SEC Adopts Rules to Modernize and Simplify Regulation S-K
On March 20, the SEC announced that it had adopted final rules to modernize and simplify certain disclosure requirements in Regulation S-K.
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What We Do
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Whether you are a start-up seeking growth capital or a large publicly-traded company needing funding for an acquisition strategy, we work to leverage our experience for our clients. We focus on executing transactions quickly and efficiently so our clients obtain the capital they need to bring their business to the next level in the most cost-effective manner possible. Our client representation includes:
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We routinely advise issuers, investors and underwriters/placement agents in connection with a wide range of corporate and commercial financing transactions, including:
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News & Articles
SEC Issues Guidance on Redaction of Exhibits Containing Immaterial, Competitively Harmful Information
On April 1, the SEC issued guidance to assist registrants in complying with the new rules and procedures governing the redaction of exhibits.
SEC Issues Guidance on Board Diversity Disclosure
The SEC recently updated its compliance and disclosure interpretations (CDIs) to provide guidance on what disclosure of directors’ self-identified diversity characteristics is required under Item 401 of Regulation S-K and, with respect to director nominees, under Item 407.
Proposed Legislation Would Mandate Board and C-Suite Diversity Disclosure
The proposed legislation would require any proxy statement relating to the election of directors to include disclosure of certain self-identified diversity characteristics of the company’s directors, director nominees and executive officers.
Director Diversity and Other Board Matters: A Look at the Data
Two new publications by Deloitte and Ernst & Young provide useful data to assist boards in comparing their own composition, views and practices to those of other boards.
Critiquing Stability in the Boardroom
“Corporate boards are very stable. That’s not necessarily a good thing.” So begins an article published late last year in The Wall Street Journal, discussing the findings of the 2018 U.S. Spencer Stuart Board Index.
SEC Enforcement Chiefs Defend Effectiveness of Enforcement Activity During Fiscal 2018
October 30, 2018
SEC Enforcement Division Co-Directors Stephanie Avakian and Steven Peikin recently gave speeches looking back on fiscal year 2018, which ended on September 30 and was their first full fiscal year in office. Both speeches dispute the notion that fiscal year 2018 saw a decline in the SEC’s enforcement activity.
Spotlight on Gender Diversity in the Boardroom Continues to Intensify
The movement to increase the number of women in the boardroom has gained momentum since The Ticker published “Spotlight on Gender Diversity in the Boardroom,” in February.
Release of Commonsense Principles 2.0
On October 18, a group of high profile CEOs and institutional investors released version 2.0 of the Commonsense Principles, a set of corporate governance principles for public companies, their boards and their institutional investors.
SEC Extends Filing Deadlines for Victims of Hurricane Michael, Warns Investors Against Scams
In an October 16 press release, the SEC said that companies hit by Michael will receive an extension on certain filing deadlines.
Tips for Year Two of Pay Ratio Disclosure
With the second year of pay ratio disclosures approaching, most public company counsel will likely feel that the worst is behind them now that they have a process in place and important personnel are up to speed.
The SEC is now Announcing Edgar Outages
In light of recent outages of Edgar’s filing system, this blog post from The Corporate Counsel discusses the SEC’s transparency (and historic lack thereof) with respect to such down time.
SEC Extends Filing Deadlines for Victims of Hurricane Florence; Updated Fees for SEC Filers
September 25, 2018
In a September 19 press release the SEC indicated that companies hit by Hurricane Florence will receive an extension on certain filing deadlines.
Trump Administration’s Agenda Receives Boost as SEC Returns to Full Complement of Five Commissioners; SEC Chairman Cautions Against Reliance on Staff Views
On September 11, the SEC announced that Elad Roisman had been sworn into office as an SEC Commissioner by SEC Chairman Jay Clayton.
Notable Whistleblower Awards; Outcry Against SEC’s Proposed Cap
On September 6, the SEC announced an award of $39 million to one whistleblower and $15 million to another, stating that the whistleblowers’ “critical information and continued assistance helped the agency bring an important enforcement action.”
ISS Releases Summary of Results of its 2018 Governance Principles Survey
On September 18, Institutional Shareholder Services released the results of its 2018 Governance Principles Survey.
Glass Lewis to Incorporate SASB Industry-Specific ESG Guidance in Proxy Analytic Materials
On September 12, proxy advisory firm Glass Lewis issued a release indicating that it will incorporate guidance on material environmental, social and governance matters from the Sustainability Accountability Standards Board in several of its research and advisory products.
SEC Adopts Simplified Disclosure Requirements
August 28, 2018
On August 17, the SEC adopted amendments to Regulation S-K intended to simplify and update disclosure requirements, including disclosure requirements that had become duplicative or outdated.
Expansion of National Security Review of Foreign Investments
On August 13, President Trump signed into law the Foreign Investment Risk Review Modernization Act, which expands the role of the Committee on Foreign Investment in the United States in reviewing national security concerns arising from transactions in which foreign individuals or entities invest in or acquire U.S. businesses.
SEC Expands Companies’ Ability to Issue Securities Pursuant to Compensatory Arrangements, Solicits Public Comment on Further Modernization
On July 18, the SEC announced that it had taken two steps towards allowing companies to more easily pay their employees in stock while still complying with federal securities laws.
SEC Amends Definition of ‘Smaller Reporting Company’
On June 28, the SEC announced that it had voted to amend the definition of “smaller reporting company” to expand the number of companies that qualify for certain existing scaled disclosure accommodations.
SEC Adopts Inline XBRL for Submission of Financial Statement Information, Eliminates Website Posting Requirement
On June 28, the SEC announced that it had voted to amend existing requirements for companies to submit financial statement information in machine-readable format using eXtensible Business Reporting Language.
Help for Audit Committees Overseeing Implementation of New Lease Accounting Standard
June 26, 2018
Many public companies are unprepared for the January 1, 2019, deadline for implementation of the new lease accounting standard.
Coalition Formed to Coordinate Pushback on ESG Activism
The Main Street Investors Coalition was launched in response to the recent shift of institutional investor focus to environmental, social and governance issues.
Using ‘Nudges’ to Promote Ethical Behavior
A recent article in The Wall Street Journal examines the emerging trend of corporate ethics and compliance officers using “nudges” to promote ethical behavior among employees.
Navigating the Controversy Surrounding Record Stock Buybacks
Record-setting stock buybacks following enactment of the Tax Cuts and Jobs Act have riled critics.
Focus on the Handling of Internal Reports of Cybersecurity
Recent SEC activity around cybersecurity has led to increased focus on internal reports of breaches and vulnerabilities and the attendant internal control deficiencies.
DOJ Announces Opposition to “Piling-On” Penalties
In a May speech, Deputy U.S. Attorney General Rod Rosenstein announced the DOJ’s policy to avoid the application of duplicative penalties by multiple regulatory bodies.
Nexus in a Post-Wayfair World
June 22, 2018
By Masha M. Yevzelman & Thomas R. Muck
A merchant of goods and services that makes sales in multiple states is no longer required to have physical presence in a state in order to be subject to sales and use tax in that state.
Virtual Shareholder Meetings in 2018: Facts, Figures and Best Practices
May 7, 2018
Virtual shareholder meetings continue to rise in popularity, with 236 companies holding virtual meetings in 2017 and at least 300 expected to do so in 2018.
In Stunning Rebuke, GE Shareholders Show Auditor Ratification is Not Always a Routine Matter
On April 25, shareholders of General Electric Company (GE) approved KPMG LLP as the company’s auditor for another year, but only by a margin of 65 percent “for” to 35 percent “against.”
Yahoo! to Pay $35 Million Fine for Failing to Disclose Massive 2014 Cybersecurity Breach
The SEC says it will not second-guess good faith judgments about whether, when and how public companies should disclose cybersecurity breaches, but its April 24 announcement of a $35 million settlement shows that sufficiently egregious disclosure failures will be punished.
Shareholders Continue to Promote the ‘Universal Proxy’ Idea
With the so-called universal proxy rule stalled at the SEC since its proposal in late 2016, some investors have been taking matters into their own hands.
As IPOs Rise, Where Will Shares Trade?
As initial public offerings rebound, the issue of thin trading has arisen.
Bond Market Moves Spark Regulatory Interest
Recent developments in the corporate bond market are sparking regulatory attention in the U.S. and abroad.
SEC Still Encouraging Companies to Seek Relief from Unduly Burdensome Financial Reporting Requirements
April 13, 2018
Soon after he was sworn in last year, SEC Chairman Jay Clayton gave a speech in which he encouraged companies to use Rule 3-13 to request relief from unduly burdensome financial reporting requirements.
Cyan Decision: No Relief for Defendants in State Securities Suits
The implications of the Cyan decision are grim for public companies and their D&O insurance carriers.
U.S. Antitrust Authorities Remain Vigilant in Booming Global M&A Market
U.S. and global M&A are booming, but companies cannot assume that all deals will avoid federal challenge.
Institutional Activists Try New Ways to Boost Board Diversity
With women and minorities still holding barely more than a third of public company board seats by all accounts, some institutional shareholders are withholding votes from some or all board nominees if the boards fail to meet diversity criteria.
Pay Ratio Disclosures Show Patterns by Company Size and Industry, Enable Employees to Assess Pay
Despite expert warnings that individual company disclosures mandated by the newly-effective pay ratio disclosure rule can be “meaningless” or “misleading,” overall data patterns can help benchmarking.
Surveys Show Many Public Companies Unprepared for Implementation of New Lease Accounting Standard as Deadline Nears
In recent years, accounting and finance professionals have wrestled with the implementation of new GAAP standards in the areas of revenue recognition, leases and credit losses.
SEC Issues Statement and Guidance on Public Company Cybersecurity Disclosures
March 15, 2018
On February 21, the SEC issued a statement and interpretive guidance to assist public companies in preparing disclosures about cybersecurity risks and incidents.
Reprimands of Big Banks Highlight Importance of Effective Oversight by Boards, Board Chairs and Lead Directors
In addition to imposing strong sanctions on Wells Fargo, the Federal Reserve Board has publicly posted letters of reprimand issued to the bank’s former CEO/board chair (in his capacity as chair), former independent lead director and current board, criticizing their ineffective oversight.
SEC Eyes Dual Class Shares for Reform
Might the SEC require sunsetting of dual-class shares listed on stock exchanges?
Congress, SEC Advance Initiatives for Smaller Public Companies
Small public companies may soon find life easier when it comes to filing forms and accessing capital, thanks to pending initiatives in Congress and at the SEC.
SCOTUS Watch: Relief for Defendants in State Securities Suits?
Is relief on the way for defendants targeted in state court class actions based on alleged violations of the Securities Act of 1933?
Digital Realty Trust Decision Increases Incentive to Bypass Internal Reporting
In-house compliance programs suffered a blow by the U.S. Supreme Court’s recent decision in Digital Realty Trust, Inc. v. Somers.
Spotlight on Gender Diversity in the Boardroom
February 19, 2018
“Press for Progress” is the theme of this year’s International Women’s Day, coming up on March 8. Fittingly, gender diversity in the boardroom has recently received attention from the SEC, the world’s largest asset manager and the business press.
World’s Largest Asset Manager Expects More than Mere Profits
In his most-recent annual letter to CEOs of the companies in BlackRock’s portfolio, BlackRock CEO Larry Fink calls on companies to “serve a social purpose” and to articulate how they make “a positive contribution to society.”
Distinguishing Between Urgency and Importance on the Board of Directors
As board members weigh their priorities for 2018, they would do well to consider a famous quote attributed to Dwight D. Eisenhower: “What is important is seldom urgent and what is urgent is seldom important.”
Tax Accounting Challenges Loom Large for Many Filers This Year
Form 10-K filers must comply with public company accounting standards, but that is easier said than done these days.
SEC Chairman Says Dodd-Frank Rulemaking Will Proceed
For public companies wondering when long-pending Dodd-Frank rules will hit, SEC Chairman Jay Clayton has promised action.
SEC Enforcement Targets for 2018 Include ‘Exam’ Cheating, Failure to File and ‘Pump and Dump’ Schemes
While the Trump Administration is known for its deregulatory approach, including a January 25 decision by the Department of Justice to end “use of civil enforcement authority to enforce agency guidance documents,” SEC enforcement action continues apace.
Pay Ratio to be Key Issue in 2018 Proxy Season
January 19, 2018
The arrival of 2018 means that most public companies will be required to comply with the SEC’s pay ratio disclosure rule in their next annual meeting proxy statement or Form 10-K.
SEC to Set New Boundaries on Requests Under the Freedom of Information Act
Are activist investors using the Freedom of Information Act (FOIA) to obtain information about your company in order to guide their investment or engagement decisions?
New Tax Law Eliminates Favorable Treatment of Performance-Based Compensation, Presents Opportunity to Simplify Pay Arrangements
Advocates of the new tax law, generally referred to as the Tax Cuts and Jobs Act, promised that it would “deliver more jobs, fairer taxes and bigger paychecks.”
SEC Publishes Guidance for Disclosure of New Tax Law’s Impact on Income
Will the Tax Cuts and Jobs Act have a material impact on your company’s tax position? If so, how will you calculate and disclose it?
Taking Stock of the IPO Market
IPOs that “once took seven months to go from announcement to trading are now taking less than 50 days,” according to reporting by Bloomberg.
Attention Compensation Committees: Discretion-Based Director Compensation Faces Stricter Scrutiny
December 15, 2017
On December 13, the Delaware Supreme Court issued an opinion, In Re Investors Bancorp, Inc. Stockholder Litigation, with significant implications for director compensation under equity incentive plans.
New Year’s Resolution for Public Companies: File 10-Qs and 10-Ks on Time
Stock prices drop significantly when companies fail to file Forms 10-Q and 10-K on a timely basis, even when management pledges to meet the extended deadlines afforded by Rule 12b-25, according to a recent study by researchers at New York University and the University of California at Berkeley.
Holiday Reading for Accountants and Auditors
A statement released by the SEC in connection with a recent accounting conference provides a useful and easily digestible recap of recent developments affecting all professionals involved in public company financial reporting.
Pending Tax Reform May Eliminate Some Popular Pay Mechanics
While the current tax reform compromise announced December 13 may boost pay overall, it could also eliminate certain familiar compensation tax breaks for companies and their executives.
New ISS Guidelines Recommend Voting Against Directors Who Approve ‘Excessive’ Director Pay
New proxy voting guidelines from Institutional Shareholder Services (ISS), issued November 16, include a new voting guideline on director pay.
Sexual Harassment Cases Prompt Changes – But EEOC Data Flag Other Types of Discrimination
The current wave of high-profile sexual harassment scandals is prompting rapid changes in workplaces far beyond Hollywood, according to a recent report in The Wall Street Journal. But sexual harassment is not the only type of workplace discrimination.
New Vote Count Shows Peltz Narrowly Winning P&G Board Seat
November 20, 2017
After the most expensive proxy fight in history, it appears that Nelson Peltz has narrowly won a seat on the board of consumer goods giant Procter & Gamble (P&G).
SEC Signals Change in Approach to Enforcement
At a recent securities conference, Steven Peikin, co-director of the SEC’s enforcement division, indicated the SEC would “drop the ‘broken windows’ strategy of pursuing many cases over even the smallest legal violations,” according to a report in The Wall Street Journal.
More on SEC Enforcement Priorities
On November 15, the SEC’s enforcement division issued a report highlighting its priorities for the coming year and looking back at its enforcement actions during fiscal year 2017, which ended on September 30.
SEC Approves New Auditing Standard Requiring Disclosure of Critical Accounting Matters
The SEC recently approved a new auditing standard aimed at enhancing the relevance and usefulness of the auditor’s report to investors.
Silicon Valley Extends Culture of Innovation to Governance
Companies and investors fed up with our public markets’ excessive focus on short-term earnings and profits at the expense of long-term strategy may be interested in the Long Term Stock Exchange (LTSE), a new governance model emerging from Silicon Valley that was recently featured in The Wall Street Journal.
GE to Simplify Financial Reporting, Streamline Structure
General Electric Company plans to adopt a “back-to-basics” approach to its financial reporting, said incoming CFO Jamie Miller in the company’s recent third quarter earnings call.
Fredrikson & Byron Represents Celcuity Inc. in its Initial Public Offering
October 26, 2017
Fredrikson acted as legal counsel to Celcuity Inc. in its initial public offering of 2.76 million shares of common stock with total gross proceeds of $26.2 million, before underwriting discounts and offering expenses.
Executives Preparing for Earnings Calls Face a Brave New World
October 23, 2017
As if busy CEOs and CFOs did not have enough to worry about, researchers have begun leveraging powerful computers and sophisticated algorithms to link executives’ word choice and behavior during earnings calls to subsequent stock performance.
SEC Comment Letters Focus on Non-GAAP Financial Measures, New Accounting Standards and Cybersecurity
Two reports published last month by Ernst & Young analyze trends in SEC comment letters for the year ended June 30, 2017.
Director Overboarding Remains an Issue
Are your directors “overboarded”? What would proxy advisors say?
SEC Extends Filing Deadlines for Hurricane Victims, Warns Investors Against Hurricane and Fire Scams
Companies hit by hurricanes Harvey, Irma or Maria will receive an extension on certain filing deadlines, said the SEC in a September 28 press release.
Whistleblowers: Who is Protected Against Retaliation?
It is illegal to retaliate against a whistleblower, but who is considered a whistleblower?
After the Whistle Blows: What Constitutes Retaliation?
It is illegal to retaliate against a whistleblower, but what is retaliation?
7 Key Proposed Amendments to Regulation S-K
October 17, 2017
On October 11, 2017, the Securities and Exchange Commission proposed several amendments to Regulation S-K as part of the FAST Act Modernization and Simplification of Regulation S-K.
SEC Issues Pay Ratio Disclosure Guidance for 2018 Proxy Statements
September 27, 2017
Companies seeking guidance on complying with the pay ratio rule in their 2018 proxy statements now have it in “boatloads.”
Looking Back at the 2017 Proxy Season
Two recent reports on the 2017 proxy season highlight the rising tide of successful shareholder resolutions seeking more disclosure on climate change preparedness, among other issues.
SEC Addresses Implementation of New Accounting Standards as Effective Dates Near
In a September 21 speech, SEC Deputy Chief Accountant Sagar Teotia shared several observations regarding implementation of the new GAAP standards in the areas of revenue recognition, leases and credit losses.
Top Exchanges Battle for SPACs
Venture capital firms Social Capital and Hedosophia made headlines by raising $600 million in an initial public offering of Social Capital Hedosophia Holdings Corp., a special purpose acquisition company, or SPAC.
Compliance Professionals Beware: Recent SEC Case Highlights Risk of Personal Liability
The SEC recently fined an outsourced chief compliance officer $30,000 and suspended him from holding any position in the securities industry for one year after he allegedly submitted inaccurate information in a filing for two affiliated investment advisory companies.
New Pay Equity Disclosure Rule Stayed by Office of Management and Budget
Large employers will not have to report employee pay by gender and race in their EEO-1 forms after all, thanks to a recent deregulatory stay.
Fredrikson & Byron Represents Sajan in its Sale to AMPLEXOR International
April 28, 2017
Fredrikson & Byron acted as legal counsel to Sajan Inc. (NASDAQ: SAJA), a full-service language translation and localization services provider, in its merger agreement with AMPLEXOR International SA, a leading digital solution provider headquartered in Luxembourg.
Impact of New Cybersecurity Law on Foreign Companies in China
December 5, 2016
By Robert M. Oberlies & Jessie Lu
On November 7, 2016, China’s Standing Committee of the National People’s Congress adopted the Cybersecurity Law of the People’s Republic of China (Cybersecurity Law). The Cybersecurity Law will take effect on June 1, 2017.
Financial Services Industry Targeted in Wave of Lawsuit Threats Over Websites Allegedly Inaccessible to the Visually Impaired
November 15, 2016
By Matthew T. Boos, Steven E. Helland & Karla L. Reyerson
In a trend that began several years ago and has migrated through several industries, investment firms are among those being targeted by enterprising plaintiffs’ lawyers alleging that the firms’ website are inaccessible to blind or otherwise disabled users. The claim is that the firms are violating the Americans with Disabilities Act (ADA).
New Regime for China Foreign Direct Investment
October 13, 2016
By Robert M. Oberlies & Jessie Lu
On October 8, 2016, China’s Ministry of Commerce issued interim measures further stream-lining the process for establishing companies in China and related corporate changes. Find out how this will impact companies doing business in China and future investment.
North Dakota Adopts Revised Uniform LLC Act Changing Law Governing LLCs
July 6, 2016
By Wayne W. Carlson, Michael S. Raum & Elizabeth L. Alvine
Find out what the recently adopted Revised Uniform Limited Liability Company Act means for North Dakota business and which changes may surprise those who are used to forming their own LLCs.
Department of Labor Issues New Overtime Rules
May 20, 2016
By Anne M. Radolinski & Pamela Abbate-Dattilo
On May 18, 2016, the Department of Labor issued the long-awaited new regulations which provide widespread and significant changes affecting all businesses and employees covered by the federal Fair Labor Standards Act. The regulations are effective December 1, 2016.
The SEC’s Announces 2016 Exam Priorities
February 5, 2016
The Securities and Exchange Commission (SEC), through its Office of Compliance Inspections and Examinations (OCIE), has published its exam priorities for 2016. According to the SEC, these priorities reflect certain practices and products that may present heightened risk to investors and/or the integrity of the U.S. capital markets.
Attorneys Thomas Henke & Evan Berquist Join Fredrikson & Byron
June 22, 2015
Attorneys Thomas B. Henke and Evan C. Berquist have joined Fredrikson & Byron. Henke is an officer in the Compensation Planning & Employee Benefits and the Business & Tax Planning Groups. Berquist is an associate in the Mergers & Acquisitions, Securities and International Groups.
Fredrikson & Byron Represents Bio-Techne’s Investment in CyVek, Inc.
April 4, 2014
Fredrikson & Byron acted as legal counsel for Techne Corporation in its $10 million equity investment in CyVek.
Fredrikson & Byron Represents Medtronic in its Public Offering of Senior Notes
March 14, 2014
Fredrikson & Byron acted as legal counsel for Medtronic, Inc. in its public offering of $250 million principal amount of its 0.875% Senior Notes due 2017, $250 million principal amount of its floating rate Senior Notes due 2017, $850 million principal amount of its 3.625% Senior Notes due 2024, and $650 million principal amount of its 4.625% Senior Notes due 2044.
Insider Trading: What Public Companies Should Know Now
September 1, 2013
Recent high-profile insider trading cases brought by the SEC and the DOJ have resulted in hefty prison sentences, fines and settlements.
SEC Says Social Media Releases Can Satisfy Regulation FD
April 1, 2013
By Fredrikson’s Securities Group
On April 2, 2013, the SEC confirmed that public companies may use social media, such as Facebook and Twitter, and other emerging means of communication in much the same way that they use their own websites to announce key information in compliance with Regulation FD. The key is whether investors have been notified about the social media accounts ahead of time.
IRS Issues Clarifications to Internal Revenue Code § 162(m)
September 1, 2011
Internal Revenue Code (IRC) § 162(m) imposes a $1 million deduction limit on compensation paid by a public corporation to certain executive officers. However, an exception applies to “qualified performance-based compensation,” which does not count against the deduction limit.
SEC Will Not Appeal Proxy Access Decision
On September 6, 2011, the Securities and Exchange Commission (SEC) confirmed that it will not seek a rehearing of the decision by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) that vacated an SEC rule, commonly known as the “proxy access” rule, that would have enabled certain shareholders of public companies to propose director nominees for inclusion in their company’s proxy materials.
Update on the Ever-developing Landscape of Shareholder Proposals
On September 15, 2011, the Securities and Exchange Commission (SEC) issued a final rule to adopt amendments to the proxy access rules for shareholder proposals in Rule 14a-8, which was discussed in our September 2011 issue of FredNEWS: Corporate & Securities.
