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CALIFORNIA CORPORATE & SECURITIES LAW

The SEC’s Flawed Changes To Exchange Act Forms

Title I of the Jumpstart Our Business Startups (aka JOBS) Act amended the Securities Act and the Exchange Act to provide some regulatory relief to issuers that qualify as an “emerging growth company”.  Recently, the Securities and Exchange Commission adopted various changes to its forms and rules to conform to Title I.  The SEC elected not to comply with the notice and…

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Exactly What Part Of “To The Commission” Is Ambiguous?

The Dodd-Frank Act gave us many things, including Section 21F of the Securities Exchange Act of 1934.  Section 21F, prohibits employers from retaliating against a “whistleblower”.  15 U.S.C. § 78u-6(h)(1)(A).  We need not guess about the definition of “whistleblower” because Congress conveniently provided the following definition: . . . any individual who provides, or 2 or more…

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Will Congress Deep Six The SEC’s Resource Extraction Rule?

In December of last year, I wrote about how the Securities and Exchange Commission’s Resource Extraction Rule might meet an untimely end.  See There’s Still Time For Congress To Void The SEC’s Resource Extraction Rule (Dec. 14, 2016).  The rule, Rule 13q-1 and an amendment to Form SD, had an extraordinarily difficult birth: Congress had ordered…

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How Independent Is The SEC And How Independent Should It Be?

Can the President say “You’re Fired!” to an SEC Commissioner? In a recent post, John Jenkins emphasized the commonly held understanding that the Securities and Exchange Commission is an “independent agency”.  The independence of the SEC, however, is not beyond debate.  In Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 546 (2010), Justice Stephen G.…

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Is This SEC Claim False And Misleading?

Last week, the Securities and Exchange Commission announced yet another whistleblower award.  According to the SEC, the award totals more than $5.5 million dollars.  Tellingly, we don’t, and won’t, know the exact amount.  The headline to the SEC’s press release pegs the number at $5.5 million while the order itself reads: Claimant shall receive an award of [Redacted] percent [Redacted]…

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10th Circuit Holds SEC ALJs Are Holding Office Unconstitutionally

In March 2015, I posed the following question: But if you were hailed before an unconstitutional tribunal with the ostensible authority to fine you and bar you from working, would you want a “real” court to step in and consider the constitutionality of the proceedings? Since raising that question, several respondents in administrative proceedings brought by…

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Five Propositions Concerning The SEC Whistleblower Program

Congress, not the Securities and Exchange Commission, established the whistleblower program six years ago as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  As the program has awarded over $100 million to date, it merits a critical analysis and review. Accordingly, I propose the following five propositions for consideration and debate: The whistleblower program…

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Will New Rule 147A Lead To A Renaissance In California Permit Applications?

Yesterday, the Securities and Exchange Commission adopted a new intrastate offering exemption under the Securities Act of 1933.  Significantly, new Rule 147A will have no restrictions on offers and will not require that an issuer be organized in the state in which the intrastate offering is being conducted.  I was pleased to see that the adopting release cited…

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When The SEC Became A Real Estate Regulator

For at least a century, it has been said that only three things matter in real estate: location, location, location.  Recently, the Securities and Exchange Commission took this old saw to heart in the context of disclosure of non-GAAP financial measures.  The SEC’s fixation on location began this past May when the staff updated its Compliance and Disclosure Interpretations…

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“Tandy Letter” Requests – RIP

Broc Romanek reported yesterday that the staff of the Securities and Exchange Commission will no longer require “Tandy Letter” disclaimers in responses to staff comments.   Among other things, the Tandy Letter policy required a company to state affirmatively that it would not raise the SEC review process and acceleration of effectiveness as a defense in any legal proceeding. …

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