Tag Archives: SEC

ILN Today Post

SEC response to coronavirus outbreak

In response to the continued spread of the coronavirus in the United States, the Securities and Exchange Commission (SEC) issued an order on March 4, 2020, providing conditional regulatory relief to publically traded companies that may have been affected by the coronavirus. Subject to certain conditions, the SEC’s order provides qualifying companies an additional 45 days to file certain required reports that otherwise would be due between March 1, 2020 and April 30, 2020. Read more…

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ILN Today Post

There’s a New Economic Sanctions Sheriff in Town: the SEC

In recent years, the U.S. Securities and Exchange Commission appears to be taking a more active role in a regulatory area for which it is not traditionally associated: economic sanctions. So far this year, the SEC has sent comment letters to several major public companies, including PayPal and The Bank of New York Mellon, inquiring about business activities related to U.S. Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) economic sanctions.

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An Overview of the SEC’s “Regulation Best Interest” and Form CRS

Broker-dealers (“BDs”) should be aware that, on June 5, 2019, the SEC adopted “Regulation Best Interest” (“Reg BI”), which requires BDs and their registered representatives (“RRs”) to “act in the best interest of the retail customer,” when “making a recommendation” regarding “a securities transaction or investment strategy.”  In addition, the SEC’s new rules require BDs to deliver Form CRS relationship summaries (“Form CRS”) to retail customers.  BDs will need to be in compliance with Reg BI and Form CRS, which were accompanied by more than 1,000 pages of explanation, by June 30, 2020.   On August 7, 2019, FINRA issued Notice 19-26, which informed BDs and RRs of the need to comply, but offered no guidance on compliance.  This post summarizes some of the key aspects of Reg BI and Form CRS.

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SEC Issues Largest Dodd-Frank Whistleblower “Bounty” Awards Ever

On March 19, 2018, the SEC issued an Order jointly awarding two whistleblowers more than $49 million, and awarding a third whistleblower more than $33 million, for reporting information to the SEC that led to its successful prosecution of an enforcement action against the perpetrators of securities violations.

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Dodd-Frank Act Protects Whistleblowers Reporting Violations to the SEC – Employment Law This Week

Featured on Employment Law This Week: Supreme Court: Dodd-Frank Protections Are Limited

Dodd-Frank whistleblower protections are limited – The Supreme Court has ruled that whistleblower protections under the Dodd-Frank Act apply only to those who report violations to the SEC. The Act protects whistleblowers from termination, demotion, and harassment. People who report to the SEC, other regulatory or law enforcement agencies, or to company management are still protected under the 2002 Sarbanes-Oxley Act. Dodd-Frank’s anti-retaliation provision permits whistleblowers to recover double back pay damages – Sarbanes Oxley does not.

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U.S. Supreme Court Settles Circuit Split: Dodd-Frank’s Anti-Whistleblower Retaliation Protections Do Not Extend To Employees Who Do Not Report To The SEC

On February 21, 2018, the U.S. Supreme Court resolved a circuit split and ruled in Digital Realty Trust, Inc. v. Somers that Dodd-Frank’s anti-whistleblower retaliation provision (15 U.S.C. § 78u–6(h)) does not protect employees who report alleged securities violations only to their employers, and not to the SEC.

 

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ILN Today Post

SEC Renews its Focus on Fake News

Compliance Week Interviewed Stradling shareholder Kathleen Marcus, co-chair of the Enforcement Defense & Investigations practice group and chair of the Compliance & Corporate Governance practice group, for an article about the SEC’s recent enforcement actions in this arena. Marcus commented that some of the firm’s clients have fallen “victim to fake websites that are putting out false information. It has actually been what I would refer to as a ‘bear attack.’ They have a short position in the stock and are leaking false negative information into the market in order to cause a temporary drop in the stock price so they can take advantage of their short position.” To combat this issue, Marcus recommends that companies have only a few designated people who can speak on its behalf, thus limiting the risk if all personnel understand the policy.

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SEC Continues Aggressive Oversight of Separation and Confidentiality Agreements

Last August, we reported on two significant cease-and-desist orders issued by the SEC that, for the first time, found certain language in the confidentiality and release provisions of separation agreements to violate the SEC’s Rule 21F-17(a), which precludes anyone from impeding any individual (i.e., a whistleblower) from communicating directly with the agency.[1] Since then, the SEC has continued its aggressive oversight of separation and confidentiality agreements, with substantial repercussions for some employers. These orders, a select number of which we summarize here, have companies engaging in a serious review and rethinking of their confidentiality restrictions and other relevant provisions in their agreements and handbooks, and considering whether and what remedial steps to take proactively to cure any issues with the language in these key documents.

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Looking Ahead: Executive Compensation for Financial Services in a Trump Administration

A month into the Trump presidency, there have been a number of important statements from the executive branch on the regulation of executive compensation impacting the financial services industry. On February 3, 2017, President Trump issued a statement on the core principles for regulating the U.S. financial system (“Core Principles”). The statement requires the Treasury and all heads of member agencies of the Financial Stability Oversight Council to report within 120 days (by June 3, 2017) all existing laws, treaties, guidance, regulations, etc., that promote the Core Principles, and all such laws, etc., that inhibit the Core Principles. The Core Principles provide some insight into future regulation or repeal efforts by the Trump administration impacting executive compensation.

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ILN Today Post

More jurisdictions considering taking high CEO compensation

Last December, Portland, Oregon became the first city in America to pass an ordinance imposing an additional tax on the compensation of any chief executive officer of a publicly traded company doing business in Portland whose compensation is more than 100 times that of a median worker’s compensation. The ordinance, which affects about 550 firms, calls for a 10 percent surtax when the pay ratio of CEO to median worker is between 100 to 1 and 250 to 1. When that ratio exceeds 250 to 1, the surtax increases to 25 percent. We detailed the law in our December 22, 2016, article.
As we noted, the surtax was made possible in the first place by a 2015 Securities and Exchange Commission (SEC) rule requiring public companies to disclose the ratio of the compensation of their CEO to median employee compensation. The rule requires companies to disclose the ratio of the median annual total compensation of all employees, excluding the CEO, to the annual total compensation of the chief executive officer.
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