Category Archives: Securities and Exchange Commission

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New Effort to Exempt Crypto Currency from Certain SEC, Tax and Other Regulatory Burdens

A new bill, the Token Taxonomy Act was introduced to congress to amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security, to direct the Securities and Exchange Commission to enact certain regulatory changes regarding digital units secured through public key cryptography, … Continue Reading

United States Supreme Court Holds That Knowing Dissemination of False Statements Made by Others Can Constitute Primary “Scheme Liability” In Violation of Rule 10b-5(a) and (c)

In Lorenzo v. Securities & Exchange Comm., No. 17-1077, 2019 WL 1369839 (U.S. Mar. 27, 2019), the Supreme Court of the United States (Breyer, J.) held that an individual who did not “make” a false or misleading statement within the meaning of Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135 (2011) (blog article … Continue Reading

With the SEC, Cooperation is Key

As an expensive “slap on the wrist,” the Securities and Exchange Commission (“SEC” or the “Commission”) recently concluded that approximately $12.7 million worth of funds raised in a 2017 Initial Coin Offering (“ICO”) by Gladius Network LLC (“Gladius”) were part of an unregistered securities offering, and all proceeds must be returned to investors. However, the … Continue Reading

SEC Issues New Guidance on Diversity Disclosure Requirements

On February 6, 2019, the Securities and Exchange Commission released two Compliance and Disclosure Interpretations (CDIs) discussing disclosure requirements in instances where a director or board nominee self-identifies specific diversity characteristics, such as race, gender, ethnicity, religion, nationality, disability, sexual orientation and cultural background.… Continue Reading

Expansion of Regulation A to Reporting Companies: Increased Alternatives Now Available to Public Companies Seeking to Raise Capital or for Mergers and Acquisitions

On December 19, 2018, the SEC announced that it had adopted final rules that allow reporting companies to rely on the Regulation A exemption from registration for their securities offerings.[1] Until recently, the only way that companies subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934 … Continue Reading

The Effects of the SEC Shutdown on the Capital Markets

Although EDGAR continues to accept filings, the government shutdown has now eclipsed its 28th day and the SEC continues to operate with limited staff which is having a crippling effect on the ability of many companies to raise money in the public markets. This is particularly due to the fact that the SEC is unable … Continue Reading

Regulation A May Prove Useful Alternative to Form S-4 Registration for Public Companies Doing Smaller M&A Deals

Last month, the U.S. Securities and Exchange Commission (“SEC”) announced it had adopted final rules to amend certain parts of Regulation A[1] promulgated under the Securities Act of 1933 (“Securities Act”). These new rules implement changes as directed by the Economic Growth, Regulatory Relief, and Consumer Protection Act[2] signed into law on May 24, 2018 … Continue Reading

Airdrop of Crypto Tokens Hits Regulatory Flak

On August 14, 2018, the U.S Securities and Exchange Commission (“SEC”) issued a cease and desist order (the “Tomahawk Order”) against Tomahawk Exploration LLC (“Tomahawk”) and David Thompson Laurance (“Laurance”) for their actions in connection with an initial coin offering of digital assets called “Tomahawkcoins” or “TOM” (the “Tomahawk ICO”). Tomahawk and Laurance’s actions were … Continue Reading

“Airing Out the Denny Crane Room”: Recent SEC Action Emphasizes Need for Effective Disclosure Controls and Procedures for Executive Perquisites

Last month, Energy XXI, Ltd. (“EXXI”), a publicly-traded oil and gas exploration company, saw its former Chief Executive Officer charged with various securities law violations by the Securities and Exchange Commission (“SEC”). The SEC seeks to have the CEO pay civil money penalties and be barred from any officer or director role with any issuer … Continue Reading

SEC Approves Updated Disclosure Requirements

On August 17, 2018, the Securities and Exchange Commission (SEC) approved amendments to certain of its disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, U.S. generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), or changes in the information environment. These changes include amendments … Continue Reading

New Law Requires SEC to Expand Regulation A+ To Exchange Act Reporting Companies

On May 24, 2018, President Donald J. Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Act”). The Act, which primarily focuses on rolling back certain regulatory provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, also contained a significant change in the law for companies … Continue Reading

SEC Takes Baby Steps on Cyber, but Signals Greater Vigilance

On February 21, the Securities and Exchange Commission issued new Interpretive Guidance regarding disclosures of cybersecurity-related information by publicly traded companies. This guidance comes in the context of public pressure on the SEC to update its 2011 Division of Corporation Finance guidance regarding cybersecurity risks and incidents. According to SEC Chairman Jay Clayton’s statement, this … Continue Reading

SEC Approves New Audit Reporting Standard Requiring Auditors to Disclose More Detailed Information Learned During the Audit

On October 23, 2017, the Securities and Exchange Commission approved the Public Company Accounting Oversight Board’s (“PCAOB”) proposal to adopt a new auditing standard, AS 3101. AS 3101 will require auditors to disclose more detailed information about what they learn during the course of an audit. This new auditing standard requires a major revision in … Continue Reading

The SEC and ICOs: Putting the SEC’s Determination that DAO Tokens are Securities in Context

On July 25, 2017, the U.S. Securities and Exchange Commission (“SEC”) issued a report (“Report”) detailing its investigation into whether the DAO (an unincorporated “decentralized autonomous organization”), Slock.it UG (“Slock.it”), Slock.it’s co-founders, and intermediaries violated the federal securities laws. The SEC determined that the tokens issued by the DAO are securities under the Securities Act of 1933 (“Securities … Continue Reading

SEC Adopts Rule Requiring Hyperlinks to Exhibits and HTML Formatting

On March 1, 2017, the Securities and Exchange Commission (“SEC”) announced the adoption of amendments that will require registrants that file certain registration statements and reports subject to the exhibit requirements of Item 601 of Regulation S-K (i) to include within each filing a hyperlink to each exhibit referenced therein and (ii) to submit all … Continue Reading
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