The U.S. Supreme Court has unanimously ruled that pure silence in MD&A statements are not actionable in shareholder securities fraud cases.  The case is important for issuers and shareholders alike for several reasons: Pure omissions in MD&A statements are not actionable, but half-truths remain actionable. Item 303 duty to disclose requirements do not automatically render omissions thereunder as independent support of Section 10(b) private liability. The opinion does not impact the SEC’s authority to prosecute issuers that fail to disclose all the information required in Item ..read more

Today, the Securities Exchange Commission (SEC) voluntarily stayed its recently issued Climate Disclosure Rules.   The SEC hopes the voluntary stay will facilitate the resolution of the current Eighth Circuit challenge. The SEC intends to continue defending the rules in the proceeding but hopes the stay will also prevent potential regulatory uncertainty if registrants were to become subject to the new requirements during the legal proceedings challenging their validity.  To read our initial post regarding the SEC’s climate change disclosure rules, click here. We will contin ..read more

In a never ending saga to the climate disclosure rules, on March 15, the Fifth Circuit temporarily stayed the recently adopted climate change disclosure rules.  A number of lawsuits were filed shortly after the rules were adopted by the Securities Exchange Commission (SEC) earlier this month.  We expect the various pending appeals on the subject to be consolidated with a determination as to whether or not this “stay” will “stay” in place (pun intended). To read our initial post regarding the SEC’s climate change disclosure rules, click here. We will continue to monitor these developm ..read more

After almost two years following its proposed rules, on March 6, 2024, the Securities and Exchange Commission (SEC) adopted final rules to require public companies to disclose certain climate-related information in registration statements and annual reports. The SEC proposed the rules on March 21, 2022, and subsequently received over 24,000 comment letters. The SEC was responsive to the exceptional amount of outside commentary. At over 800 pages, the adopting release far exceeds the length of the proposing release, but the final rules are narrower in scope and utilize a less prescriptive appro ..read more

On February 29, the Securities and Exchange Commission (the SEC) announced that it settled an administrative proceeding against Lordstown Motors Corps’ former auditor, Clark Schaefer Hackett and Co. (CSH)—the same day that the SEC also announced charges against Lordstown for misleading investors about the sales prospects of its flagship electric pickup truck, the Endurance. Among other findings, the SEC found that CSH violated Rule 2-01 of Regulation S-X (the Rule) by providing prohibited non-audit services to Lordstown while also engaged in auditing Lordstown’s financial statements (which wer ..read more

On October 18, 2023, the Securities and Exchange Commission (SEC) adopted amendments to the rules governing beneficial ownership reporting to “require market participants to provide more timely information on their positions to meet the needs of investors in today’s financial markets.” As discussed in more detail below, the amendments update the following: Accelerate the filing deadlines for initial and amended Schedule 13D and 13G beneficial ownership reports. Clarify Schedule 13D disclosure requirements with respect to derivative securities. Require that Schedules 13D and 13G be filed using ..read more

On November 22, the Securities and Exchange Commission (SEC) stayed the recently enacted Share Repurchase Disclosure Modernization Rule (Repurchase Disclosure Rule) pursuant to section 705 of the Administrative Procedure Act and the U.S. Court of Appeals for the Firth Circuit’s (Fifth Circuit) October 31, 2023 opinion providing the SEC 30 days to correct defects in the Repurchase Disclosure Rule.  For an overview of the Fifth Circuit’s October 31 opinion, please refer to our earlier blog post: Fifth Circuit Requires SEC to Revisit Share Repurchase Disclosure Rules. The stay order issued b ..read more

Recently, the State of California enacted Assembly Bill 1305: the Voluntary Carbon Market Disclosures Act (AB 1305), which requires companies, under certain circumstances, to make website disclosures of certain information about their greenhouse gas (GHG) emissions and emissions-reduction programs. AB 1305 has the potential to apply to a large number of U.S. companies, including those not incorporated or headquartered in California, regardless of whether companies are public or private. Importantly, AB 1305 has a compliance date of January 1, 2024, making it important for companies to assess t ..read more

On October 31, the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit) issued an opinion finding that the U.S. Securities and Exchange Commission (SEC) violated the Administration Procedure Act when adopting recent amendments to its share repurchase rules (as amended, the Rule). Rather than vacate the Rule, the Fifth Circuit provided the SEC with 30 days to correct the errors identified by the Fifth Circuit. Background The Rule, adopted by the SEC on May 3, 2023, requires, among other things, the following: Reporting of daily repurchase activity in a new exhibit to Forms 10-K and 10-Q ..read more

Please join us for our 5th Annual Corporate & Securities Counsel Public Company Forum. This virtual half-day program will be held on Tuesday, December 12, from 11:00 a.m. – 3:00 p.m. and will feature panel discussions focused on timely and practical guidance related to the latest developments in corporate and securities matters impacting public companies, including: SEC Developments – including Non-GAAP Guidance, Insider Trading Policies, Clawback Rules, PCAOB Proposal, Climate Change SEC Rulemaking Update – Share Repurchase, Cybersecurity Public Company Directors’ Duties & ..read more