Practice Area Blogs & Digests

On September 30, 2020, two years after making headlines by enacting Senate Bill 826, legislation requiring public companies based in the state to include at least one woman on their boards by the end of 2019, California enacted Assembly Bill 979, a similar bill requiring public companies based in the state to include at least one director from an underrepresented community by the end of 2021.

While California’s legislative mandates have garnered the most attention, several other state legislatures have enacted or are considering board diversity legislation. In addition, a recent proposal by influential proxy advisory firm Institutional Shareholder Services Inc. has the potential to effectively mandate racial and ethnic diversity on all public company boards, regardless of applicable state law.

On September 23, 2020, the SEC adopted amendments to the rules governing its whistleblower award program.

On September 23, 2020, the SEC adopted amendments to Exchange Act Rule 14a-8, the rule that governs the process for shareholder proposals to be included in a company’s proxy statement.

On October 7, 2020, the SEC proposed a conditional exemption from the broker registration requirements of Section 15(a) of the Exchange Act for “finders” who assist issuers with raising capital in private markets from accredited investors.

On August 26, 2020, the SEC adopted amendments to the definition of “accredited investor” in Rule 501(a) of Regulation D, expanding the pool of investors who may participate in private securities offerings.

On August 26, 2020, the SEC adopted amendments to modernize the description of business (Item 101), legal proceedings (Item 103) and risk factor disclosures (Item 105) that registrants are required to make pursuant to Regulation S-K.

On July 22, 2020, the SEC adopted amendments to the rules governing proxy solicitations.

The upcoming presidential election could effectively transfer control of the SEC to the Democratic party, meaning that views currently held by a minority of the SEC’s five Commissioners could soon gain majority status. Statements issued by Democratic Commissioners Allison Herren Lee and Caroline Crenshaw dissenting against recent SEC rule amendments offer a glimpse into the potential priorities of a Democratic-led SEC.

On August 28, 2020, the SEC adopted temporary final rules extending the effectiveness of previously-adopted temporary relief from certain requirements of Regulation Crowdfunding to facilitate capital formation for small businesses impacted by COVID-19.