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Tag Archives | SEC

Yes Men Best Chamber in Lawsuit

, June 19, 2013 ,

Maybe the SEC would be better off hiring the Yes Men to handle their rulemaking, rather than Robert Rice as SEC counsel, which could have a chilling impact on the SEC’s whistleblower program. (see SEC Chair Mary Jo White’s first big test by )

The Yes Men today implored the US Chamber of Commerce to reconsider their recent decision to withdraw the lawsuit they filed nearly four years ago, in a press conference on the steps of the lobbying giant itself. Said former defendant Andy Bichlbaum of the Continue Reading →

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Turnkey Governance Problematic at Northern Lights

, May 2, 2013 ,

Some trusts are created as turnkey mutual fund operations that launch numerous funds to be managed by different unaffiliated advisers and overseen by a single board of trustees. The federal securities laws require all mutual fund directors to evaluate and approve a fund’s contract with its investment adviser, and the funds must report back to shareholders about the material factors considered by the directors in making these decisions. The SEC Enforcement Division’s Asset Management Unit has been taking a widespread look into the investment advisory contract renewal process and fee arrangements in the fund industry. Continue Reading →

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Nell Minow: The Unfinished Business of Corporate Governance

, March 25, 2013 ,

Nell Minow

Writing in the March/April edition of The Corporate Board, Nell Minow titles her latest bit of advice, The Unfinished Business of Corporate Governance. Here’s the lead in:

After a decade of frantic corporate governance reform, business leaders may believe that governance has reached the pinnacle of responsibility and effectiveness. Not so fast, says Nell Minow, one of America’s most respected governance observers. Corporate data disclosure can still be manipulated, boards can still be opaque or unaccountable to investors, and work is still needed on corporate pay setting and transparency. Continue Reading →

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Take Action: Last Day to Comment on NYSE Rules on Proxy Distribution Fees

, March 15, 2013 ,

The deadline for comments on this important NYSE rulemaking that must be approved by the SEC is today, March 15, 2013, so act now or forever regret not taking action.

See the rulemaking and comments already posted to SEC site.  I’m concerned that provisions meant to facilitate voting on broker platforms may lead us right back into what is essentially broker voting. See discussion of Enhanced Broker’s Internet Platform beginning on page 37.   I would much prefer a more open system as I described in my Harvard Law post, An Open Proposal for Client Directed Voting. See also proxy plumbing comments by Moxy Vote and proxy plumbing comments by VoterMedia.org. Continue Reading →

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Ground-Breaking Proxy Proposals Headed to Shareowner Vote

, March 4, 2013 ,

Climate Change Portfolio Exposure

Boston Common Asset Management has a proposal that will appear on the proxy of PNC Financial Services ($PNC) requesting that it report to shareowners on the greenhouse gas emissions resulting from its lending portfolio and its exposure to climate change risk in its lending, investing, and financing activities. Watch for your proxy. The annual meeting will be held on April 23, 2012. According to the proposal, Continue Reading →

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Quicker Disclosure of Ownership Petitioned – Updated

, February 16, 2013 ,

NYSE Euronext, NIRI (National Investor Relations Institute) and the Society (Society of Corporate Secretaries & Governance Professionals) submitted a joint petition to the SEC requesting the SEC to reduce the time frame under which investors are required to report their holdings from 45 business days after the end of the quarter to two business days after the end of the quarter. Currently, the Exchange Act requires quarterly reporting, so a further reduction than quarterly reporting would require an act of Congress. Continue Reading →

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Corporate Directors Forum – Day 2

, February 14, 2013 ,

This is the last in my series on the Corporate Directors Forum 2013. See materials, slideshow, Corporate Directors Forum 2013: Bonus Session, and Corporate Directors Forum 2013 – Day 1, Part 1, and Corporate Directors Forum: Day 1, Part 2. The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion. I throw in a lot of opinions. Some are those of panelists, some are mine, and some came from the audience. Continue Reading →

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Corporate Directors Forum: Day 1, Part 2

, February 13, 2013 ,

Below are some relatively quick notes I took at the Corporate Directors Forum 2013, held on the beautiful campus of the University of San Diego, January 27-29, 2013. See materials, Corporate Directors Forum 2013: Bonus Session, and Corporate Directors Forum 2013 – Day 1, Part 1.

The program was subject to the Chatham House Rule, so there will be little in the way of attribution below but I hope to provide some sense of the discussion. I throw in a lot of opinions. Some are those of panelists, some are mine, and some came from the audience.  I still get a little lost in some of the financial discussions but think we need to raise public understanding, so I don’t shy away from trying to learn or from offering opinions. I had fun, learned from various perspectives, renewed acquaintances and made some new ones. If corporate governance is your thing, I hope to see you there in 2014. Continue Reading →

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Biased Ballots: Oshkosh Vote Questioned – Take Action

, February 12, 2013 ,

I found another case of corporate elections where ballot measures failed to be identified ”clearly and impartially.” This time at Oshkosh ($OSK). Should we be surprised? Isn’t it time you took a minute out of your day to send a message to the SEC asking for an end to such abuses?

Broadridge claims:

When it comes to proxy ballots, regulations are complex and mailing deadlines are tight. Broadridge helps fulfill regulatory responsibilities efficiently and economically. Broadridge handles the entire process on-line and in real time, from coordination with third-party entities to ordering, inventory maintenance, mailing, tracking and vote tabulation. Continue Reading →

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Corporate Directors Forum 2013: Bonus Session

, February 7, 2013 ,

Below are some relatively quick notes I took at the Corporate Directors Forum 2013, Bonus Session, held on the beautiful campus of the University of San Diego, January 27, 2013. For a list of conference materials, see the Forum’s official site. My site, Corporate Governance (CorpGov.net) is unaffiliated.

The program was subject to the Chatham House Rule, so there will be little in the way of attribution. Don’t expect complete sentences or thoughts either. The links are mine but don’t represent an endorsement by me. They just seemed relevant in a split second decision of how to add a little value to the conversation. Opinions will differ. I throw out lots of opinions. Some are those of panelists, some are mine, and some came from the audience.  I learned a few things, renewed acquaintances and made some new ones. I hope this provides readers with some sense of the discussion. That’s my main objective. Continue Reading →

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SEC Announces Panelists for Roundtable on Decimalization

, January 31, 2013 ,

The SEC today announced the panelists who will participate in its roundtable next week on decimalization.

The February 5 roundtable, which will evaluate the impact of tick sizes on the securities markets, will consist of three panels.

Participants on the first panel will address the impact of tick sizes on small and mid-sized companies, the economic consequences Continue Reading →

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Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime

, January 30, 2013 ,

Malcolm Gladwell’s book The Tipping Point: How Little Things Can Make a Big Difference discusses the “Broken Window theory.

If a window is broken and left unrepaired, people walking by will conclude that no one cares and no one is in charge. Soon, more windows will be broken, and a sense of anarchy will spread.

In the following post I argue that relatively minor problems, like how items left blank on a proxy are counted and how Broadridge labels shareowner proposals, sends a signal. Just like an abundance of graffiti tells you gangs are in charge, switching blank votes to management and relabeling shareowner proposals to gibberish tells you that shareowners are indifferent and that corporate managers have a clear invitation to more serious crime. I ask readers to take a simple action at the end of the post that, like fixing broken windows, could lead to the end of much more serious abuses.  Continue Reading →

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Free Handbook: Corporate Governance and Securities Laws for 2013

, January 13, 2013 ,

Public companies are subject to an extensive and complex regulatory regime under the U.S. federal securities laws and stock exchange listing rules.

This free handbook from Vintage Filings provides an overview of the securities law and stock exchange reporting, disclosure and corporate governance requirements applicable to public companies and their officers, directors and large shareholders. Continue Reading →

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SEC to Propose Rules on Corporate Political Spending by April 2013

, January 9, 2013 ,

The SEC recently updated its entry in the Office of Management and Budget’s Unified Agenda to indicate that, by April, it plans to issue a Notice of Proposed Rulemaking to require public companies to disclose their spending on politics. This is huge! Perhaps petitions, accompanied by thousands of e-mails from supporters, actually can have an impact. Congratulations to Bebchuk and Jackson, co-chairs of the Committee on Disclosure of Corporate Political Spending. See their post at HLS corpgov site. Continue Reading →

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Corporate Governance Quick Bites

, January 8, 2013 ,

Holly Gregory

Holly Gregory’s post Applying Securities Laws to Social Media Communications is the best I’ve seen on when the SEC’s Enforcement Division is likely to recommend an enforcement case to the Commission based on the potential for liability arising from disclosures by corporate officers through social media.

As widely reported, including by WSJ, Netflix and CEO Reed Hastings both received Wells Notices from the SEC, related to something Hastings wrote on Facebook back in June 2012. (Netflix Gets Wells Notice Over CEO Hastings’ Facebook Post, 12/6/2012) Continue Reading →

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Wayback Machine: December 2007, 2002 & 1997

, December 31, 2012 ,

Time to step into the way back machine to see what we were writing about 5, 10 and 15 years ago.

Five years ago in 2007 major charitable foundations, with the notable exception of the Gates Foundation, are initiating or strengthening efforts to harmonize the social and environmental effect of their endowment investments with their philanthropic goals, according to a report in the LATimes. (Foundations align investments with their charitable goals, 12/29/07) Continue Reading →

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Shareholder Proposals: SLB 14G

, December 19, 2012 ,

On October 16, 2012, the SEC published another “Staff Legal Bulletin” with guidance on shareowner proposals submitted to public companies pursuant to Rule 14a-8. SLB No. 14G provides the Division of Finance’s views regarding:

  • Proof of ownership under Rule 14a-8(b)(2)(i) for purposes of verifying whether a beneficial owner is eligible to submit a proposal;
  • the manner in which companies should notify proponents of a failure to provide proof of ownership; and
  • the use of website references in proposals and supporting statements. Continue Reading →
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Division of Corporation Finance Director Meredith Cross to Leave SEC

, December 4, 2012 ,
Washington, D.C., Dec. 4, 2012 — The Securities and Exchange Commission today announced that Meredith B. Cross, Director of the Division of Corporation Finance, will leave the SEC at the end of the year to return to the private sector.

Ms. Cross has served as the Division’s Director since June 2009. She joined Chairman Mary Schapiro’s senior leadership team in the wake of the financial crisis and played a key role in the Chairman’s initiatives to rebuild the agency’s credibility, improve overall operations at the SEC, and build a more resilient, integrated program designed to foresee and reduce the likelihood of future crises in the securities markets. Continue Reading →

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Elisse Walter to Head SEC

, November 26, 2012 ,

Elisse Walter

Obama chose SEC official Elisse Walter to lead agency after Mary Schapiro announced she is stepping down.  Walter is a Democrat on the SEC’s five-member panel. Her term expired June 5, 2012, but a commissioner can stay on for an additional 18 months if not reconfirmed or replaced before then–in her case December 2013. Obama expressed his “deep gratitude” to Schapiro for taking the job in 2009. Obama said in a statement,

I am also pleased to designate Elisse Walter as SEC Chairman after Mary’s departure. I’m confident that Elisse’s years of experience will serve her well in her new position, and I’m grateful she has agreed to help lead the agency. Continue Reading →

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Support Petition to Disclose Corporate Political Spending

, November 15, 2012 ,

More than $6 billion was spent on this year’s presidential/congressional elections, too much of it by unknown sources. Are your companies opposing candidates you support or supporting those you oppose?  If so, do those contributions add to the value of your companies?  If they don’t disclose the expenditure, how would you ever know? Sick of that situation?  Want a change?

The WSJ reports that the SEC is actively considering an 8/3/2011 rulemaking petition submitted by a committee of ten law professors that urged the SEC to adopt rules that would require public Continue Reading →

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Crowdfunding Amicus Curiae on Gabelli v. Securities and Exchange Commission

, October 30, 2012 ,

William Michael Cunningham, of Socially Responsible Investment Research is attempting to crowdfund the filing fee for a friend of the court brief at the US Supreme Court.

The case involves defendant Mark Gabelli, who was the portfolio manager for the Gabelli Global Growth Fund (GGGF), as well as several affiliated funds, from 1997 until 2004. Defendant Bruce Alpert had been the Chief Operating Continue Reading →

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Event: The Role of Proxy Advisory Firms

, October 25, 2012 ,

The U.S. Chamber Center for Capital Markets Competitiveness (CCMC) will hold a half-day event on Wednesday, December 5, 2012 in Washington DC to take an in-depth look at the influence of proxy advisors and the state of corporate governance in the U.S. It would be nice to get some shareowners out to at least listen and report back to CorpGov.net. I would love to learn of their plans. Continue Reading →

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Review: Corporate Governance: Cases and Materials

, October 11, 2012 ,

This comprehensive case book sheds light on the complicated regulatory framework and the dynamic nature of laws on corporate governance in the United States. Chapters typically cover regulations promulgated by federal, state, and self-regulatory organizations. Corporate governance is examined through case law with ample discussion to provide context concerning evolving practices and normative concerns. In that regard, the authors give voice to a wide variety of perspectives, including their own. Corporate Governance: Cases and Materialsby J. Robert Brown, Jr., Professor of Law, University of Denver Sturm College of Law; Lisa L. Casey, Associate Professor of Law, Notre Dame Law School. Continue Reading →

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Corporate Governance Bites

, October 9, 2012 ,

Continuing challenges to exclusive forum bylaw provisions - Lexology

An increasingly popular trend in recent years has been the adoption by Delaware public companies of an exclusive forum provision in their bylaws. An exclusive forum provision generally provides for the Delaware Court of Chancery to be the exclusive forum for certain disputes (including derivative actions, breach of fiduciary duty claims, claims arising pursuant
to the company’s charter or bylaws and other shareholder litigation) against the company — and prohibiting such suits in other jurisdictions. Expected benefits cited by companies of adopting exclusive forum bylaw provisions include decreased litigation costs, avoiding parallel litigation in multiple jurisdictions and the predictability of Delaware courts. Continue Reading →

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SEC’s IAC Seeks Input for Agenda

, September 19, 2012 ,

The Dodd-Frank Act established the Investor Advisory Committee (IAC) to advise the Securities and Exchange Commission on regulatory priorities, the regulation of securities products, trading strategies, fee structures, the effectiveness of disclosure, and on initiatives to protect investor interests and to promote investor confidence and the integrity of the securities marketplace. The IAC met for the first time on June 12, 2012 and the next full committee meeting is scheduled for September 28, 2012. Additional information on the committee. Continue Reading →

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Trading Cards

, September 13, 2012 ,

I’m on vacation but here’s part of Broc Romanek‘s post from yesterday on SEC Trading Commissioner Cards and a great cartoon by Hank Blaustein, which you can buy from Grant’s Interest Rate Observer for $150, signed by the artist, probably a better investment than most stocks.  Simon Billenness, Consultant, Corporate Responsibility and Socially Responsible Investment, tells me:

I actually have two of these SEC trading cards!  There were people distributing them outside Union Station last week.

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ISS Should Reconsider Their Analysis of H&R Block Proxy Access Proposal

, September 10, 2012 ,

The influential proxy analyst, Institutional Shareholder Services (ISS), recommends voting against Kenneth Steiner’s proxy access proposal at H&R Block (HRB) on 9/13 because it “could undermine the efforts of larger, long-term shareholders whose interests might better reflect those of the broader shareholder base.” Their logic appears flawed. Larger, longer-term shareowners would gain rights, not lose them, under the proposal. CBIS changed their vote after reading this post and talking to me (see ProxyDemocracy.org). Will your fund do the same? Continue Reading →

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SEC to Hold Small Business Advisory Meeting in San Francisco

, August 29, 2012 ,

The Securities and Exchange Commission’s Advisory Committee on Small and Emerging Companies will hold its next meeting in San Francisco on September 7 to discuss market structure and disclosure rules among other issues affecting smaller companies.

The Advisory Committee was formed last year to provide a formal mechanism for the SEC to receive advice and recommendations on privately-held small businesses and publicly-traded companies with a market capitalization of less than $250 million.  Continue Reading →

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