Capital Markets & Securities Law Watch
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July 16, 2024
|4 min read
SEC Pokes Holes in NYSE’s Proposed Rule Change to Extend SPAC Merger Deadline
The SEC has recently commented on the NYSE’s proposed rule to provide SPACs up to an additional six months to complete a business combination if the SPAC has entered into a definitive business combination agreement within 36 months of initial listing. In this post, we discuss both the NYSE’s proposed rule and the SEC’s concerns. Continue to follow Winston for more info and insights.
July 10, 2024
|2 min read
SEC Issues Additional Guidance on Cybersecurity Incident Disclosure
On June 24, 2024, the U.S. Securities and Exchange Commission (SEC)’s Division of Corporation Finance released five new Compliance and Disclosure Interpretations (C&DIs) covering the disclosure of cybersecurity incidents under Item 1.05 of Form 8-K.
July 2, 2024
|3 min read
Large Accelerated Filers Must Tag Fee Exhibits in XBRL Starting July 31, 2024
On October 31, 2021, the Securities and Exchange Commission (SEC) adopted final rules modifying the requirements applicable to filing fee disclosure and payment methods for several fee-bearing forms, schedules, statements and related rules.
June 14, 2024
|3 min read
SEC Greenlights Exchanges to List Ether ETFs
On May 23, 2024, in a surprise move, the Securities and Exchange Commission (SEC) issued an order that will allow exchanges to list Ethereum-based exchange-traded funds (ETFs). The SEC’s order follows its recent decision to allow trading of Bitcoin ETFs, in what has been interpreted by some as a softening approach towards the regulation of digital assets. Shortly after the SEC’s approval of Bitcoin ETFs, at least 10 asset managers—including BlackRock, Fidelity, Grayscale, and Invesco—initiated applications with the SEC to begin listing Ether ETFs.
May 29, 2024
|7 min read
The Impact on Equity Compensation Tax Withholding of the SEC’s New T+1 Settlement Cycle
Last year, the Securities and Exchange Commission adopted its final rule to shorten the settlement cycle for most broker-dealer securities transactions to one business day after the trade date (T+1). Previously, the standard settlement cycle was two business days after the trade date (T+2).
May 13, 2024
|5 min read
SEC Charges Audit Firm BF Borgers With Fraud
On May 3, 2024, the SEC announced charges against audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers, of deliberate and systemic failures to comply with PCAOB standards in its audits and reviews incorporated in over 1,500 SEC filings from January 2021 through June 2023, in what the SEC called “one of the largest wholesale failures by gatekeepers in our financial markets.” In this post, we review the SEC’s order and the SEC staff’s statement regarding the disclosure and reporting obligations of impacted issuers.
May 10, 2024
|2 min read
The NYSE Amends Trading Halt Rules for Reverse Stock Splits to Ensure Consistency with Nasdaq
On April 11, 2024, the New York Stock Exchange (NYSE) filed a proposed rule change with the Securities and Exchange Commission, proposing a new subsection of Rule 123D that alters the rules governing the halting and resumption of trading in a security undergoing a reverse stock split.
May 6, 2024
|2 min read
The NYSE Proposes Rule Allowing It To Delist Companies That Change Their Primary Business Focus
On April 17, 2024, the New York Stock Exchange (NYSE) proposed a rule that, if adopted by the U.S. Securities and Exchange Commission (SEC), would amend Section 802.01D of the NYSE Listed Company Manual to provide the NYSE with discretionary authority to commence immediate suspension and delisting proceedings for a listed company that has “changed its primary business focus to a new area of business that is substantially different from the business it was engaged in at the time of its original listing or which was immaterial to its operations at the time of its original listing.”
April 30, 2024
|6 min read
SEC Targets “AI Washing” by Companies, Investment Advisers, and Broker-Dealers
With consumer and investor interest in artificial intelligence (AI) surging, there has been heightened concern among regulatory agencies, including the Federal Trade Commission (FTC) and the Securities and Exchange Commission (SEC), with companies engaging in a deceptive practice the FTC and SEC have dubbed “AI washing.”
April 22, 2024
|2 min read
The NYSE Proposes Rule Providing SPACs Additional Time to Close Deals Before Delisting
Under its current rule, the New York Stock Exchange (NYSE) commences delisting procedures against a listed special purpose acquisition company (SPAC) if it fails to complete a business combination within 36 months of its initial listing date, regardless of whether it has entered into a definitive agreement for a business combination.
April 3, 2024
|4 min read
In connection with the 2024 proxy season, pension funds associated with the United Brotherhood of Carpenters and Joiners of America (the Carpenter Funds) have submitted a director resignation bylaw proposal (the Proposed Bylaw or Proposal) to at least 30 companies for inclusion in the companies’ 2024 proxy statements and to be voted on at the companies’ 2024 annual meetings of stockholders pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the Exchange Act).
April 1, 2024
|6 min read
SEC Charges Skechers with Failure to Disclose Related Person Transactions
On March 7, 2024, the Securities and Exchange Commission (SEC or Commission) announced charges against Skechers U.S.A. Inc. (Skechers) for violating Rules 13a-1 and 14a-3 under the Securities Exchange Act of 1934, as amended (the Exchange Act), by failing to disclose certain transactions with related persons in reports filed with the SEC for the years 2018 through 2021.
March 7, 2024
|2 min read
On February 20, 2024, the United States Supreme Court denied a petition for writ of certiorari and declined to review the 3-0 decision of the United States Court of Appeals for the Second Circuit (the Second Circuit) in Kirschner v. JP Morgan Chase Bank, N.A., which held that certain syndicated loan notes were not securities. By refraining from hearing the case, the Supreme Court left the Second Circuit’s decision in place. The result is that syndicated loan lenders do not need to comply with securities laws in the ordinary course of selling syndicated loan notes to other lenders.
March 6, 2024
|7 min read
SEC Adopts Final Climate-Related Disclosure Rules
On March 6, 2024, the US Securities and Exchange Commission (SEC or Commission) announced the adoption of final rules requiring registrants – both domestic companies and foreign private issuers (FPIs) – to include climate-related information in their registration statements and annual reports.
February 29, 2024
|8 min read
As discussed in prior blog posts, on June 9, 2023, the Securities and Exchange Commission (the SEC) approved listing standards promulgated by the New York Stock Exchange (NYSE) and Nasdaq Stock Market (Nasdaq) regarding the recovery of erroneously awarded incentive-based compensation, referred to as “clawbacks.”
February 28, 2024
|2 min read
SEC Chair Comments on Challenges to Proposed Climate Disclosure Rules
The proposed rules, if adopted, would create new disclosure requirements covering, among other things, climate-related risk factors and identification and mitigation of climate-related risks, climate targets and goals and plans for energy transitions, greenhouse gas emissions, and financial statements that include climate-related financial impact and expenditure metrics.
February 21, 2024
|3 min read
The SEC’s Gag Rule: An Educational Tool or Agency Overreach?
The Securities and Exchange Commission (the Commission) has a longstanding policy under its No-Admit/No-Deny Rule (or the Gag Rule) that prohibits defendants from openly denying, or even criticizing, allegations made by the Commission after settling an enforcement action. The Gag Rule has come under scrutiny for its First Amendment implications and “muzzling” effect, even as the Commission stands behind the policy’s reasoning.
February 15, 2024
|1 min read
SEC Chief Accountant Issues Statement on Public Company Audit Quality
On February 5, 2024, Securities and Exchange Commission (SEC) Chief Accountant Paul Munter issued a statement calling for increased quality of public company audits. Munter’s statement follows findings from the Public Company Accounting Oversight Board (PCAOB) of increased deficiency rates in recent year-over-year inspections, and alludes to new and existing risks that “may put pressure on the operations and financial health of companies and render financial reporting and auditing more challenging.”
February 13, 2024
|12 min read
SEC Officials and Others Gather at 2024 Northwestern Securities Regulation Institute
The Northwestern Pritzker School of Law hosted its 51stannual Securities Regulation Institute from January 22, 2024 to January 24, 2024 in Coronado, California. Various practitioners and professionals from the U.S. Securities and Exchange Commission (SEC), law firms, academic institutions, accounting firms and SEC reporting companies participated in the conference. Winston & Strawn LLP was a sponsor of the event. Below is a summary of key takeaways from the conference.
February 1, 2024
|1 min read
U.S. to Transition to T+1 Settlements
As the U.S. prepares to transition to a T+1 practice for securities settlements on May 28, 2024, Securities and Exchange Commission (SEC) Chair Gary Gensler gave a speech to the European Commission on January 25, 2024, in which he commented, "The longer it takes for a trade to settle…the more risk our markets assume and the more risk fundamentally we all assume."