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Just when you thought the hazards of cyberfraud couldn’t get worse, the SEC recently issued a Report of Investigation (more on that later) stating that nine recent corporate victims of cyberfraud may have compounded their problems by having insufficient internal accounting controls. Specifically, the SEC focused on Sections 13(b)(2)(B)(i) and (iii) of the Securities Exchange Act, which it summarized as requiring companies to: “devise and maintain a system of internal accounting sufficient to provide reasonable…
On August 17, the SEC announced a sprawling array of rule amendments designed to simplify and update its disclosure requirements. You may recall that the Fixing America’s Surface Transportation (FAST) Act of 2015 directed the SEC to identify amendments to accomplish those goals. This is a step toward implementing that directive. The new rules will be effective 30 days after publication in the Federal Register. Although the final release is extensive (more than 300 pages)…
Just before Independence Day, the SEC adopted amendments to its eXtensible Business Reporting Language (XBRL) reporting requirements, which will become effective 30 days after their publication in the Federal Register. (Although the amendments apply to both operating companies and funds, I’ll address only the impact on companies.) The amendments will require, on a phased-in basis, that companies use Inline XBRL when submitting financial statement information. This means that XBRL data must be embedded directly into the…
New SEC Commissioner Robert J. Jackson Jr. (sworn in last January) delivered an interesting speech last week at the Center for American Progress highlighting an apparent connection between corporate stock buybacks and insider stock sales – and calling for remedial regulatory and governance action. Commissioner Jackson said that his long-standing interest in stock buybacks was rekindled by the new tax law, which provided a tax holiday for international corporations to repatriate billions of dollars of…
It’s been a year since I wrote about The Board’s Overlooked Role in Compliance. At the time, it seemed that momentum was building for more proactive board engagement in establishing and overseeing compliance programs. After all, regulators and courts have been increasingly outspoken about the importance of effective compliance programs and pointed about the essential role of boards of directors. Deputy Attorney General Rod Rosenstein recently addressed that very topic at Compliance Week’s 2018…
Public company focus on environmental, social, and governance issues has been trending upward for years, largely at the insistence of investors, employee, regulators, and other company stakeholders. A recent report entitled Turning Point: Corporate Progress on the Ceres Roadmap for Sustainability does a nice job of quantifying, and providing context for, that trend. Ceres is a nonprofit organization whose mission is to “… transform the economy to build a sustainable future for people and the…
In late February, the SEC approved what it labeled “Guidance on Public Company Cybersecurity Disclosures.” And, sure enough, about three-quarters of its 24 pages focus on the various categories and locations of cybersecurity risk and incident disclosure obligations, as well as materiality determinations. Because the SEC’s much-anticipated guidance appeared right in the thick of calendar-year companies’ Form 10-K and proxy statement preparations, much attention has been paid to its disclosure aspects. But as the dust…
The recently released Society of Corporate Compliance and Ethics 2017 Compliance and Ethics Officer and Staff Salary Survey contains a host of interesting CCO and other compliance personnel compensation information. Also interesting is the survey’s profile data regarding compliance professionals and their companies. The SCCE is a nonprofit association of more than 5,800 members, including CCOs and their staffs, employed in a wide range of industries. The 2017 survey’s data was derived from 1,376 email…
The SEC recently approved an amendment to NYSE’s Listed Company Manual prohibiting companies from issuing material news after NYSE closes for trading – 4:00 p.m. Eastern time on normal trading days – until the earlier of (a) publication of the company’s official closing price by NYSE and (b) five minutes after NYSE’s official closing time. An important exception permits companies to publicly disclose material information immediately following a non-intentional disclosure if necessary to comply with…
You may have heard that the Republican tax overhaul (originally known as the Tax Cuts and Jobs Act of 2017) was signed into law on December 22, 2017. That same day, the SEC staff provided helpful disclosure guidance in the form of Staff Accounting Bulletin No. 118 and C&DI 110.02. Together, this timely guidance clarifies how companies should disclose certain income tax effects of the new law and the extent to which Item 2.06…