Tagged: SEC enforcement

Employment / Securities

Companies Subject to U.S. Jurisdiction Should not Restrict Personnel from Being SEC Whistleblowers, or Receiving SEC Whistleblower Awards

SEC rules prohibit taking “any action” to impede an individual from communicating directly with the SEC about a possible securities law violation, including by enforcing, or threatening to enforce, a confidentiality agreement. Previously, the SEC has brought enforcement actions against, and secured large monetary settlements from, companies whose internal agreements and policies included broad confidentiality provisions that would restrict an employee from voluntarily being a whistleblower to the SEC. This month, the SEC announced a new round of settlements with seven different U.S. listed companies, who agreed to pay the SEC penalties totaling $3 million for violating these rules. What is notable about this new round of enforcement is that in each case,...

M&A / Securities

Continuing a Company from One Country to Another Country Without U.S. Registration or Exemption Triggers Shareholder Rescission Rights

In Canada it’s considered no big deal to ask shareholders to approve a continuance or redomicile of a company from one province to another, or between Canadian provincial and federal jurisdictions. That’s also largely true from a U.S. securities perspective, but only because the continuance is being made within the same country. If a continuance or redomicile is made from one country to a different country, it’s a completely different story. Canadian counsel and their clients are sometimes surprised to hear that if a company continues from Canada to another country, or if a company continues into Canada, the failure to comply with U.S. securities laws may subject the company to rescission rights...

Securities

When Canadian Investors Must Report Investments (including those in Canada!) to the SEC

On September 17, 2019, the Financial Post reported that British Columbia Investment Management Corporation (BCIMC), one of Canada’s largest pension funds, inadvertently failed to report to the U.S. Securities and Exchange Commission (SEC) $2.46 billion of its holdings in 98 Canadian companies, accounting for more than 20 percent of the investments required to be reported to the SEC. The reason – it appears that BCIMC’s investments in Canadian companies that report with the SEC (often referred to as “cross-listed” companies) were inadvertently omitted. The Financial Post reported that this was not the first time BCIMC had made errors in its SEC filings, citing a series of prior amendments filed to correct data from...

Capital Markets / M&A / Securities

What Cross-listed Canadian Companies Need to Know About the Impact of the U.S. Government Shutdown on SEC Operations

As a result of the partial U.S. government shutdown that began on December 22, 2018, the U.S. Securities and Exchange Commission (SEC), one of nine federal agencies affected, recently published its Operations Plan Under a Lapse in Appropriations and Government Shutdown (sec.gov/files/sec-plan-of-operations-during-lapse-in-appropriations-2018.pdf), which went into effect on December 27, 2018. The Operations Plan offers important guidance regarding the significant impacts of the shutdown on the agency’s activities. Additional guidance is also available from the SEC’s Divisions of Corporation Finance (here: sec.gov/page/corpfin-section-landing) and Investment Management (here: sec.gov/investment-management). Issuers and practitioners should make contingency plans to address the effects upon ongoing or planned securities offerings, filings, and requests for interpretive guidance, among other things. A few important highlights:...

Corporate / Litigation / Securities

SEC Guidance on Cybersecurity Disclosure and Policies – Recap of Dorsey Webinar Presentation

Earlier this week, a panel of Dorsey attorneys presented a webinar on the SEC’s recent guidance on cybersecurity disclosures and policies, which included a detailed walk-through of the SEC’s 2018 guidance, including issues related to enhanced disclosure, insider trading, and Reg FD policies. The panel also discussed the impact of the SEC’s guidance within the changing landscape of cybersecurity and current developments in shareholder litigation, SEC enforcement actions, and other regulatory and legislative initiatives such as the GDPR. The Equifax data breach is used as a case study to illustrate how the SEC’s guidance might play out in this broader context. The webinar recording and presentation materials are available on our website at...