SEC Guidance

Subscribe to SEC Guidance via RSS

Securities and Shareholder Litigation 2017: A Look AheadWhile not necessarily as eventful as 2015, 2016 saw courts interpret and build upon major decisions from prior years, and have set up at least one important issue for consideration by the U.S. Supreme Court. 2016 also featured several important legal developments that should continue to impact both private litigation and public enforcement throughout 2017, including:

  • SEC Whistleblower Program. By the time the SEC closed its 2016 fiscal year in September, it had filed a record number of enforcement actions. In addition, the SEC’s whistleblower program awarded more than $57 million to 13 whistleblowers during the year, almost as much as in all previous years combined. The big question will be whether the Trump administration will allow this trend to continue.

Continue Reading Bass, Berry & Sims Securities and Shareholder Litigation Group Publishes 2017: A Look Ahead

Recently, the SEC adopted technical amendments for self-executing provisions of the JOBS Act—mostly relating to EGCs.

One important update that impacts virtually all companies is the update related to amending the cover pages for numerous filings. Broadly speaking, the cover page has been revised to include a “check the box” item to indicate that the person filing the report is an “emerging growth company” and an additional box to check as follows: “If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.”

Continue Reading Effective Today – New EGC “Check the Box” on Cover Pages of Most SEC Forms, including 8-K, S-1/3/4/11 and 10-K/Q

This post was updated on August 16, 2017, and September 12, 2017, to include the eleventh and twelfth FAQs, respectively.

1. What are the new rules on exhibit hyperlinks generally?
On March 1, 2017, the SEC voted to adopt new rules and form amendments to make it easier for investors and other market participants to find and access exhibits in registration statements and periodic reports. The amendments will require registrants to include a hyperlink to each exhibit in the filing’s exhibit index.  Currently, someone seeking to retrieve and access an exhibit that has been incorporated by reference must review the exhibit index to determine the filing in which the exhibit is included, and then must search through the registrant’s filings to locate the relevant filing.

The amendments require registrants that file registration statements or reports subject to the exhibit requirements under Item 601 of Regulation S-K, or that file Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in the exhibit index of these filings, and to submit such registration statements and reports on EDGAR in HyperText Markup Language (HTML) format.Continue Reading 10 FAQs on the New SEC Rules on Exhibit Hyperlinks (plus two bonus questions!)

Late Tuesday evening, Acting Chairman Michael Piwowar issued two statements — available here and here — announcing that he was directing the SEC Staff to reconsider whether the 2014 guidance on the conflict minerals rule is still appropriate and whether any additional relief is warranted. As a result, the SEC has created a website where interested parties can submit comments.
Continue Reading SEC Reconsidering Conflict Minerals Rule Implementation

Jay Clayton
Jay Clayton

President-elect Donald Trump on Wednesday chose Jay Clayton, a former Sullivan & Cromwell deal lawyer, as his nominee to head the SEC.  Below are a few quick facts about his pick.

Bio Highlights:

  • Practice involves public and private mergers and acquisitions transactions, capital markets offerings, regulatory and enforcement proceedings, and other matters where multidisciplinary advice and experience is valued.
  • Clayton also advises several high-net-worth families regarding their public and private investments.
  • Thought leadership posted on his bio indicates significant interest/experience in cybersecurity.
  • JD – University of Pennsylvania, 1993

Continue Reading Quick Fact Sheet on Trump’s Pick for SEC Chair, Jay Clayton

On December 5, 2016, Wes Bricker, the SEC’s Chief Accountant, delivered an insightful keynote address before the 2016 AICPA Conference on current SEC and PCAOB developments. The speech was entitled, “Working Together to Advance High Quality Information in the Capital Markets.” The speech covered a number of diverse topics, including an update on the Office of Chief Accountant, internal control over financial reporting, revenue recognition implementation, non-GAAP reporting, valuation practices, auditor independence, the PCAOB, IFRS and audit committees, among others. The full speech is linked here. Below is an excerpt of Mr. Bricker’s comments directed to audit committees, which included questions from audit committee members that he found helpful during his time as an audit engagement partner in generating dialogue:
Continue Reading SEC Chief Accountant Wes Bricker Delivers Keynote Address Before the 2016 AICPA Conference

Probably one of the most sensitive disclosures a public company may be required to make is information related to “contingencies.”  Disclosure of pending lawsuits and government investigations is closely scrutinized by analysts, investors and the SEC.  With respect to the latter group, we recently came across the below SEC staff comment, which is a stark reminder of the importance of fully considering the accounting literature when analyzing whether a litigation contingency is probable and reasonably estimable.  The comment pointedly asks the company (Stericycle, Inc.) why it was unable to disclose an amount or range of reasonably possible loss under the accounting literature for a legal proceeding when the settlement agreement was entered into shortly after the filing of the 10-Q.   The company’s response is worth reading.
Continue Reading A Recent SEC Comment Drives Home the Importance of Carefully Considering the Accrual and Disclosure Requirements under ASC 450 (Contingencies)

Deloitte recently posted an excellent study regarding SEC comment letter trends.

The Deloitte study highlights the significant increase in 2016 in SEC comments regarding non-GAAP financial measures, which is no surprise in light of the SEC’s public comments regarding this issue and the new SEC guidance (C&DIs) released in May 2016, and is consistent with trends we have been seeing.  Registrants should continue to be mindful of the focus of the SEC (both the Division of Corporation Finance in relation to the SEC comment letter process and the Division of Enforcement) on this issue.Continue Reading SEC Comment Letter Trends

For those following recent SEC developments, you know that the SEC has made a concerted effort this year to reign in the use of non-GAAP financial measures made by companies, or at least make sure their usage complies with Regulation G and Item 10(e) of Regulation S-K. Recently, I came across the below comment sent by the Staff of the Division of Corporation Finance to Activision Blizzard, Inc. regarding its first quarter earnings release.  It is a friendly reminder to companies that disclose non-GAAP financial measures in earnings releases that the requirement to give equal or greater prominence to GAAP financial measures generally also applies to percentages and ratios calculated using a non-GAAP financial measure.
Continue Reading Equal Prominence When Giving the Percentage Growth of a Non-GAAP Financial Measure?

Blueprint for an IPOBass, Berry & Sims is pleased to provide its Blueprint for an IPO to help companies understand the process of going public and the new challenges they will face once their securities are publicly traded. An initial public offering (IPO) is a transaction in which a company’s securities are offered to the public for the first time. Companies go public to raise capital to fuel growth, pay down debt and provide liquidity to shareholders, among other things. Going public is a corporate milestone, particularly in the Sarbanes-Oxley Act era of corporate reform. An IPO is at the same time exciting and very demanding on a company’s management team. IPO candidates face for the first time the expansive regulatory scheme administered by the Securities and Exchange Commission (SEC) and must deal with corporate governance processes that are much different than what they had as private companies.
Continue Reading Bass, Berry & Sims Releases Blueprint for an IPO

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

Thought Leadership by our Attorneys.