Securities Law Practice Center

Top 5 Corporate & Securities Blog Posts

Today we continue our bi-weekly installment shining a light on the best of the corporate and securities blogosphere. Highlights include an FCPA debate, corporate spending in elections, the JOBS Act and more. If there are any corporate or securities blogs you think should be highlighted by our Top 5, please comment on this post and we’ll check them out!

1) The FCPA Blog: A Reply to The New Republic - A recent article in The New Republic entitled Why Corporate America Shrugged at the Wal-Mart Bribery Scandal certainly raised a few eyebrows. In this post, Andy Spalding takes this premise to task for a variety of reasons including lack of evidence.

2) The Race to the Bottom: The Flawed System for the Election and Nomination of Directors (The Weakness in Plurality Voting) - Using the recent reelection of Sirius XM Radio board member Leon Black who was overwhelmingly defeated by shareholders yet remained on the board, Robert Brown makes the case for majority voting of directors. Read the rest of this entry »

Davis Polk Mid-Season Update on the 2012 Proxy Season

“The 2012 proxy season in the United States, forecast by some to feature significant turmoil and change, has in fact been less tumultuous than expected. It’s been all quiet on the regulatory front, owing to the SEC’s highly deliberate approach to rulemaking and the D.C. Circuit’s interventionist reaction to the proxy access rules. With new rules, for once, not in motion, change is occurring incrementally, as activists continue old campaigns and launch new ones, institutional shareholders express their support on both the issues and the circumstances of particular companies, and the companies themselves decide when to resist and when to negotiate.” This is an overview of the Mid-Season Update on the 2012 Proxy Season we just received from our friends at Davis Polk. Here is an excerpt:

Continued Support for Say-on-Pay Votes
Obtaining say-on-pay support continues to be a nonissue for many companies. Of the 639 large accelerated filers to report results as of May 18th, only 2% failed their say-on-pay votes, the same percentage that we saw in 2011. Less than 16% of large accelerated filers reported say-on-pay results below the 80% approval level and less than 10% reported results below the 70% approval level. The continued high pass rates may reflect not only the tactical judgment of shareholders to force the issue at only a handful of companies, but also the retreat at many companies from practices that had drawn the most criticism, such as tax gross-ups and excessive severance. Many companies also increased their engagement with shareholders and have done a better job of explaining their pay practices. Read the rest of this entry »

Possible Tax & Regulatory Changes May Affect Financial Services M&A

The combination of major tax changes and an increased length of time required to obtain regulatory approval for M&A transactions in the financial services sector will have implications for companies considering strategic transactions in the U.S. According to this memo sent in by our friends at Sullivan & Cromwell, financial services companies may want to move quickly to close transactions before the end of this year. Here is an excerpt:

Financial services clients considering strategic transactions in the U.S. should take into account the combined impact of two factors. First, the “Bush tax cuts” will expire at the end of this year and some of the Obamacare tax increases will take effect on January 1, and absent Congressional action, the combined Federal tax rate on capital gains recognized by individuals will increase from 15% to 23.5% (including the increase in the Medicare tax). Second, there appears to be an increased length of time required to obtain regulatory approval for M&A  transactions in the financial services sector. Read the rest of this entry »

New Litigation Option Available for Swap Parties in New York

In a recent decision, Justice Bernard J. Fried of the New York Supreme Court found that certain swap participants can enforce payment obligations against defaulting counterparties using a New York procedural mechanism known as a motion for summary judgment in lieu of a complaint. This decision presents an opportunity to expedite litigation provided certain conditions have been satisfied. In this memorandum, Richards Kibbe & Orbe attorney Matthew M. Riccardi discusses the decision and some of the issues it presents. Here is an excerpt:

Lawsuits seeking to enforce payment under ISDA agreements, which are generally governed by New York law and frequently filed in New York State court, can move slowly. Under standard procedure, a plaintiff serves a complaint, the defendant can answer or move to dismiss, and both parties embark on a long discovery process involving document productions and witness depositions. Only after discovery is complete—months, if not years after the lawsuit was commenced—may the parties be in a position to have a court consider evidence to determine liability through a motion for summary judgment. Read the rest of this entry »

Mark Your Calendar for JOBS Act 2012: What You Need to Know Now

On April 5, 2012, the Jumpstart Our Business Startups (JOBS) Act was signed into law, bringing about extraordinary changes to the regulation of capital formation in the United States. The JOBS Act: (1) creates a new regulatory “on ramp” for emerging growth companies going public, with confidential SEC Staff review of draft IPO registration statements, reduced disclosure requirements and freer “test the waters” and research communications around the time of securities offerings; (2) permits general solicitation and general advertising in Rule 506 or Rule 144A offerings when sales are only to accredited investors or QIBs; (3) establishes a small offering exemption for crowdfunding; (4) creates a new public offering exemption for offerings up to $50 million; and (5) raises the “holder of record” threshold for mandatory SEC registration and reporting.

Please join us one week from today in New York City and live on the web for PLI’s JOBS Act 2012: What You Need to Know Now. At this full-day seminar, you will hear leading experts from the SEC, top law firms and general counsels’ offices discuss the latest practical guidance on implementation of the various provisions of the JOBS Act, as well as what to expect as the SEC adopts rules under the Act over the next year.