09/18/2014 - The SEC Continues its “Broken Windows” Initiative with Charges of Late Filings of Ownership Reporting and Rule 105 Violations
In the last week, the Securities and Exchange Commission has announced charges in two separate investigations related to its “Broken Windows” initiative, signaling that the Commission’s focus on what some may characterize as “minor violations” will continue.
06/26/2014 - Law360 Guest Article: 4th Circ. Decision May Expand SEC’s List Of Defendants
Since the 2011 U.S. Supreme Court decision in Janus Capital Group Inc. v. First Derivative Traders, 131 S. Ct. 2296 (2011), the U.S. Securities Exchange Commission’s Enforcement Division operated under the assumption that only the “maker” of a statement could be charged in an enforcement action for false or misleading statements under Section 10(b) of the Exchange Act.
05/30/2014 - Directors Beware: ISS Urges Ouster of Target’s Directors in the Wake of its Data Breach
Institutional Shareholder Services (“ISS”), a prominent proxy adviser, has issued a report urging Target Corporation’s shareholders to oust seven of the company’s directors for “failure to provide sufficient risk oversight” on cybersecurity.
05/22/2014 - Fourth Circuit Holds that Criminal Enforcement of Rule 10b-5 Violation is not Limited to “Makers” of Statements
On May 7, the Fourth Circuit held that the Supreme Court’s decision in Janus Capital Group, Inc. v. First Derivative Traders,
131 S. Ct. 2296 (2011), did not apply in the context of a criminal prosecution for a violation of Rule 10b-5.
05/21/2014 - Defining Foreign Government and Foreign Officials under the FCPA
Under the Foreign Corrupt Practices Act (the “FCPA”), it is unlawful for companies to bribe or make corrupt payments to officials of foreign governments or of any “instrumentality” thereof.
01/28/2014 - Securities Litigation Year in Review 2013
The Haynes and Boone Securities Litigation Year in Review 2013
outlines recent (and upcoming) Supreme Court decisions as well as notable rulings from federal courts of appeal and district courts in the past year that affect private securities litigation, including the areas of class certification, loss causation, scienter, duty to disclose, pleading falsity, preemption, standing and statutes of limitations. The Review also discusses government enforcement cases and trends, and key state law rulings in shareholder derivative and fiduciary litigation.
10/09/2013 - SEC's $14 Million Award Highlights the Importance of Effectively Responding to Internal Whistleblower Reports
After two years of operations, the SEC’s whistleblower program announced its first multimillion dollar award - a record $14 million payment to an anonymous tipster. The award is the largest of three announced since the program’s inception and emphatically signals the SEC’s continuing emphasis on its whistleblower program.
04/23/2013 - SEC and DOJ Resolve Parallel FCPA Investigations through Dual Non-Prosecution Agreements
This week, the Ralph Lauren Corporation became the first company to obtain a non-prosecution agreement from the Securities and Exchange Commission in connection with a Foreign Corrupt Practices Act (“FCPA”) investigation.
01/31/2013 - PCAOB Auditing Standard No. 16 Outlines Requirements for Communications between Audit Committees and Auditors
The Public Company Accounting Oversight Board (“PCAOB”) recently issued Auditing Standard No. 16, Communications with Audit Committees
(“Standard 16”), to provide a framework for the discussions that an auditor must undertake with the audit committee of its public company clients.
11/20/2012 - DOJ and SEC Release Long-Awaited FCPA Resource Guide
On November 14, 2012, the Department of Justice and the Securities and Exchange Commission released the much-anticipated Resource Guide to the U.S. Foreign Corrupt Practices Act (the “Guide”).
11/15/2012 - What to Do When You Receive a FINRA Letter
An overview of answers to questions your company might have if it received a letter from FINRA's Office of Fraud Detection.
06/13/2012 - SEC Announces Examination Strategy for Newly-Registered Investment Advisers
In recent public speeches and correspondence, senior officials at the Securities and Exchange Commission (the “SEC”) have provided details regarding an examination strategy that will be applied to newly-registered investment advisers.
04/16/2012 - “Why Cooperate with the SEC?” Recent Settlements Shed Light
Until recently, individuals considering cooperating with an SEC investigation had a difficult time determining whether a tangible benefit would result from cooperation. Two releases issued by the SEC in the past month demonstrate how the SEC has begun to apply its Cooperation Initiative and give new insight into how the SEC evaluates and credits cooperation in determining sanctions against individuals.
03/27/2012 - Supreme Court Holds That a Failure to File Section 16(a) Disclosures Does Not Toll the Statute of Limitations on Recovery of Short Swing Profits
On Monday, March 26, 2012, the United States Supreme Court issued a decision in Credit Suisse Securities (USA) LLC v. Simmonds.
11/15/2011 - SEC and CFTC Jointly Adopt Form PF
The Securities and Exchange Commission (the “SEC”) and the Commodity Futures Trading Commission (the “CFTC”) recently adopted new rules (the “Rules”) under the Investment Advisers Act of 1940 (the “Advisers Act”), and the Commodity Exchange Act (the “CEA”) that will require registered investment advisers with at least $150 million in private fund assets under management to file Form PF with the SEC.
11/15/2011 - Consumer Financial Protection Bureau Publishes Enforcement Notice
On November 7, 2011, the Consumer Financial Protection Bureau (“CFPB”) announced that it will provide financial companies and individuals who are the subject of potential enforcement actions with an “Early Warning Notice Letter.”
09/28/2011 - Global Risk Management: Elements of an Effective, Defensible FCPA Compliance Program to Prevent Bribery and Corruption
A Legal Update: What You Need to Know About FCPA and Other Anti-Bribery Laws Right Now
09/09/2011 - SEC Abandons Fight on Shareholder Proxy Access Rule
On September 7, 2011, the Securities and Exchange (SEC) announced that it will not appeal the D.C. Circuit’s July ruling in Business Roundtable and Chamber of Commerce of the United States v. SEC,
No. 10-1305, (D.C. Cir. July 22, 2011), where a unanimous panel of the D.C. Circuit vacated Exchange Act Rule 14a-11 requiring companies to give shareholders access to company proxy materials for the nomination of candidates to serve on the company’s board of directors.
06/23/2011 - SEC Extends Investment Adviser Registration Deadline and Adopts Final Rules
On June 22, 2011, the Securities and Exchange Commission (the “SEC”) adopted final rules and amendments under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), that are designed to implement various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).
06/07/2011 - SEC Implements Whistleblower Bounty Program and Protections: Implications for Companies
The Securities and Exchange Commission adopted on May 25, 2011, final rules to implement the Section 21F of the Securities Exchange Act of 1934 entitled “Securities Whistleblower Incentives and Protection.” The new rules have significant implications for public companies and securities industry businesses.
05/19/2011 - SEC Announces First-Ever Deferred Prosecution Agreement
The Securities and Exchange Commission has reached its first-ever deferred prosecution agreement (“DPA”) with Tenaris, S.A., a global supplier of steel pipe products to the oil and gas industry. Tenaris disclosed to the Commission that its employees had engaged in conduct that potentially violated the Foreign Corrupt Practices Act (“FCPA”).
05/09/2011 - SEC Needs more than Transaction-Based Compensation to Prove Broker Activity
A Florida court has rejected the Securities and Exchange Commission’s single-factor transaction-based compensation test for broker activity, perhaps signaling a more favorable view toward “finders” in the future. The court held that an array of non-exclusive factors should be evaluated to determine whether a finder engaged in broker activity.
05/04/2011 - Securities Law 2011: New Trends in SEC Enforcement Involving Public Companies
In this article details critical information that all public companies need to know to navigate today’s heightened regulatory environment.
04/25/2011 - A Rare Court Ruling on Who is a Foreign Official Under the FCPA
A California federal judge issued an opinion on April 20, 2011, providing guidance on an important aspect of the anti-bribery provisions of the Foreign Corrupt Practices Act (“FCPA”) – who is considered a foreign official under the statute.
04/12/2011 - SEC to Consider Extension of Registration Deadlines Applicable to Investment Advisers
In a letter dated April 8, 2011, to the President of the North American Securities Administrators Association (“NASAA
”), Robert Plaze, Associate Director of the Division of Investment Management of the Securities and Exchange Commission (the “SEC
”), stated that the SEC is expecting to adopt final rules implementing various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act
”) applicable to investment advisers by July 21, 2011.
03/08/2011 - Current Developments in SEC Enforcement: The Division’s Efforts in Implementing Changes, Addressing Congressional Contradictions, and Charging Securities Law Violations
This paper, presented by Kit Addleman
at The University of Texas School of Law Conference on Securities Regulation and Business Law, discusses the SEC’s enforcement program results for 2010 and the possible priorities for 2011.
03/03/2011 - SEC Enforcement: Spotlighting Outside Directors
In an action filed this week, the Securities and Exchange Commission (SEC) charged three outside directors of a public company with securities fraud based on their alleged failures to fulfill their roles and responsibilities as Board members. The SEC contends that by their actions and inaction, the outside directors – Jerome Krantz, Cary Chasin, and Gary Nadelman – facilitated and assisted in a massive accounting fraud at DHB Industries, Inc., a body armor supply company.
02/24/2011 - SEC Proposes Private Fund Systemic Risk Reporting on New Form PF
On January 25, 2011, the Securities and Exchange Commission (the “SEC”) proposed new Rule 204(b)-1 (the “Proposed Rule”) under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), that would implement various provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).
02/07/2011 - SEC's Regulation FD Enforcement Actions Bring Compliance Lessons to Light
You and your company might have forgotten about Regulation Fair disclosure (Regulation FD) but the Securities and Exchange Commission (SEC) has not.
02/02/2011 - New FINRA Rule 5131 to Address Abuses in the Allocation and Distribution of IPOs
On November 29, 2010, the Financial Industry Regulatory Authority, Inc. (“FINRA
”) announced that FINRA Rule 5131 will take effect on May 27, 2011. FINRA Rule 5131 is intended to sustain public confidence in the initial public offering (“IPO
”) process by regulating the allocation, pricing and trading of IPOs of equity securities (“New Issues
01/27/2011 - Exemptions From Investment Adviser Registration: The SEC’s Proposed New Rules
Effective as of July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) repeals a key exemption from investment adviser registration currently relied upon by many private fund managers and replaces it with several much more limited exemptions from registration.
12/28/2010 - SEC Proposes New Disclosure and Reporting Requirements for Investment Advisers
On November 19, 2010, the Securities and Exchange Commission (the “SEC”) proposed new rules and amendments to existing rules and Form ADV under the Investment Advisers Act of 1940, as amended (the “Advisers Act”), that would implement various amendments to the Advisers Act contained as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).
12/22/2010 - SEC Enters First Ever Non-Prosecution Agreement With a Cooperating Company
The U.S. Securities and Exchange Commission announced on December 20, 2010, that it entered into a non-prosecution agreement with Carter’s, Inc., an Atlanta-based provider of children’s clothing. This is the first non-prosecution agreement entered since the SEC announced its new cooperation initiative in January 2010 to encourage cooperation from corporations and individuals.
11/10/2010 - SEC Warns Credit Rating Agencies of Increased Fraud Scrutiny
Haynes and Boone Partners Kit Addleman
and Ron Breaux
discuss two recent Securities and Exchange Commission actions focusing on credit ratings agencies.
10/27/2010 - Kit Addleman in Reuters.com: Law empowers SEC to go after more US market players
comments in Reuters.com on a new provision could significantly increase the SEC's force and reach.
10/21/2010 - SEC Proposes Definition of “Family Office”
As part of the ongoing rulemaking initiatives contemplated by the Dodd-Frank Act, the Securities and Exchange Commission recently released a proposed rule defining “family offices” for purposes of an exemption from registration under the Investment Advisers Act of 1940.
10/05/2010 - SEC Postpones Implementation of Shareholder Proxy Access
On October 4, 2010, less than six weeks after approving new rules to facilitate shareholders’ rights to nominate directors, the SEC postponed the effectiveness of the rules. As a result, in the upcoming proxy season companies most likely will not have to address the new shareholder proxy access rules.
09/27/2010 - Compliance Clarified: Addressing The New Proxy Access Rules
In its first substantive rulemaking after Dodd-Frank's passage, the SEC in August approved new shareholder proxy access rules that are scheduled to become effective in November this year and enter into force for the spring 2011 proxy season for all but the smallest companies.
09/07/2010 - SEC Warns Credit Rating Agencies of Increased Fraud Scrutiny
In two actions released last week, the Securities and Exchange Commission (“SEC”) signaled its new focus on credit rating agencies and foretold the seriousness with which it will approach the expanded regulatory authority granted to the SEC by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”).
09/01/2010 - SEC Adopts New Rules to Facilitate Rights of Shareholders to Nominate Directors
Companies are now required to grant proxy access to director nominees submitted by shareholders pursuant to new rules adopted by the
Securities and Exchange Commission (the "SEC") on August 25, 2010.
08/20/2010 - Kit Addleman in Dallas Business Journal: Feds ramp up enforcement in foreign corruption cases
Even though laws against bribing foreign officials in business aren’t new, the Obama administration has ramped up enforcement of the Foreign Corrupt Practices Act prompting North Texas companies with a substantial international presence to get proactive in avoiding violations of the act.
08/04/2010 - The Impact of Dodd-Frank on Public Companies
Haynes and Boone has prepared a summary of significant provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that may have consequences for public companies and their officers and directors, as well as related entities, along with commentary on those provisions.
07/23/2010 - Significant New Registration, Reporting and Regulatory Requirements Imposed on Advisers to Private Funds
On July 21, 2010, President Obama officially signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), which represents the most sweeping regulatory overhaul of the financial markets since the Great Depression. This alert addresses Title IV of the Act, codified as the Private Fund Investment Advisers Registration Act of 2010 (the “Registration Act”).
07/02/2010 - SEC Adopts Pay-to-Play Rules
On June 30, 2010, the Securities and Exchange Commission (the “SEC”) formally adopted Rule 206(4)-5 (the “Pay-to-Play Rule”) under the Investment Advisers Act of 1940, as amended (the “Act”).
06/14/2010 - Court Ruling Endorses SEC’s Power to Seek Clawback of Incentive Compensation from CEO not Accused of Wrongdoing
In a decision of first impression, a federal district court has held that the “clawback” provision of Sarbanes-Oxley permits the SEC to seek reimbursement of incentive-based compensation from CEOs and CFOs of companies that restate their financial statements as a result of misconduct, even if the CEO and CFO had no personal involvement in such misconduct.
04/14/2010 - New Development in Foreign Anticorruption Law: The United Kingdom’s Bribery Act Reaches Far Beyond the British Isles
On April 8, 2010, the United Kingdom adopted The Bribery Act, and all U.S. companies with operations in the U.K., that employ U.K citizens, or that engage in activities involving U.K. facilities or resources, such as British bank accounts, should take note.
02/11/2010 - Current Developments in SEC Enforcement
The Securities and Exchange Commission encountered repeated difficulties in its enforcement and compliance programs during 2009 and is now fighting to keep the SEC alive. This paper discusses current developments in the SEC's enforcement program.
02/08/2010 - Managing Risk: A Guide for Investment Advisers
As an investment adviser, you make your living by predicting, weighing, and ranking risks for your clients. But do you pay equal attention to the risks that you and your firm face? As we leave behind the tumultuous Aughts, now is the perfect time to revisit your compliance policies and internal controls to ensure that you are doing everything possible to safeguard your firm’s future.
01/27/2010 - Federal Court Issues Injunction Requiring Insurer to Advance Defense Costs to Stanford Financial Defendants for DOJ and SEC Proceedings
Yesterday, January 26, 2010, Judge David Hittner of the United States District Court for the Southern District of Texas issued an important opinion in the Stanford Financial case that paves the way for targets of criminal and civil enforcement proceedings to obtain insurance coverage for costs of defending themselves. The decision marks a significant victory for executives who have the misfortune of being caught up in a government prosecution and find themselves otherwise unable to fund their defense.
01/25/2010 - A New Era of Cooperation at the SEC
The SEC’s Division of Enforcement is implementing a series of measures designed to enhance and encourage cooperation in its investigations and litigation and, the Division hopes, expedite the enforcement program.