Speaking at a session at the American Bar Association’s annual meeting, a representative of the Securities and Exchange Commission’s Division of Corporation Finance (Michael Seaman) provided guidance for attendees regarding areas of focus in the coming months.  After reviewing some of the Commission’s recent rulemaking initiatives, including the Concept Release regarding Rule 701 and Form S-8, the recent changes to Regulation S-K to address outdated, duplicative and other similar rules, and the proposed amendments to…

In a white paper titled, “Taking Stock,” published by MSCI and written by Ric Marshall, Pano Seretis, and Agnes Grunfeld, the authors analyze the effect of share buybacks. As we have written in a number of prior posts, particularly following US tax reform, corporate share buybacks have been criticized in the popular press as well as by regulators. The whitepaper studies buyback activity at the 610 MSCI USA Index constituents and track share…

In a recent paper titled, “Voluntary Disclosure and Firm Visibility: Evidence from Firms Pursuing an Initial Public Offering,” authors Michael Dambra, Bryce Schonberger, and Charles Wasley review the benefits of pre-IPO press releases and investor meetings. Based on a sample of 569 IPOs undertaken from 2004 to 2014, the median IPO company issues two press releases in the year before the IPO and 16.7 percent of the companies attend an investor conference in…

In June 2018, the Securities and Exchange Commission adopted amendments to the definition of “smaller reporting company.”  Under the amendments a company with a public float of less than $250 million qualifies as an SRC.  A company with no public float or with a public float of less than $700 million will qualify as an SRC if it had annual revenues of less than $100 million during its most recently completed fiscal year. …

Securities and Exchange Commission Chair Clayton addressed attendees at the Nashville 36|86 Entrepreneurship Festival regarding the Commission’s capital formation agenda.  Clayton noted that the Commission has taken a number of steps to reduce the regulatory burdens for smaller companies, pointing to the amendments to the definition of “smaller reporting company,” the recently adopted disclosure modernization and simplification amendments to Regulation S-K and Regulation S-X, and the Division of Corporation Finance’s guidance extending the confidential submission…

In an interesting paper titled “The Power of Words in Capital Markets:  SEC Comment Letters on Foreign Issuers and the Impact of Domestic Enforcement,” authors Daniel Giamouridis, Kleopatra Koulikidou and Stergios Leventis review the tone of comment letters issued to foreign private issuers and its effect on stock market activity.  The study is based on 1,324 comment letters issued and released on EDGAR from 2005 through 2014.  The comment letters include principally negative…

In a recent case, the Second Circuit court decided that a Securities Exchange Act Section 10(b) action could be brought because the transaction at issue had sufficient connections to the United States to constitute a “domestic transaction.”   The action involved Bahamian and American plaintiffs bringing an action against a Bahamian company.  The company’s securities were not listed in the United States.  The Supreme Court standard established in the Morrison v. National Australia Bank Ltd…