The final rules represent the capstone in a series of policies that will dial back shareholder oversight of management at the companies they own. Last year, the Commission adopted guidance on proxy advisors and proxy solicitation that made it more difficult and costly for investment advisers to vote shares on behalf of their clients in reliance on independent proxy voting advice.[1] Then, earlier this year, the Commission adopted new rules and additional guidance related…

On September 23, 2020, the U.S. Securities and Exchange Commission approved changes to its highly successful Dodd-Frank Act whistleblower program in a 3-2 vote [1]. The program has resulted in over $2.5 billion in penalties against public companies, $750 million returned to investors, and $500 million paid in rewards.  Paying corporate whistleblowers mandatory monetary rewards of between 10-30 percent of all penalties obtained from commission enforcement proceedings triggered by their allegations has been a highly…

Today [September 23] the majority of the Commission is approving amendments to the procedures governing shareholder proposals. The amendments are described as a “modernization,”[1] designed to reduce costs for corporations. Even if I agreed that was necessary, I cannot agree with the method. Before today, a shareholder needed to hold only $2,000 worth of a company’s securities for one year in order to submit a proposal for voting. This threshold allowed a broad array…

Over the past three years, we have engaged in a number of retrospective reviews of the rules that implement our securities law framework.  These reviews often, but not always, have yielded the unassailable conclusion that modernization is necessary and appropriate.  This should come as no surprise given how much has changed in the past 20, 30, 40 or more years since key rules were last comprehensively reviewed.  At a macro level, I note that interaction…

Priming transactions have been increasing in frequency during the current pandemic restructuring cycle.  Priming usually involves the debtor shifting collateral and assets away from their core lending group to support new tranches of debt that are structurally or directly senior to their existing lenders.  Holders who are not included in the priming tranche are left with their investments further underwater and their restructuring options more limited if the priming “fix” doesn’t turn the debtor’s business…