Capital Markets & Securities Law Watch

Recent enforcement actions targeting a CEO, CFO, and an audit committee chair underscores the SEC's focus on gatekeeper accountability.

The SEC recently adopted rule and form amendments known as EDGAR Next, which will change the existing electronic filing system. Over the next year, companies must alter their current practices to comply with these changes. 

The Securities and Exchange Commission recently announced charges and million-dollar penalties against four companies for allegedly making materially misleading disclosures regarding cybersecurity risk and intrusions relating SolarWinds hack.

On October 7, 2024, the SEC approved a Nasdaq-proposed rule amendment which impacts Nasdaq’s minimum bid price and reverse stock splits on the exchange. These changes may impose further considerations for companies as they work through the broader impact of such actions on their overall compliance status. 

A group of United States senators, including the Ranking Member of the Senate Banking Committee, has introduced the Empowering Main Street in America Act of 2024. The bill, which largely addresses issues surrounding emerging growth companies, is divided into four parts, each focusing on a specific goal to: promote capital formation, expand investment opportunities for retail investors, enhance investor confidence, and increase oversight over regulatory bodies.

On September 27, 2024, California Governor Gavin Newsom signed into law amendments to California’s first-in-the-nation greenhouse gas emissions disclosure and climate-related financial risk reporting bills. The amendments did not delay the reporting deadlines applicable to reporting entities, and companies should take action now to ensure they will be ready to report on 2025 emissions and risks starting in 2026.

The New York Stock Exchange recently proposed changes to its Listed Company Manual to clarify how its domestic and international standards for initial listing of common equity securities apply to foreign private issuers.

On September 25, 2024, the Securities and Exchange Commission (the SEC) announced settled charges against 25 entities and individuals for late beneficial-ownership and insider-transaction reports. The SEC had levied penalties on these filers because of failures to timely report information about their holdings and transactions in public-company stock. Without admitting or denying the charges, 2 public companies, 13 other entities, and 10 individuals agreed to cease committing and causing violations and pay civil penalties. The civil penalties ranged from $10,000 to $200,000 for individuals, and $40,000 to $750,000 for the entities involved, including $200,000 each for two public companies that were charged with contributing to filing failures by certain corporate insiders and failing to report their insiders’ filing delinquencies.

The Securities and Exchange Commission (SEC) recently charged a public company with violations of Regulation Fair Disclosure (“Regulation FD”) stemming from social media posts by the company’s CEO. These charges are evidence of a trend toward increased Regulation FD enforcement by the SEC.

On August 26, 2024, the SEC approved amendments to Nasdaq rules clarifying and modifying phase-in periods for certain corporate governance requirements and clarifying certain cure periods.

The Securities and Exchange Commission recently approved the Public Company Accounting Oversight Board’s new quality control standard, which will require all registered public accounting firms to identify specific risks to their practices and design a quality control system to monitor and resolve ineffective controls.

Institutional Shareholder Services, one of the leading proxy advisory firms, uses its Annual Global Benchmark Policy Survey to gauge investor and other stakeholder interests and market sentiment. 

There is still time to submit responses to Glass Lewis’s 2024 Policy Survey, which the proxy advisor uses to gauge investor and other stakeholder interests and market sentiment. Since Glass Lewis selects the questions, the policy survey also indicates the advisor’s areas of policy focus. In this blog post, we identify a few highlights from the Executive Compensation portion of the survey we think practitioners should be tracking.

The SEC adopted a final rule requiring additional prospectus disclosures in SPAC IPOs and de-SPAC transactions, effective July 1, 2024, as well as mandatory iXBRL tagging of such information disclosed pursuant to new Item 1600 of Regulation S-K, effective June 30, 2025.

On August 20, 2024, the U.S. Securities and Exchange Commission (SEC) announced an increase to the registration fee payable in connection with a public offering of securities.

As expected, a flurry of briefs from state attorneys general, the Securities and Exchange Commission (the SEC), and amici curiae have been filed with the 8th Circuit Court of Appeals as the climate rulemaking case makes its way through the courts.

On August 15, 2024, the IRS announced a second Employee Retention Credit (ERC) Voluntary Disclosure Program available to certain employers who wish to self-report that they erroneously received credits for the 2021 tax year. 

Nasdaq has several rules that address the delisting of companies whose share price falls below $1.

The U.S. Department of Justice recently succeeded in its prosecution of former Ontrak CEO Terren Peizer for insider trading, which involved the misuse of his 10b5-1 trading plan. This post provides an overview of the case’s background and outcome, and highlights key lessons that directors and officers of public companies should consider.