Securities Regulation
The SEC issued a report that makes it clear that companies can use social media platforms, e.g. Facebook and Twitter, to announce key information to investors to comply with Regulation Fair Disclosure (Regulation FD) so long as the investors have been alerted about the announcement and which social media outlet being used.
The SEC’s report confirms that Regulation FD applies to social media and other emerging means of communication used by public companies the same way it applies to company websites. In 2008, the SEC issued guidance that clarified that websites can serve as… Read the rest
The United States Court of Appeals for the Fourth Circuit has issued a trio of opinions in 2013 which determine the scope of FINRA’s customer code. The customer code allows customers of FINRA members to initiate arbitration proceedings against a FINRA member.
Background
FINRA is a private self-regulatory organization that has the authority to exercise comprehensive oversight over all securities firms that do business with the public.
FINRA’s Customer Code governs arbitration between customers of FINRA members and FINRA members. (There is also an Industry Code which governs disputes between FINRA members.)
Rule 12200 provides that parties must arbitrate a dispute under the Customer… Read the rest
Recent cases have triggered a growing discussion about the whistleblower protections under the Dodd-Frank Act. Most believe that the regulations under Dodd-Frank are here to stay (at least another four years) now that President Obama has been reelected. With new regulations comes new judicial interpretations of the regulations. These judicial interpretations often broaden or narrow the scope of the regulation and can have profound impacts depending on the nature of the interpretation. In today’s post, we’ve highlighted the general characteristics of the two major whistleblower protections under Dodd-Frank and how recent cases have expanded… Read the rest
Last week we wrote about Greenlight Capital’s lawsuit against Apple Inc. The hedge fund manager David Einhorn filed the lawsuit to contest Apple’s proposition to eliminate the board’s ability to issue preferred shares without shareholder approval. Today, Apple CEO Tim Cook called the lawsuit a “silly slideshow” while speaking at a Goldman Sachs investor conference.
Cook noted that the disagreement between Einhorn and Apple stems from a proposal on Apple’s proxy statement which it filed with the SEC in December. The crux of the dispute centers around how to issue preferred stock and who is able to approve new shares.… Read the rest
We’re following up Thursday’s post about Apple’s attempt to prohibit the company from being able to authorize preferred stock by amending its charter documents with this post, which discusses some of the general characteristics of preferred stock and some of the key terms that affect the value of preferred stock.
General Characteristics of Preferred Stock
Preferred stock is often considered a hybrid security as it offers features of both bonds and common stock. For example, preferred stock is like a bond in that it typically has a fixed-percentage dividend, and it is… Read the rest
According to a proxy statement issued by Apple Inc., the computer (and mobile device) giant has announced that it does not intend to issue preferred stock in the future and believes it is appropriate to eliminate an existing provision permitting the issuance of preferred stock at its discretion. The proposed amendment to the company’s governing documents would require Apple to seek shareholder approval prior to issuing any preferred stock in the future.
Greenlight Capital Inc.’s David Einhorn is protesting the amendment. Read the rest
Yesterday, President Obama named Mary Jo White, the first female United States attorney in Manhattan, to the head the Securities and Exchange Commission (SEC). Many believe that the appointment of White, a former prosecutor and the first prosecutor to head the SEC, signals a renewed resolve to hold Wall Street accountable for any wrongdoing. White is well-known for her aggressive prosecution tactics.
White spent more than a decade as a federal prosecutor in New York City, where she pursued white-collar crime and Wall Street fraud. One of her… Read the rest
The stock market improved in 2012 and the demand for federal shareholder lawsuits slowed down. Coincidence? I think not. The better the market is performing, the happier shareholders will be.
A new study by Cornerstone Research reports that 152 federal class-action securities lawsuits were filed in 2012. This number of cases is well below the average of 193 suits in the prior 15 years, and significantly less than the 188 cases in 2011. According to the study, the drop in lawsuits was consistent across a broad spectrum of legal areas. For example,… Read the rest
I read a Wall Street Journal article today about the recent investigation into websites claiming to be crowdfunding platforms. Of the reported 9,000 websites that contain the word “crowdfund” in their website names, the North American Securities Administrators Association (NASAA)—the organization that represents state securities regulators—has investigated roughly 2,000, and plans to give a closer look at 200 of those.
Why the investigation in the first place? Well, many securities regulators are concerned… Read the rest
The Securities and Exchange Commission (SEC) released its annual financial report recently. At various points throughout the report, the SEC notes that it has worked and will continue to work to implement the JOBS Act in a quick, pragmatic manner. Also, the report points out that the SEC will attempt to maintain the congressional intent behind the Act in its rulemaking.
The Commission stated in its Management Discussion and Analysis report that it will work to implement the JOBS Act in a “practical… Read the rest
