We’re very excited to have David Fredrickson – Corp Fin’s Chief Counsel – joining our other esteemed panelists on our webcast tomorrow: “Shareholder Proposals – What Now?” So tune in to hear David – along with Davis Polk’s Ning Chiu, Morrison & Foerster’s Marty Dunn and Gibson Dunn’s Beth Ising – discuss Corp Fin’s new approach for processing shareholder proposal no-action requests, what’s new due to Staff Legal Bulletin 14K and the potential impact of the SEC’s new 14a-8 rulemaking proposal. Don’t miss it!
“ESG” Funds: What’s in a Name?
Regular readers of this blog know that we write more than we want to about the rise of “responsible investing” – e.g. just yesterday. It’s not that we’re opposed to the trend, we just question how meaningful it is. Incidentally, that’s also what’s frustrating people who want it to grow faster.
But here’s the deal: investors want to feel good – but in the end, they also want their returns to match what they’d get by tracking a broad market index. The funds that meet those dual desires end up attracting the most cash, even though some of the “cleaner” funds have significantly outperformed the competition in recent years. This is America! It’s all about marketing.
That’s why, as this WSJ article points out, it’s pretty common for “sustainable funds” to invest in fossil fuel companies (the tagline of the article is that “8 of the 10 biggest US sustainable funds invest in oil & gas companies”). And if that still seems odd to you, the reconciling point is that they invest in the companies with the highest ESG ratings in their sectors – the “most sustainable” fossil fuel companies, if you will.
So when it comes to attracting ESG dollars, the key appears to be outperforming your industry peers – or producing the most information, as Doug Chia suggests. And the Journal explains why that’s unlikely to change any time soon:
Energy shares have often been among the few sectors to reliably produce gains—making them an important group for asset managers. That is especially true for asset managers whose products are aimed in part at institutional investors, which often have less room to miss their target returns. Also, an oil company that scores poorly on one element of ESG—say, the “E”—might do well on the other two elements, meriting its inclusion in a fund.
Transcript: “Sustainability Reporting – Small & Mid-Cap Perspectives”
We’ve posted the transcript for our recent webcast: “Sustainability Reporting – Small & Mid-Cap Perspectives.”
Recently, the “Governance & Accountability Institute” announced that 60% of the Russell 1000 are now publishing sustainability reports. The top half of that index aligns with the S&P 500 – where sustainability reporting has become mainstream – and 34% of the smaller companies have picked up the practice too. Here’s some other takeaways:
– Of the 60% of Russell 1000® companies that report, 72% were S&P 500® companies – and 28% were from the second half of companies in the index
– Of the 40% of Russell 1000® companies that do not report, 83% were the smaller half of companies by market cap – while only 17% of the non-reporters were S&P 500® companies
Like just about everything, this has become a political issue too. This Stinson blog reports that a right-wing org is asking the SEC to prohibit companies from making “materially false and misleading claims and statements related to global climate change.” Meanwhile, in the more mainstream world, the US Chamber is now focusing on sustainability disclosure – and has now released its own set of “best practices” for voluntary ESG reporting.
“Responsible Investors” Say ESG Isn’t a Fad
You have to wonder what’s driving sustainability reporting by smaller companies. They’re less likely than large companies to be doing it in response to proposals from “activist” shareholders. But there are also shareholders whose attention companies actually want to attract. A recent SquareWell Partners study says that providing ESG info is the “price of entry” for companies of all sizes that want to add big investors to their rosters – or keep them there. Here’s a few key findings:
– Nearly all of the top 50 asset managers (managing $50.6 trillion) are signatories to the UN “Principles of Responsible Investing” – committing to incorporate ESG factors into investment & ownership decisions
– Oddly, the Global Sustainable Investment Initiative reports “only” $30.7 trillion of sustainably invested assets last year – so it’s possible the PRI signatories aren’t following through on the principles
– One-third of the asset managers clearly disclose their approach to integrating ESG factors into fixed income;
– 64% of the asset managers are signatories to the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD);
– Close to 80% of the asset managers engage with portfolio companies on ESG issues;
– 68% of the asset managers use two or more ESG research and data providers;
– Only 20% of the asset managers have a low receptivity to activist demands; and
– A quarter of the asset managers have gone public with their discontent at portfolio companies since January 2018.
For even more on this topic, see Aon’s 28-page report on responsible investing trends. Also check out this recap from Cooley’s Cydney Posner about a recent meeting of the SEC’s Investor Advisory Committee – where reps from AllianceBernstein, Neuberger Berman, SSGA and Calvert discussed how they’re using ESG data for all their portfolios and (for the most part) called for the SEC to guide companies toward more standardized disclosure.
On the debt side, take a gander at this recent PepsiCo announcement about a $1 billion “green bonds” offering where the proceeds will be used to finance the company’s “UN Sustainable Development Goals.” This Moody’s alert says that green bond issues could top $250 billion this year – much higher than what was originally forecast – and walks through some of the global trends. To keep track of memos on this growing trend, we’ve added a new “sustainable finance” subsection to our “Debt Financings” Practice Area.
E&S Risk Factors on the Rise
This NACD blog analyzes the increasing prevalence of “E&S” risk factors. Here’s what’s trending on climate change:
Thirty percent of Russell 3000 companies discussed climate change as a risk in their 10-K statement, with only 3 percent of companies discussing climate change risk in the MD&A section. Predictably, the energy and mining sector had the most disclosure on climate change risk. Retail and consumer sector companies, which are not thought of traditionally for being exposed to climate change risk, also had a high rate of disclosure, citing damage to their supply chain and access to raw materials as risks.
Disclosures for every sector focused on the risk of regulatory and market responses to climate change, including legislative regulation of air emissions, caps, and carbon taxes. Other companies were more detailed in their discussion of climate change risk as it relates to their specific operations, such as Monster Beverage Co.’s 10-K, which states that, “In addition, public expectations for reductions in greenhouse gas emissions could result in increased energy, transportation and raw material costs, and may require us to make additional investments in facilities and equipment. As a result, the effects of climate change could have a long-term adverse impact on our business and results of operations.”
There’s been some back & forth over “who writes the rules” when it comes to dual-class shares: candidates for that job have included indexes, exchanges and institutional investors (whose objections to an extreme variation of this structure was one of many factors that played a role in the fall of WeWork). In a recent speech, the SEC’s “Investor Advocate” – Rick Fleming – even acknowledged that investors are part of the problem – but also called for heightened SEC disclosure requirements for dual-class shares and intervention from stock exchanges.
Now, CII is also moving the issue to the state level – via this letter to the Delaware State Bar Association. Here’s an excerpt (and here’s a Wilson Sonsini blog that responds to CII’s proposal):
A proposed new Section 212(f) of the DGCL is attached as Annex A to this letter. Pursuant to that language, no multi-class voting structure would be valid for more than seven years after an initial public offering (IPO), a shareholder adoption, or an extension approved by the vote of a majority of outstanding shares of each share class, voting separately, on a one-share, one-vote basis. Such a vote would also be required to adopt any new multi-class voting structure at a public company. The prohibition would not apply to charter language already existing as of a legacy date.
Non-GAAP: How to Avoid Staff Scrutiny
Last month, I blogged that this year’s “Top 10 List” for Corp Fin comments continues to include non-GAAP – no surprise there. This PwC memo highlights the 5 most common non-GAAP issues that draw Staff scrutiny:
1. GAAP measure not given enough prominence
2. Reconciliation between GAAP and non-GAAP measures is missing or does not start with the GAAP measure
3. Non-GAAP measure is not presented consistently between periods or the reason for changing a non-GAAP measure is not disclosed
4. Management’s explanation of why a non-GAAP measure is useful to investors is inconclusive
5. Use of an individually–tailored accounting principle (a company cannot make up its own GAAP)
We’ve blogged before about that last one – it’s a newer area of comment so there’s still some confusion about what it means. For those who subscribe to “The Corporate Counsel” print newsletter, we’ll take a deep dive into this topic in the forthcoming November-December Issue.
“Investors’ Exchange”: RIP
Three years ago, John blogged about a new national securities exchange, “IEX” – which was unique in that it wasn’t operated by Nasdaq or NYSE. Its run was short-lived – this WSJ article reports that it decided to exit the business after its only listed company went back to Nasdaq. But other new competitors remain optimistic – there are at least three hoping to break into the market next year…
In other “exchange” news, last week Nasdaq filed a rule change to modestly increase annual listing fees. Starting January 1st, fees for most equities will go up by about $1-$3k…
We’ve been covering the Administration’s gradual squeeze on regulatory guidance for some time (here’s our latest from April). As noted in this DLA Piper memo, President Trump signed two ‘Executive Orders’ recently that limit the practice of “regulation by guidance.” Here’s the “improved agency guidance” order that requires each agency to post its guidance documents on an indexed, searchable website after the OMB has issued implementing guidance about how to accomplish that (here’s a comprehensive Davis Polk memo on this order).
And here’s the “enforcement” order that seeks transparency and fairness in the use of agency guidance in civil administrative enforcement and adjudication. As this King & Spalding memo notes, there are a number of complex processes & exceptions in the orders that will require agencies to take a bit of time to promulgate new procedures.
The “improved agency guidance” order doesn’t apply to “independent regulatory agencies” – so the SEC isn’t required to comply with it. But pages 30-32 of this Davis Polk memo note that agencies like the SEC still might voluntarily comply with some – or all – of its directive. I’m not sure if the “enforcement” order applies to the SEC (but again, even if it doesn’t – the SEC may voluntarily comply with it) – if you can figure that out, let me know…
With 40 proxies filed under the new hedging disclosure rules, this FW Cook memo notes these stats:
– 100% have hedging policies in place
– 62% have hedging policies that cover directors and all employees
– 58% disclose policies that prohibit both transactions in company stock with a hedging function and derivative transactions generally
– 60% include their hedging disclosure only in the CD&A
I tend not to pay attention to the content that the SEC’s Office of Investor Education puts out because most of it seems targeted at people who think pro wrestling is real. These new short “educational” videos might prove my point (here’s the related press release)…
A member recently complained that the SEC seems to have changed how Edgar search results are displayed for “current & former names.” Here’s the note:
Have you noticed this change lately in Edgar search results? It used to be that when you ran a ‘historical name’ search, the search results would let you know both the former and current names. But no longer – now you only can see the most current company name on the ‘search results page.’ To get the full corporate history, you have to click into the issuer’s profile.
Take for example the “SPAC Thunder Bridge Acquisition, Ltd.” – when you search for this name in the “company search page,” you get a list that includes the correct company – but ONLY under their newly acquired name, which is “Repay.”
Then, only at the “Repay” landing page can you see the former name of the company. This was not the case before as you used to get the full corporate history with all of the former names on a ‘search results page’ without having to take a gamble on the new company’s name and its current profile. We’ve only noticed this change over the last few days. This change makes a difficult life that more difficult for those practitioners & researchers forced to conduct Edgar searches.
Corp Fin’s David Fredrickson Joins Next Thursday’s “Shareholder Proposals” Webcast
I’m excited to announce that David Fredrickson – Corp Fin’s Chief Counsel – has joined next Thursday’s webcast panel to discuss shareholder proposals. For the webcast – “Shareholder Proposals: What Now” – David joins Davis Polk’s Ning Chiu, Morrison & Foerster’s Marty Dunn and Gibson Dunn’s Beth Ising.
They will discuss Corp Fin’s new approach for processing shareholder proposal no-action requests, the expected impact of Staff Legal Bulletin 14K and the potential impact of the SEC’s new rulemaking proposals on shareholder proposals.
More on “Prohibited? Using the SEC’s Logo”
A while back, I blogged about how it was probably illegal to use the SEC’s logo without the agency’s permission – but that it’s often used online anyway. I didn’t know the law – I guessed that either federal agencies trademarked their logos with the Patent & Trademark Office (known around town here as the “PTO”) – or that a federal law just made it illegal. Keith Bishop of Allen Matkins did a little homework & found 15 U.S.C. Sec. 1017, which provides:
Whoever fraudulently or wrongfully affixes or impresses the seal of any department or agency of the United States, to or upon any certificate, instrument, commission, document, or paper or with knowledge of its fraudulent character, with wrongful or fraudulent intent, uses, buys, procures, sells, or transfers to another any such certificate, instrument, commission, document, or paper, to which or upon which said seal has been so fraudulently affixed or impressed, shall be fined under this title or imprisoned not more than five years, or both.
Neither Keith nor I know much about this area, but this statute appears to require fraud or wrongful conduct – and it doesn’t seem to make allowances for use online. Being a California guy, Keith also found that if a logo is implying government approval or connection, it could violate California Bus. & Prof. Code Sec. 1733.6…
Yesterday, ISS announced its new policy updates for next year. In addition to firming up its board diversity policy (which is effective for the upcoming proxy season), clarifying its policies on independent chair & share repurchase proposals and making a few other changes, the policy updates for the US create two distinct policies for newly public companies that address: (1) problematic governance provisions – e.g. supermajority voting for bylaw or charter amendments, classified boards and (2) multi-class capital structures with unequal voting rights.
The multi-class policy now includes a framework for addressing acceptable sunset requirements for problematic capital structures in newly public companies. ISS says that a number of considerations will be taken into account when assessing the reasonableness of a time-based sunset provision – but sunset periods beyond seven years from the date of the IPO will not be considered reasonable.
The Corp Fin logo is lost! Have you seen it? Back in the ‘aughts,’ I remember Corp Fin introducing its own logo. It looked pretty similar to the well-known SEC logo. However, I can’t recall that logo ever being used – and after scouring the Web, there’s no trace of this logo. Where has it gone? At the time, it wasn’t so strange since Enforcement had its own logo (many thanks to Bruce Carton of the “Securities Docket” for digging that one up) which I believe is not available anywhere on the Web except for the below:
SEC’s Enforcement: Do Stats Matter?
Every year, the SEC’s Enforcement Division releases stats about the number of actions it has brought, etc. – here’s the latest stats that were released last week (and here’s what the Enforcement co-Directors said about them). It’s good fodder for the media. But why does Enforcement do it? They’ve made this annual announcement well before our current “Big Data” era – when analytics drives so many corporate decisions.
I would argue that some of the motivation is driven by the fact that Congress requires some proof that its money is going to good use. The SEC is not self-funded – and the Senate & House Committees that oversee the SEC need something to hang their hat on. Of course, the stats can’t improve every year – at some point, they have to fall to earth. That’s when the SEC argues that quality is better than quantity – such an argument was made just last year.
Anyway, here’s a Debevoise & Plimpton memo covering the latest stats. And here’s a speech by SEC Commissioner Hester Peirce about them – this excerpt from the beginning is pretty funny:
It is hard to believe that 2019 is almost over. When I think back on the year, one defining theme is broken windows. Why is 2019 the “Year of the Broken Window”? I live in an condominium building with a lobby that has three sides of floor to ceiling windows. Three times this year, I have come down into the lobby to find one of these large windows broken. The first time was the routine, upset resident taking a soul-satisfying, hand-crushing whack at a window. The second two incidents though were a bit less commonplace.
One morning, I came down around 7 a.m. to find a van nose-first in the lobby. Rather than rounding the semicircular driveway in front of the building, the van headed straight into the lobby. Texting while driving? Medical emergency? Brake failure? I am not sure which, but I did feel bad for the driver, who, although apparently uninjured, was obviously unhappy. Misery loves company, however, and this driver got company. A couple months later, I once again came down in the morning to find a shattered window. No vehicle this time. It had already been cleared out of the lobby. From the condo rumor mill, I gleaned that an early morning car chase had ended with one of the vehicles in my building’s lobby.
A “whodunit”! We haven’t blogged about one of those in a while. You will recall that WeWork – the gift that keeps on giving to this blog – withdrew its IPO registration after facing much criticism when its S-1 became publicly available. One of the consequences of the failure of WeWork’s IPO to see daylight was that Corp Fin’s comment letters (& the company’s responses) would never be made public. Here’s the SEC filing history for WeWork – showing the progression from a draft confidential filing – to filing the S-1 – to filing a withdrawal request for the S-1 before it ever became effective. Note that the comment letters & responses are not posted there.
Apparently, the WSJ somehow got their hands on that file, which became the basis for this article that excerpts specific comments from Corp Fin’s comment letters to WeWork – and analyzes some of the company’s responses. Here’s the intro to that WSJ article:
Just weeks before WeWork expected its stock to begin trading publicly, the startup was still wrangling with the Securities and Exchange Commission over a controversial key financial metric and a litany of other concerns about its planned multibillion-dollar IPO.
On Sept. 11 — after the initial public offering prospectus had been public for nearly a month, and after the SEC had already made dozens of demands about the document—the regulator sent the shared-workspace company a list of 13 still-unresolved concerns, according to previously unpublished correspondence reviewed by The Wall Street Journal. The back-and-forth shows that WeWork was scrambling to clean up big problems as its IPO was crumbling. The timing was indicative of the chaotic management that gave investors pause and ultimately led the company to pull the offering and Chief Executive Adam Neumann to step down under pressure.
The WSJ article doesn’t note how they obtained this “previously unpublished correspondence.” So we have no idea how that happened. Here are some of the possibilities:
1. One of the investment banks? They also had a big loan deal going down & some commercial lenders are infamous for leaking. But still a long shot. Odds: 1000 to 1.
2. Some lawyer on the deal team? Not in a million years. That’s a career killer. Odds: 1 million to 1.
3. Someone at WeWork? It’s not in their best interest – but the place is dysfunctional. Odds: 4 to 1.
4. Someone at the SEC? The deal was such a turd burger & the prospectus so outrageous that perhaps the SEC wanted to have something in the public domain that could show it was doing its job. But I would fall off my chair if Corp Fin provided this file (given its policy of not posting comment letters until after a registration statement is declared effective) – unless it was told to do so by the SEC Chair, etc. But it is possible that someone high up wanted this stuff out there. Odds: 50 to 1.
5. Maybe the WSJ made a FOIA request to the SEC? This seems the most likely by far. Except FOIA requests typically take quite a while to process. Odds: 2 to 1.
At the end of the day, this isn’t an important development. Just something novel to note. Even if Corp Fin gave the comment letter file to the WSJ, I would argue that it has that discretion – it simply is making an exception to its own informal policy. And there really isn’t much of a policy reason to keep its comments hidden – even if the IPO never went off. The more transparency, the better…
Poll: Issuing 100 Comments on an IPO?
Back when I served in Corp Fin, I once issued a comment letter with over 100 comments in it on the legal side. It was a family majority-owned REIT IPO, a company that was rife of conflicts of interest – and the prospectus needed many more risk factors, etc. I felt a little guilty about issuing so many comments at the time – but not so much anymore.
In this anonymous poll, imagine you worked in Corp Fin – how would you feel if you issued 100 comments:
survey tool
Transcript: “M&A in Aerospace, Defense & Government Services”
We have posted the transcript for our recent DealLawyers.com webcast: “M&A in Aerospace, Defense & Government Services.”
A while back, I ran our 1st annual contest for the cutest dog. It was so popular that the Internet almost broke with all the voting (just under 1k votes cast) – Skadden flexed their muscles and Hagen Ganem’s “Teddy” crushed the competition. And some members responded by emailing me with pictures of their dogs. So let’s do it again – the poll is at the bottom of this blog:
Rick Fleming, the SEC’s Investor Advocate, recently lambasted companies with dual-class capital structures, referring them to as a “festering wound” that, if left unchecked, could “metastasize” and threaten the “entire system of our public markets.” C’mon Rick, we won’t get anywhere if you keep pulling your punches – let people know how you really feel. . .
Notwithstanding his rhetorical flourishes, Mr. Fleming deserves credit for being willing to acknowledge that investors are a big part of the problem:
We need to acknowledge that investors themselves have engaged in their own race to the bottom when it comes to corporate accountability to shareholders. Investors, and particularly late-stage venture capital investors with deep pockets, have been willing to pay astronomical sums while ceding astonishing amounts of control to founders. This means that other investors, in order to deploy their own capital, must agree to terms that were once unthinkable, including low-vote or no-vote shares. The end result is a wave of companies with weak corporate governance.
But after making this acknowledgment, he immediately retreated to the customary fallback position – we need government intervention on dual-class stock because there’s an insurmountable collective action problem here: “Investors, acting in their own self-interest (or according to their investment mandates), may be inclined to invest in companies with weak corporate governance even though they know that these companies will ultimately harm the broader capital formation ecosystem.”
Are late round & IPO investors just too greedy & short-sighted to be trusted to get this right? Could be. I mean, they’re sure greedy. But on the other hand, it’s possible that their indifference reflects the fact that many institutional investors don’t think dual-class structures pose the kind of existential threat to the market that people like Mr. Fleming do. Who knows? Some may even believe that the jury’s still out on whether dual-class structures are a problem at all.
Oddly enough, the WeWork fiasco may undermine the argument for outside intervention in IPO capital structures. WeWork indicates that there is a point when governance problems are egregious enough to provoke IPO investors to collectively say “no thanks” – no matter how much sizzle the deal supposedly has. The fallout from the busted deal also suggests that even VC enablers are capable of learning their lesson when it comes to ceding so much control to founders.
I don’t want to push this too far – WeWork turned out to be such a mess that nobody really deserves to be patted on the back for having the sense to walk away. But if the argument for intervention on dual class structures is based on the premise that investors won’t act collectively to draw the line on governance problems, WeWork suggests that isn’t the case, and that the reasons why they don’t normally take collective action on this issue may have to do with things other than greed & short-sightedness.
Testing the Waters: Managing & Disclosing Indications of Interest
The post-JOBS Act ability to “test the waters” prior to filing a registration statement has made soliciting non-binding indications of interest from institutional investors a fairly common practice for IPO issuers. But while companies may obtain those indications of interest, this Olshan blog points out that there are still many issues that companies need to consider when it comes to planning the solicitation process & disclosing indications of interest.
In particular, this excerpt points out that offering participants still need to navigate the statutory restrictions on “offers” & “sales” under the Securities Act:
In view of these restrictions on premature “offers” and “sales,” the SEC has periodically requested issuers, through staff comment letters, to explain how and when they received the indications of interest, especially from new unaffiliated investors, and disclose any written communications or agreements that accept the investments or indications of interest. The SEC has also asked issuers to disclose the number of potential indicated investors the issuer communicated with on the topic.
As a result, issuers should note that any pre-IPO meetings or oral communications with potential new investors—where an investor indicates an interest in purchasing shares—must be conducted in the context of “testing-the-waters” activities pursuant to Section 5(d) of the Securities Act. An underwriter should generally be able to seek non-binding indications of interest from prospective investors (including the number of shares they may seek to purchase at various price ranges) as long as the underwriters do not solicit actual orders and an investor is not otherwise asked to commit to purchase any particular securities.
Similarly, when the issuer or underwriter engages a potential investor in any written communications (as defined in Rule 405 under the Securities Act), they may also need to provide them to SEC staff, who will verify whether the issuer violated Section 5.
Oops! Canadian Fund Overlooks $2.5 Billion in Securities in 13F Filing
I’ve always thought that 13F filings were far and away the most useless documents required to be filed with the SEC. But they’re even more useless if the filer neglects to include 20% of its reportable holdings. This is from The Financial Post:
One of Canada’s largest pension funds “inadvertently omitted” all of its Canadian holdings from a recent disclosure it made to the U.S. Securities and Exchange Commission, failing to include about US$2.46 billion in investments.
British Columbia Investment Management Corporation made the omission in February, when it submitted its disclosures for the three months ending on Dec. 31, 2018. The pension fund, which has $145.6 billion in assets under management, failed to disclose holdings in 98 companies, primarily across Canada’s energy, banking and mining sectors. The Canadian holdings accounted for more than 20 per cent of its total disclosed investments.
Apparently, this isn’t the first time that BCI has messed up its 13F filings. The Post article says that in October 2015, it filed 16 amendments to 13F filings dating back to 2010.
The comment period on the SEC’s proposal to amend Items 101, 103 & 105 of Regulation S-K recently expired. In the proposing release, the SEC laid out some controversial changes to current rules, including a “principles based” approach to Item 101 & a “human capital resources” disclosure requirement. In light of the contentious nature of these proposals, I thought a stroll through the comment letters might be interesting – and I was right.
But so was a new entrant into the governance debate – I guess I’ll call this one “Big Yoga“. “Yoga Burn Challenge” CEO Zoe Bray-Cotton submitted a comment letter focusing on human capital issues. Her comments are thoughtful & serve as a reminder that these issues matter to a broader segment of society than just those of us who earn a living dealing with securities regulation. But what really made her letter stand out from the crowd was the fact that she cited us – well, actually, ME! – in it:
I also refer to the following articles published by TheCorporateCounsel.net website:
1. Board Gender Diversity: Good for Business
2. Gender Quotas on Boards?
3. “Just Vote No”: State Street’s Alternative to Quotas
Those were all in this blog that I wrote a couple of years ago. Anyway, she plugged me, so I will plug her. Go check out the Yoga Burn Challenge – and tell Ms. Bray-Cotton that I sent you.
Data Security: CalPERS Directors Keep Losing Their Devices
Here’s a goofy one for you – it seems that some members of the CalPERS board have a real problem hanging on to their devices. Here’s an excerpt from a recent Sacramento Bee article:
CalPERS board member Margaret Brown has reported losing two state-issued iPhones and an iPad since she was elected to her seat overseeing the $380 billion pension fund two years ago, according to device records. Brown’s losses of the devices, while representing relatively minor security risks for the California Public Employees’ Retirement System, stand out compared to other board members’ handling of their devices, according to records CalPERS provided under the Public Records Act.
In the last five years, three other board members among the 20 officials listed in the records reported losing one iPad each. Former Board President Priya Mathur reported losing an iPad Air 2 in 2018, and the device wasn’t found, according to the records. Board members Theresa Taylor and Ramón Rubalcava each lost one iPad, neither of which appear to have been returned, according to the records.
But there’s no need for CalPERS participants to worry about their personal data being compromised. That’s because experts quoted in the article said that “only an extremely sophisticated hacker could access information on the iPads with the protections CalPERS has in place.” Whew! Good thing there are so few extremely sophisticated hackers out there.
I guess I shouldn’t be too hard on these folks. After all, my youngest son lost 2 smart phones on consecutive college spring breaks (we were not amused). On the other hand, it’s probably fair to expect directors of a public institution to be a little more responsible than a frat boy. I don’t know if there will ever be a Hall of Fame for institutional investors, but if there is, the slogan “for thee but not for me” should be carved in stone over the entrance to it.
EDGAR: Why Are iXBRL Filings Sometimes So Clunky to Download?
Several members have pointed out – in emails & in our ”Q&A Forum” (eg #10032) – that some iXBRL filings take forever to load. According to the SEC Office of Structured Disclosure’s Inline XBRL page, that shouldn’t be the case if you’ve got an up-to-date browser:
Viewing Inline XBRL filings is simple and does not require any specialized software because the Commission has incorporated an Inline XBRL Viewer into the Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
Anyone using a recent standard internet browser can view an Inline XBRL filing on EDGAR. (Recent standard internet browsers are ones that fully support HTML 5 and JavaScript, such as Chrome 68 and later, Firefox 60 and later, Safari IOS 11 and later, Microsoft Edge Windows 10, and Internet Explorer 11.)
Personally, I found that when I used the old computer that I was issued when I first joined TheCorporateCounsel.net team, iXBRL filings took forever to load. However, they uploaded fairly quickly on the new computer that my law firm issued to me, so I chalked it up to outdated hardware/software. However, others seem to have had problems on new computers/browsers as well. Does anybody know if there’s a fix that people may be overlooking?
