Category Archives: Compliance

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Senate Passes Modified JOBS Act – Regulatory Reform for Small and Emerging Growth Companies Speeds Closer to Fruition

By Sheppard Mullin on Posted in Capital Markets, Compliance, Disclosure, Emerging Companies, Venture Capital
On March 22, 2012, the Senate passed the Jumpstart Our Business Startups (JOBS) Act by a vote of 73-26. The House of Representatives passed the JOBS Act on March 8, 2012 by a vote of 390-23. The Senate bypassed its typical committee process to rush the bill to a floor vote. Legislators in both parties … Continue Reading

The March Towards Meaningful Reform for Small and Emerging Growth Companies Moves Forward – House Passes Measures to Open Private Capital Raising and Facilitate an On-Ramp of New IPOs

By Sheppard Mullin on Posted in Capital Markets, Compliance, Corporate Governance, Emerging Companies, Venture Capital
Building on months of momentum in Congress, on March 8, 2012, the U.S. House of Representatives passed the Jumpstart Our Business Startups (JOBS) Act by a bi-partisan vote of 390-23. A similar bill, S. 1933, has been introduced in the Senate and may be voted on this month. The JOBS Act is intended to address … Continue Reading

California Transparency in Supply Chains Act

By Sheppard Mullin on Posted in Compliance
As we noted in a previous post, on January 1, 2012, the California Transparency in Supply Chains Act of 2010 (the "Act") will become effective. This legislation will require every large retailer and manufacturer doing business in California to publicly disclose whether it has taken specified actions to eliminate slavery and human trafficking from its … Continue Reading

SEC Fee Rate Adjustment for Section 6(B), Section 13(E) and Section 14(G) To Be Effective October 1, 2011

By Sheppard Mullin on Posted in Compliance, Corporate Governance
Public companies and companies registering to go public should be aware of fee rate adjustments made by the Securities and Exchange Commission that will be effective as of October 1, 2011. We originally reported on this increase on September 6, 2011. The following fee rates will be affected by the adjustment:… Continue Reading

Lower Filing Thresholds for HSR Act Premerger Notifications and Interlocking Directorates Announced

By Sheppard Mullin on Posted in Compliance, Investigations and Enforcement, Mergers & Acquisitions
1. Lower Thresholds For HSR Filings On January 19, 2010, the Federal Trade Commission announced revised, lower thresholds for premerger filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The filing thresholds are revised annually, based on the change in gross national product. For the first time, the thresholds have been reduced. They will be … Continue Reading

First SEC enforcement action under Regulation G for Misleading Non-GAAP Financial Measures

By Sheppard Mullin on Posted in Compliance, Corporate Governance, Investigations and Enforcement
On November 12, 2009, the SEC announced that it had settled charges against SafeNet, Inc. and some of its former officers, employees and accountants, in connection with earnings management and options backdating schemes. This case represents the SEC’s first enforcement action brought under Regulation G, and it provides important reminders to issuers on financial reporting … Continue Reading

E-Proxy Rules Effective for All Public Companies

By Sheppard Mullin on Posted in Compliance
In 2007, the SEC adopted amendments to its proxy rules that would require reporting companies and other persons soliciting proxies to post their proxy materials on a publicly accessible Internet website and provide shareholders with a written notice of the Internet availability of the proxy materials, except in connection with a business combination.  Large accelerated … Continue Reading

Parties May Elect Appellate Review For Arbitration Awards

By Sheppard Mullin on Posted in Compliance
Although the advantages and disadvantages of arbitration will continue to be debated, the California Supreme Court has now provided parties with an option that makes arbitration more attractive.  Previously, one of the chief disadvantages of arbitration was that there was only restricted appellate review of any factual or legal error the arbitrator may have made.  … Continue Reading

California Supreme Court Disapproves “Narrow Restraint” Exception For Covenants Not To Compete; Holds General Waivers Should Not Be Interpreted To Waive Non-Waivable Rights

By Sheppard Mullin on Posted in Compliance
In Edwards v. Arthur Andersen LLP, the California Supreme Court reaffirmed California’s strong public policy against covenants not to compete.  The primary issue in the case was whether the Ninth Circuit’s "narrow restraint" exception was a proper interpretation of California law.  Under the narrow restraint exception, employers could enforce non-competition agreements that did not "entirely … Continue Reading

Automatic Shelf Registration Statements

By Sheppard Mullin on Posted in Compliance
Since December 1, 2005, issuers qualifying as well known seasoned issuers (WKSIs) have been able to file shelf registration statements with the SEC on Form S-3 or F-3 which become effective immediately upon filing. In addition, a primary offering by an issuer can now be made under such a shelf registration statement immediately following its … Continue Reading

Arbitrators, not Courts, Decide the Validity of Arbitration Clauses

By Sheppard Mullin on Posted in Compliance
The U.S. Supreme Court has ruled that arbitrators, not courts, decide the validity of contracts that include arbitration clauses (“Buckeye Check Cashing Inc. v. Cardegna”). The ruling is a victory for those financial services providers that include clauses regarding disputes to be heard before industry-oriented arbitration panels, and will make it harder for consumers to … Continue Reading

IRS Suspends Section 409A Reporting and Withholding Requirements for 2005

By Sheppard Mullin on Posted in Compliance
The IRS released Notice 2005-94 suspending employer reporting and wage withholding requirements for deferred compensation under IRC Section 409A for calendar year 2005. The Notice does not affect FICA or other employer withholding and reporting obligations. Future IRS guidance may require employers to furnish corrected information returns and payee statements reporting any previously unreported amounts … Continue Reading

Deferred Compensation: Section 409A Action Steps for 2005

By Sheppard Mullin on Posted in Compliance
In September 2005, the IRS issued proposed regulations under Section 409A of the Internal Revenue Code, which expand upon existing guidance and, in some ways, interpret Section 409A more favorably for taxpayers than previous guidance. Companies must comply in good faith with Section 409A during 2005 and 2006. Employers may rely on the proposed regulations … Continue Reading

Time to Establish a Deferred Compensation Action Plan

By Sheppard Mullin on Posted in Compliance
Less than six months remain until the December 31, 2005 deadline for amending deferred compensation arrangements to comply with Section 409A of the Internal Revenue Code. These complex new rules were enacted for nonqualified deferred compensation arrangements in late 2004 and are effective for 2005, although IRS guidance so far has been limited. While awaiting … Continue Reading

SEC Begins Releasing Comment Letters and Responses

By Sheppard Mullin on Posted in Compliance
On May 12, 2005, the SEC began releasing comment letters of the staff relating to filings reviewed by the Division of Corporation Finance and the Division of Investment Management, as well as the responses of the filers. The process commenced with filings made after August 1, 2004. Comment letters and responses will be released through … Continue Reading
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