Starting in the 1930s with the earliest version of its proxy rules, the Securities and Exchange Commission gradually increased the proportion of instructed votes on a shareholder’s proxy card until, for the first time in 2022, it required a fully-instructed proxy card — the universal proxy. This evolution shifted the exercise of the shareholder’s vote from the shareholders’ meeting to the vote delegation that occurs when the shareholder completes the proxy card. In corporate elections today, the voting choice is executed when the binding instruction is made on the proxy card; proxyholders mere ..read more

One of the hallmarks of PCCE is that it brings together academics, regulators, and industry professionals, and allows us to have candid conversations about corporate misconduct and the ways in which we can all work together to improve compliance. And that’s precisely what I’d like to do this afternoon. As we gather to mark ten years of dialogue, I think it’s important to both summarize what we’ve learned during this period and see how we can leverage those lessons to effect better compliance in the future. As is customary, my remarks this afternoon are in my official capacity as SEC Enforceme ..read more

For most of its history, the private equity industry was largely left alone by securities regulators. A basic assumption underlying this approach was that private equity fund investors are sophisticated and should therefore be able to engage in effective private ordering without outside assistance. But this attitude started changing amid explosive industry growth and reports of hidden fees and conflicts of interest in the years following the global financial crisis of 2008. In the early 2010s, legislators created a new regulatory framework for the marketing and operation of private funds in th ..read more

On March 6, 2024, the U.S. Securities and Exchange Commission approved in a 3-2 vote final rules that require most reporting companies to provide certain climate-related information in their registration statements and annual reports filed with the SEC. This memorandum summarizes a portion of the final rules, the amendments to Regulation S-X, as amended (Regulation S-X), under the Securities Act of 1933, as amended (the Securities Act), and the Securities Exchange Act of 1934, as amended (the Exchange Act), that require a new footnote in audited financial statements, analyzes some of the key c ..read more

The Supreme Court is about to eviscerate the SEC’s power to efficiently pursue fraudsters. Or so we are told. In SEC v. Jarkesy, the Court may hold that whenever the SEC seeks to impose monetary penalties on enforcement targets for securities fraud, it must proceed in federal court and not in its own administrative forum. Many observers predict this would significantly hamper SEC enforcement. For some, this would be a glorious restoration of fundamental individual rights and a much-needed constraint on an oppressive and unaccountable administrative state. For others, this would mark the culmin ..read more

A fascinating legal soap opera is now underway following a trial just completed in California. The issues are new, novel, and important in one sense, but old, familiar, and important in another. The case – SEC v. Panuwat[1] — is  an SEC civil case that represented the first time the SEC has tested its “shadow trading” theory of insider trading. Nearly all insider trading cases involve a misappropriation of material nonpublic information from the issuer. In such cases, the defendant is alleged to have breached a fiduciary duty to the issuer’s shareholders by the defendant’s use of this inf ..read more

Regulators globally are requiring companies to disclose their greenhouse gas (GHG) emissions. For companies in some industries, Scope 1 and 2 emissions – covering, respectively, emissions from direct fuel use and from acquired energy – will cover most relevant emissions caused by their activities, and these are relatively simple to calculate and disclose. For most companies in the financial sector, though, the bulk of relevant emissions are categorised as Scope 3 indirect emissions, specifically, financed emissions. These are much more problematic to calculate or estimate. Regulators, however ..read more

Class-action litigation for fraud on the market typically focuses on purchasers and sellers of stock. Yet those that traded in options on the shares can also be harmed. In a recent paper, we draw from experience in In re Apple, Inc. Securities Litigation (N.D. Cal. 2022) to describe the issues related to including options in a certified class in the face of substantial opposition from defendants. In the Apple case, plaintiffs claimed that the company had inflated its share price in early November 2018 with misleading statements about demand for its products in China. In February 2022, the dist ..read more

Let me start by reminding you that my views are my own as a Commissioner and not necessarily those of the Securities and Exchange Commission (“SEC”) or my fellow Commissioners. It is good to be back at SEC Speaks and to know that the content shared here today is available for anyone who may wish to access it. Last time https://clsbluesky.law.columbia.edu/?p=59740&preview=trueI was here, I talked about the SEC’s “secret garden”—the maze of staff guidance that serves to define practices across the securities industry in a way that may be inconsistent with a plain reading of the rulebook.[1 ..read more

Whether you’re here in person or participating virtually from around the country, or even overseas, I thank you for joining us. As is customary, my remarks this morning are in my official capacity as Director of the Securities and Exchange Commission’s Division of Enforcement, and do not necessarily reflect the views of the Commission, the Commissioners, or other members of the staff. I want to start by thanking PLI for organizing this event and making it available for free to all this year. It is important for us to speak directly to not just the securities bar, but also to everyone that is i ..read more