September 2020

This is a continuation of our series addressing steps companies can take to protect themselves during government enforcement actions related to COVID-19. For more information, see our previous articles addressing corporate best practices and the health care industry.

COVID-19 has affected the financial conditions and operations of all public companies, most in a negative way but some in very positive ways. Regardless of the impact, all public companies must consider the anticipated scrutiny they will receive from the U.S. Securities and Exchange Commission (SEC) and the possible risk they face from SEC Enforcement if they do not proceed with caution. While the rules and landscape may continue to evolve, it seems apparent at this point that SEC scrutiny related to COVID-19 is most relevant in the following ways.

1. SEC Enforcement’s role in monitoring relief funding. In a prior article, we discussed steps health care companies can take to protect themselves against government investigations related to COVID-19. But all companies that received relief funding must be careful.Continue Reading How Public Companies Can Protect Against SEC Scrutiny Related to COVID-19

Subscribers to our blog know that we monitor EDGAR for new SEC comment letters and enjoy bringing attention to the more interesting ones.  In today’s blog post, we bring you three new SEC comment letter exchanges.

  • In the first, the SEC asks the registrant for more information related to a COVID-19-related adjustment in its non-GAAP financial measure.
  • The second involves the SEC questioning, and eventually disagreeing with, the registrant’s materiality analysis under Staff Accounting Bulletin No. 99 (SAB 99).
  • The third letter involves an offering document produced by South Korea.

SEC Staff Wants More Information about a COVID-19 Adjustment in Non-GAAP Net Income

We’ve previously blogged about COVID-19-related adjustments in connection with the presentation of non-GAAP financial measures, including the difficulty that some public companies may have in reasonably quantifying the extent to which incremental expenses were driven by the COVID-19 pandemic as opposed to other factors.
Continue Reading Recent SEC Comment Letters of Interest Regarding COVID-19 Adjustments, SAB 99 and South Korea

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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