ON Securities

On December 16, 2009, the SEC adopted its amendments to the proxy disclosure rules – see the press release and the full 129-page release that includes the text of the rules. The release has led to some confusion about when the new rules are effective – the release mentions an effective date of February 28, 2010, but it does not specify exactly what that means. I agree with Mark Borges in the Proxy Disclosure Blog (subscription site), who assumes that the amendments apply to proxy statements and other applicable filings on or after that date. . . . In my last post, I mentioned one of the “sleepers” in the rules. But I think there may be another one. . . . [to read more, click on the link above]

As many of you know, the SEC announced yesterday that it will hold an open meeting on Wednesday, December 16 for the purpose of adopting its proposed amendments to the proxy disclosure rules. . . . The two questions on everyone’s mind: When will the rules be effective? And what changes will the SEC make to the proposals? . . . . Assuming the final rules are similar to the proposals, many public companies will be busy over the next few weeks preparing for the new disclosures. . . . . There are some “sleepers” too . . . .[to read more, click on the link above]

As I reported previously, the SEC enforcement staff is “loaded for bear,” stepping up its enforcement activities to go after violations of the securities laws. Some recent stories reinforce that it is more important than ever to guard against these violations . . . . The Wall Street Journal reported on Wednesday that the SEC has greatly expanded its insider trading investigations of broker-dealers and hedge funds . . . . There is no reason to think that the current investigations are limited to broker-dealers and hedge funds, and the trail could easily lead the SEC staff to company personnel. . . . [to read more, click on the link above]

I’ve just finished three and a half very interesting days at the NASPP Annual Conference and the Proxy Disclosure Conference sponsored by CompensationStandards.com in San Francisco. Aside from an unexpectedly big crowd and some great food, attendees encountered some interesting updates. . . . Shelley Parratt, Director of Corporation Finance of the SEC, addressed the group, and there were two main news items. First, she previewed the currently proposed amendments to the proxy disclosure rules. She didn’t address when the amendments would be considered, but stated that the new rules “may well” be in place for the 2010 proxy season . . . . Second, apart from the new rules, Parratt discussed compliance with the proxy disclosure rules adopted in 2007 and indicated that the SEC staff will take a more assertive (aggressive?) posture in its comment process. . . .[to read more, click on the link above]

Early November finds us in a kind of limbo – those of us who advise public companies on governance and compensation matters are waiting for something big to happen. But there’s plenty of smaller stuff to report on – although most of these items present more questions than answers . . . . On November 4, SEC Chairman gave a speech addressing current regulatory developments. She described the proxy disclosure rules but did not address when they would be adopted or considered. . . . Rep. Maxine Waters has proposed an amendment to the Investor Protection Act of 2009 . . . . [to read more, click on the link above]

The news today was filled with reports on the first anniversary of the collapse of Lehman Brothers. . . . At around the same time, our local chapter of the National Association of Stock Plan Professionals (NASPP) produced a webcast/conference call entitled “Troubled Company, Workout and Bankruptcy Issues: A little ‘gloom and doom’ with your morning java.”. . . Just to keep on sharing the “gloom and doom”, we have made the transcript available – it makes interesting reading. Topics included . . . SEC Enforcement Follow-Up . . . . On Monday, as described in this New York Times article, Federal District Judge Jed Rakoff issued a scathing order (see the link in the Times article) that voided Bank of America’s $33 million settlement with the SEC. . . . [to read more, click on the title above]

I spoke this week at a Minnesota CLE Conference on the topic of how public companies can avoid liability for their disclosures. In preparing my remarks, it struck me that the SEC is “loaded for bear” in going after public companies and their officers with investigations and enforcement proceedings. . . . Recent examples, just during July and August of 2009 . . . . [to read more, click on the title above]

There have been several recent articles on the SEC’s proposed proxy access rule, Rule 14a-11. . . . A Wall Street Journal article last week (subscription required for full article) reported that “. . . the measure looks like it will be passed by the Securities and Exchange Commission in November.” . . . . However, this post by Dave Lynn in the Corporate Counsel blog last Friday puts the proposal’s status in perspective and raises doubts that shareholder access is a “done deal”. . . . [to read more, click on title above]

The SEC’s recent clawback action against Maynard Jenkins, the former CEO of auto supplier CSK Auto Corporation, has gotten more commentary than just about any other recent enforcement proceeding I can think of. . . . Much of the negative commentary accuses the SEC of overreaching, in a situation where it could not state an accounting fraud case directly against Jenkins. However, this case is an extreme one . . . . [to read more, click on title above]

As described previously, on July 1, 2009, the SEC approved by a 3-2 vote an amendment to New York Stock Exchange Rule 452 to eliminate broker discretionary voting in uncontested elections of directors. Of all the recent proposals (see the ON Securities Cheat Sheet), this was the first to be adopted, and this change may have the biggest practical impact on corporate governance for most companies. The rule change is effective for shareholder meetings held on or after January 1, 2010, and it is likely to make it more difficult to get affirmative votes in favor of management’s slate of directors. . . .So what should a company do to prepare? . . . . [To read more, click on the Title above.]