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.Continue Reading Fifth Circuit Requires SEC to Revisit Share Repurchase Disclosure Rules
Tatjana Paterno counsels private equity funds and their portfolio companies, strategic acquirers and multinational publicly traded corporations in the structuring, negotiation and consummation of acquisition transactions. To date, Tatjana has closed more than $22 billion in M&A transactions and more than $25 billion in overall transactions. Her practice focuses on companies within the healthcare and healthcare IT, cybersecurity, manufacturing, food and beverage, entertainment and technology industries, among others. Tatjana frequently advises management, boards and special committees on corporate governance and public company disclosure matters.
In a recent article for Agenda, I commented on the comment letters from the Securities and Exchange Commission (SEC) related to non-GAAP measures and what this focus could mean for audit committees. Continue Reading SEC Comment Letters on Non-GAAP Measures
On December 13, 2022, the Securities and Exchange Commission (SEC) issued seven new or revised Compliance and Disclosure Interpretations (C&DIs) on topics regarding the use of non-GAAP financial measures in SEC filings. Typically, the release of C&DIs, whether new or revised, indicates that a certain subject will be an area of heightened focus in SEC comment letters and enforcement actions.Continue Reading Non-GAAP Comment Letters: SEC Areas of Focus
In a previous blog post, we discussed certain high-level considerations for first-quarter 2020 earnings releases and guidance in the context of the macroeconomic uncertainty brought about by the novel coronavirus (COVID-19) pandemic. We indicated our expectation that a significant number of registrants would elect to withdraw guidance in light of this uncertainty.
To get a more comprehensive view of how registrants have approached financial guidance, we analyzed disclosures in earnings releases by off-calendar year-end companies furnished with the Securities and Exchange Commission (SEC) on or after March 16, 2020. As noted in greater detail below, a majority of companies issuing earnings releases during this period have withdrawn or suspended guidance. This post presents the results of our analysis.Continue Reading COVID-19: Bass, Berry & Sims’ Survey of Earnings Release Guidance Practices in the Wake of the Pandemic
On March 23, the Division of Enforcement of the Securities and Exchange Commission (SEC) issued a Statement warning against insider trading during the ongoing COVID-19 pandemic. In particular, the SEC cautioned that insiders are “regularly learning” new material non-public information (MNPI) that may “hold an even greater value than under normal circumstances.” The SEC also noted that unique circumstances mean more people may have access to MNPI than may typically be the case. This is particularly true for companies that delay earnings releases and SEC filings due to the pandemic.
Recognizing the heightened risk of illegal securities trading as a result of these and other factors, the SEC urged publicly traded companies to be mindful of their established controls and policies to protect against the improper dissemination and use of MNPI.
Proactive Steps for Public Companies
In light of the SEC’s Statement and the unique circumstances that companies are facing during the pandemic, publicly traded companies should take affirmative steps to mitigate insider trading risks.Continue Reading Heightened Insider Trading Risk Due to COVID-19
As companies continue to evaluate the impact of the novel coronavirus (COVID-19) pandemic on their business, public companies will be facing challenging disclosure considerations in connection with their upcoming first-quarter earnings calls and earnings releases.
As a backdrop, a significant number of public companies, concentrated in industries which have felt the strongest immediate impact of the crisis (such as companies whose business is tied to the travel industry), have either updated (e.g., Mastercard) or withdrawn (e.g., Hyatt Hotels, MGM Resorts, Twitter) their 2020 guidance due to the economic fallout and the uncertainty surrounding this pandemic.
Whether or not a public company has updated or withdrawn its 2020 guidance based on COVID-19 considerations, public companies will face challenging disclosure decisions as they approach their first-quarter (for calendar year-end companies) earnings releases and earnings calls. A key reference point in this regard is CF Disclosure Guidance, Topic No. 9, issued by the Division of Corporation Finance on March 25, which highlights the perspective of the Staff regarding various disclosure considerations related to the COVID-19 pandemic.Continue Reading High-Level Considerations for First-Quarter 2020 Earnings Releases and Guidance in Uncertain Times