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“Lead Independent Director” Or “Presiding Director”?

Neither California nor Nevada require that a corporation have either a “lead independent director” or “presiding director” and yet many corporations state that they have such a position.  Why? Item 407(h) of Regulation S-K requires that if one person serves as both principal executive officer and chairman of the board, a company must disclose whether it has a “lead…

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Qualification Of Offers And Sales Of Non-Voting Common Stock Is No Snap In California

In March, Snap Inc. announced that it and the selling stockholders had sold of 230 million shares of Class A Common Stock to the public at an initial public offering price of $17.00 per share.  The gross proceeds of the offering to the company and its selling stockholders was $3.91 billion. Even successful offerings have…

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Three Considerations For Drafting A Code of Business Conduct

Although the Securities and Exchange Commission does not require that a company adopt a code of business conduct and ethics, I would be very surprised to hear of an SEC reporting company that has not adopted such a code.  Item 406 of Regulation S-K requires a reporting company to disclose whether it has “adopted a code of ethics…

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Really? Requiring Someone To Use Information “Fairly And Lawfully” Can Be Illegal?

Companies have lots of very good reasons for adopting codes of conduct.  These reasons include: Ensuring compliance with applicable exchange listing rules (e.g., NYSE Rule 303A.10 and NASDAQ Rule 5610); Minimizing the risk of securities law violations (e.g., Regulation FD and Rule 10b-5); Protecting company assets (trade secrets as well as reputational assets); Complying with contractual obligations requiring confidentiality;…

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Did The SEC Really Have Good Cause To Grant Accelerated Approval Of Amendments To NYSE Rule 452?

On September 9, 2010, the Securities and Exchange Commission granted accelerated approval of the New York Stock Exchange’s proposed amendments to Rule 452.   Echoing the Queen of Hearts (“Sentence first – verdict afterwards”), the SEC at the same time announced that it was soliciting comments on the “proposed” rule change.  The NYSE proposed the rule to meet…

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