One of the principal duties of corporate directors and officers is the duty of confidentiality. That’s not just my personal opinion; it’s supported by case law, corporate governance treatises, law review articles, and more. Generally viewed as a subset of the duty of loyalty, the duty of confidentiality means that directors and officers are expected to keep their knowledge of the company to themselves or, at a minimum, to disseminate it on a strict “need…

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Out with the old, in with the new: Banks and S&Ls must now provide updated and expanded statistical disclosures

By Andrew M. Piper

September 24, 2020

How did we get here? On September 11, 2020, the SEC adopted new rules to “update and expand the statistical disclosures” that bank holding companies, banks, savings and loan holding companies, and savings and loan associations are required to provide to investors. The old regime – Industry Guide 3, “Statistical Disclosure by Bank Holding Companies” – had not been meaningfully updated for more than 30 years. There have been all sorts of developments since then,…

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Legal surrealism

By Robert B. Lamm

September 15, 2020

el-salvador-dali-889515_1920 — Image by Таня Добрая from Pixabay

I’ve often said that lawyers representing corporations should never underestimate the creativity of the plaintiffs’ bar. However, it seems that the white collar criminal defense bar may not be slouches in the creativity department either. I’m referring to a recent report in The Wall Street Journal that the legal team representing Elizabeth Holmes, the “disgraced Theranos founder,” is considering using her mental health (presumably, the lack thereof) as a defense in her upcoming federal trial…

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Pedal to the metal on principles-based disclosure

By Christopher Seifter

September 10, 2020

On August 26, 2020, the SEC continued to keep its foot on the gas with respect to its recent practice of modernizing disclosure rules by adopting amendments to the description of business (Item 101), legal proceedings (Item 103), and risk factor disclosures (Item 105) that registrants are required to make pursuant to Regulation S-K. As discussed in a previous post by my colleague, Bob Lamm, regarding the rule changes as originally proposed on August 8,…

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SEC changes “accredited investor” definition – good, but not enough

By Robert C. White Jr.

September 2, 2020

On August 26, 2020, the SEC adopted changes to its definition of “accredited investor.” The SEC Release can be found here. The new rules will become effective 60 days after their publication in the Federal Register (around the end of October 2020). These changes are definitely a move in the right direction, and they indicate that the SEC may be willing to further expand and modernize the accredited investor qualification requirements, but I don’t…

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One-trick ponies and hordes of directors

By Robert B. Lamm

August 17, 2020

For both public and private companies, it’s important to determine the skills and other attributes needed to form a good or, hopefully, great board. Of course, there are basics that always apply, such as integrity, intelligence, and a good mix of collegiality and candor. However, once you get past those basics, it’s desirable to figure out what the organization really needs. If the company has a consumer-facing business, you probably want to have a director…

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13F proposal — the SEC can (and should) do better

By Robert B. Lamm

August 10, 2020

From where I sit, the SEC under the chairmanship of Jay Clayton has generally done a good job for public companies. It has adopted a number of rules and amendments that make disclosure more effective without appreciably adding to – and in some cases reducing – the burdens on public companies. Examples include streamlining financial disclosure requirements, rationalizing the definitions of “smaller reporting company”, “accelerated filer”, and “large accelerated filer”, and revising…

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More serious food for thought

By Robert B. Lamm

July 10, 2020

In my last post, I expressed some thoughts about the need to address our history and continuing practice of racial discrimination and inequality. I’m still thinking about specific actions that I can take to put my actions where my mouth is. However, in the meantime, I want to share a communication I received today from Paul Washington. Paul is currently the Executive Director of the ESG Center (formerly the Corporate Governance Center) of The…

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I’m serious

By Robert B. Lamm

June 30, 2020

Readers of this blog know that my posts tend to be on the light side – even when addressing subjects I regard as important, I find it hard to avoid at least a touch of sarcasm or irony. Each posting also includes a picture intended to be humorous. This is not a usual posting, however. This time, I’m writing from my heart on a subject that can’t be treated with humor, irony, or sarcasm. And…

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When it comes to perquisites, caveat discloser

By Robert B. Lamm

June 23, 2020

As noted in a prior post, every now and then the SEC Enforcement Division likes to remind companies of the requirement to disclose personal benefits, or perquisites. I’d even hazard a guess – completely unsubstantiated by research – that enforcement actions regarding perquisite non-disclosure make up a significant percentage of enforcement actions concerning proxy statements. And yet, companies seem to keep forgetting about perks disclosure. In some cases, the companies’ disclosure controls may not…

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Out with the old, in with the new: Banks and S&Ls must now provide updated and expanded statistical disclosures

Legal surrealism

Pedal to the metal on principles-based disclosure

SEC changes “accredited investor” definition – good, but not enough

One-trick ponies and hordes of directors

13F proposal — the SEC can (and should) do better

More serious food for thought

I’m serious

When it comes to perquisites, caveat discloser

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