accredited investor after, for example, income loss. With cross-sectional data, we cannot determine the reasons for this mismatch.
Commissioner Caroline Crenshaw’s extended term ended over the weekend, on January 3rd. Commissioner Crenshaw has dedicated over a decade of her career to the agency. On Friday, Chairman Atkins and Commissioners Peirce and Uyeda issued a statement on her departure, thanking her for her service.
Over those years, she has been a steadfast advocate for the agency’s mission – demonstrating clarity of purpose and generosity of spirit. Commissioner Crenshaw has listened carefully, engaged substantively, and approached every day with the purpose of safeguarding investors and strengthening our markets. Those qualities are hardly surprising when you consider Commissioner Crenshaw’s broader record of service beyond the agency. As a major in the U.S. Army Reserve JAG Corps, she brings to her work a spirit of duty and a sense of discipline that reflects the very best of what this country asks of those who serve it.
Foley & Lardner’s Patrick Daugherty recently shared his article “10 FAQ About Crypto for Corporate Directors” with us. This resource covers a lot of the basics about digital assets and serves as a good starting point for helping you to educate private and public company directors about crypto. This excerpt addresses the differences between the traditional financial system and decentralized finance typically associated with crypto assets:
Traditional finance (sometimes called “TradFi”) differs from decentralized finance (“DeFi”) with respect to control. TradFi is controlled by banks and governments. DeFi is controlled by code. US dollar deposits, stocks and bonds are traditionally custodied in and by banks, broker-dealers and clearing agencies and are bought, transferred and sold using exchanges and those other TradFi institutions. The assets are controlled by centralized entities and identifiable human beings. Most crypto assets, in contrast, can be held and transferred without an intermediary. They can be transferred using personal computers and the internet from one person’s “wallet” to another’s wallet.
Metamask and Ledger are two well-known wallet providers. This is “peer-to-peer” transfer. That said, there are centralized crypto exchanges, such as Coinbase and Crypto.com, that can be used to transfer and custody crypto assets. And there are decentralized exchanges, such as Uniswap, where crypto assets are bought and sold peer-to-peer, with no human involvement other than the buyer and the seller. The Cube Exchange is a hybrid exchange, combining centralized ordermatching with decentralized custody and settlement.
Topics addressed in the FAQs include, among others, “what is crypto?” “Is crypto lawful?” “What do Miners do? What is Proof of Work? Proof of Stake?” “What are ‘utility tokens’?” and “What is a ‘stablecoin,’ and how does it compare to crypto assets like BTC and ETH?”
Public company boards are accustomed to scrutiny from a variety of sources, including regulators, investors, analysts, reporters, influences, and whistleblowers. This Skadden memo says that “watchdogs” that don’t have a stake in the company but demand board action on their hot-button issues should be added to that list, and that boards should take their demands seriously:
Boards may wonder whether they are obligated to respond to watchdogs or other third parties raising concerns about critical company issues. The board must exercise judgment in each instance about whether and how to respond. As a practical matter, however, the board should at least consider a watchdog’s demands and document its response and reasoning. Doing nothing can be risky for several reasons:
– Watchdogs may identify real issues that, if addressed, could benefit the company.
– If ignored, these demands could later be cited as “red flags” in litigation or regulatory investigations, suggesting the board failed in its oversight duties.
– Plaintiffs’ lawyers and regulators often use hindsight to argue that ignored warnings were clear signs of deeper problems.
The memo provides guidance to boards on how to evaluate and respond to watchdogs, and says that in order to appropriately fulfill their oversight responsibilities, boards “should respond as they would to similar issues raised by whistleblowers, shareholders or government agencies.”
Yesterday, the SEC announced that Corp Fin’s Deputy Director, Cicely LaMothe, had retired from the agency after 24 years of service. Ms. LaMothe served as Acting Director of Corp Fin prior to Jim Moloney’s appointment to the position of Director in September of this. Here’s what Director Moloney had to say about her tenure at the SEC in announcing her departure:
“Cicely has gone above and beyond the call of duty over the past twenty-four years to serve the public in her many critical roles in the Division of Corporation Finance,” said Jim Moloney, Director of the Division of Corporation Finance. “Throughout her tenure she has contributed her passion, commitment, and accounting expertise to support our mission – to ensure investors have the information they need to make informed decisions. She will be sorely missed, and we wish her all the best on her next chapter.”
Cicely LaMothe held a variety of senior positions at the SEC since joining the agency in 2002. In addition to her time as Acting Director of Corp Fin, these included service as Program Director of the Disclosure Review Program, Associate Director of the Office of Assessment and Continuous Improvement, and Associate Director of Disclosure Operations before being named Deputy Director for Disclosure Operations in 2022. We join Director Moloney in wishing her all the best going forward.
Like clockwork, a couple hours after I posted yesterday’s blog guessing about the SEC’s operating status over the upcoming 5-day weekend for federal workers, the SEC posted a formal announcement that EDGAR will be closed this Wednesday through Friday, resuming normal operations on Monday, December 29th. That means:
– EDGAR filing websites will not be operational.
– Filings will not be accepted in EDGAR.
– EDGAR Filer Support will be closed.
– Filings required to be made on December 24, December 25, or December 26, 2025 will be considered timely if filed on December 29, 2025, EDGAR’s next operational business day. Filers should plan their filings accordingly.
To put an even finer point on it, this is saying that the 24th – 26th are not “business days” for purposes of calculating filing deadlines. Effectively, the executive order gives you a couple of extra days to file.
We heard from Corp Fin Chief Counsel, Michael Seaman, and Corp Fin Counsel, Emma O’Hara, on how the Staff will handle the Rule 14a-8 process for the 2026 proxy season in light of Corp Fin’s November statement. Cooley’s Reid Hooper and Gibson Dunn’s Ron Mueller also shared their perspectives on strategy and how issuers should be thinking about and approaching the new process, and I had the joy of returning to my “webcast moderator” role for this event. Topics included:
– How the Staff is working through its post-shutdown backlog
– The expected substance of the notice submitted by companies under this year’s Rule 14a-8 approach
– What language should be included for the “unqualified representation”
– What to do after submission
– What happens if there’s a withdrawal
– The carve-out for Rule 14a-8(i)(1) requests
The on-demand replay of this program is available here – and continues to be free to anyone who wants access, even if you aren’t currently a member of this site. We aren’t offering CLE credit for this one, but we have plenty of other programs for members if you need to get credits before year-end!
If you’re not yet a member of TheCorporateCounsel.net, try a no-risk trial now. Our “100-Day Promise” guarantees that during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. If you need assistance, send us an email at info@ccrcorp.com – or call us at 800.737.1271.
In this 25-minute episode of the Women Governance Trailblazers podcast, Courtney Kamlet and I spoke with Cindie Jamison – who serves as Board Chair of Darden Restaurants, as well as a director and Audit Committee Chair at ODP Corp. and IFF Inc. She also recently published a memoir/career and life advice book that I very much enjoyed – “Shards in My Hair: Tales From Breaking the Glass Ceiling.” We discussed:
1. How to adapt to career-related setbacks and opportunities.
2. The biggest changes facing boards today – and how to stay nimble.
3. Evolution in activism approaches and director slates.
4. Potential impacts of the current deregulatory environment on boards and disclosure practices.
5. How to cultivate a productive boardroom culture and appropriate information flows.
6. Cindie’s advice for the next generation of women governance trailblazers.
To listen to any of our prior episodes of Women Governance Trailblazers, visit the podcast page on TheCorporateCounsel.net or use your favorite podcast app. I am SO grateful for all of the guests who have taken time to talk with us over the past 5+ years, and we’re looking forward to more great discussions in 2026! If there are governance trailblazers whose career paths and perspectives you’d like to hear more about, Courtney and I always appreciate recommendations! Drop me an email at liz@thecorporatecounsel.net.
Programming note: We’re starting our holiday blogging schedule tomorrow, which means that this blog will be sparse until early January. Happy holidays – and best wishes to all of our readers for the new year!
John shared encouraging stats last week for IPO momentum heading into 2026. If you’re planning an IPO in the near future, you should know that there is also a focus on market quality alongside the push to “Make IPOs Great Again” (in contrast to poor framing by the WSJ).
The latest example happened last week, when the SEC posted notice & immediate effectiveness of a Nasdaq proposal that expands the exchange’s ability to deny an initial listing based on the risk of price manipulation by third parties. This Mayer Brown blog summarizes the update:
Under the proposal, Nasdaq would adopt new interpretive material, IM‑5101‑3, under Nasdaq Rule 5101 that would permit it to deny an initial listing if it determines, based on a qualitative assessment, that the company’s securities are susceptible to manipulation or present comparable risks. This authority would apply even if the issuer otherwise meets Nasdaq’s existing listing requirements.
Nasdaq explains that the change would allow consideration of broader risk indicators suggesting susceptibility to problematic or unusual trading. Under the proposed rule, if Nasdaq denies a listing pursuant to this authority, it must issue a written determination explaining the basis for its decision. The issuer would have the right to appeal the determination to a Nasdaq hearings panel and would be required to publicly disclose the denial and the concerns identified by Nasdaq.
Nasdaq’s rule change aligns with the SEC’s recent trade suspensions based on alleged market manipulation – as the WSJ article had noted, there have been at least 12 trading suspensions since September, which is more suspensions than the previous 4 years combined.
It also follows other recent efforts by Nasdaq to clean up penny stocks. Meredith shared the proposals in real time earlier this fall, and now the SEC has:
– Initiated proceedings to determine whether to approve or disapprove a proposal to adopt additional initial listing criteria for companies primarily operating in China
– Approved a proposal, as amended, to amend certain initial listing requirements for de-SPAC transactions
– Approved a proposal, as amended in its entirety, to increase the minimum market value of unrestricted publicly held shares for companies that are pursuing an initial listing under the net income standard on either the Nasdaq Capital Market or the Nasdaq Global Market
When it comes to Nasdaq’s expanded discretion to consider the risk of manipulation during the initial listing process, the Mayer Brown blog shares these thoughts on what companies and their counsel should do:
For issuers seeking an initial Nasdaq listing, the proposal underscores the importance of assessing qualitative risk factors alongside technical listing compliance. In-house counsel and management may wish to consider whether ownership structures, jurisdictional features, public float characteristics, management experience, or the regulatory history of advisors involved in the offering could raise concerns under the proposed framework.
Advisors should also be mindful that Nasdaq may consider broader market patterns and past outcomes associated with similar listings when reviewing applications, rather than focusing exclusively on issuer-specific facts. Issuers and their advisors should consider how this expanded authority, if approved, could affect listing readiness, timing, and engagement with the exchange during the application process.
In case you missed it, the White House published an executive order late last week to give federal workers a holiday from December 24th through December 26th. As far as I can tell, the 5-day weekend won’t have much impact on issuers. Here’s what I can glean as of the time of this blog:
– The executive order permits agency heads to keep staff on-duty and stay open in their discretion.
– As of the time of this blog, the SEC hasn’t updated its website to announce any additional closures beyond the permanent federal holidays.
– In other years where there’s been a temporary holiday for federal workers, if the SEC is planning to be fully closed, it announces that – for example, see the announcement posted last year.
– The stock exchanges are sticking to their already-established holiday schedule of closing early on December 24th (at 1:00 pm ET) and operating a regular full trading day on December 26th, according to this Reuters article.
– So, perhaps there will be fewer folks reporting into the office, but for now it seems like Edgar is still open and the 24th and 26th will count as “business days.”
Here are holiday greetings from SEC Chair Paul Atkins and the staff in each division. I love the festive spirit!
Update: Helpfully, a few hours after this blog was published, the SEC has now posted a formal announcement that EDGAR will be closed this Wednesday through Friday, resuming normal operations on Monday, December 29th. That means no EDGAR filings will be accepted and December 24-28 are not “business days” for purposes of filing deadlines.
