Recently, the SEC’s Division of Trading and Markets – which is the office that regulates TSVs – issued these four FAQs, which address: In addition, Nasdaq issued these FAQs – well, they’re called FAQs but they’re not in that format – that summarizes part of the SEC’s Order as well as notes other things including: 1. Lack of Interoperability: The SEC’s Innovation Exemption doesn’t require …
Corp Fin Issues Three CFIs on “Significant Amount of Assets” Under Item 2.01 of Form 8-K
A few days ago, Corp Fin dropped another raft of CFIs. Most of them are of the “housekeeping” nature – but three of them are interesting because they deal with how to apply the tests to determine if an acquisition or disposition is of “significant amount of assets” under Item 2.01 of Form 8-K. Cooley’s Chad Mills points out that new Question 105.03 is particularly …
Your Company May Have Tokenized Stock: 9 More Things You Should Know
Recently, I blogged about nine things you should know about tokenization in the wake of the SEC’s Order that provides an “Innovation Exemption” for certain tokenized securities venues (“TSVs”). Although the SEC’s Order doesn’t force companies to tokenize their shares, it has created a framework for the trading of securities tokenized by third parties unaffiliated with issuers – putting the burden on you to be …
DOJ’s New Corporate Fraud Enforcement Directive: A Dozen Takeaways
Recently, the head of the DOJ’s National Fraud Enforcement Division (known as “NFED”) Colin McDonald issued Directive 26-12: “Corporate Enforcement in the Fight Against Fraud.” The Directive signals a more aggressive, coordinated and data-driven approach to corporate fraud enforcement, with greater emphasis on management accountability, taxpayer-related misconduct and centralized oversight. Although existing self-disclosure incentives remain intact, companies operating in the DOJ’s priority areas may face …
SEC Report on Climate Action 100+ Signals Broader Scrutiny of Coordinated Shareholder Voting
Last week – as noted in this Cooley Alert penned by Brad Goldberg, Beth Sasfai, Justin Kisner and Michael Mencher – the SEC issued this Section 21(a) Report of Investigation addressing the activities of Climate Action 100+ (CA100) and certain of its members in connection with the 2021 contested director election at ExxonMobil. The SEC determined not to pursue an enforcement action based on the …
The SEC Creates a Framework for “Tokenized Stock”: You Could Be Impacted
The SEC issued this order last month about how people could trade the stock of public companies using “tokenized stock” – which uses distributed ledger technology. Although the SEC’s order doesn’t force companies to tokenize their shares, it has created a framework under which someone else may attempt to tokenize them – putting the burden on you to be prepared to make a potentially consequential …
An Inside Look at Cooley’s New AI Tool for IPOs: “Cooley GO Public”
I am very excited about the recent launch of “Cooley GO Public,” an AI-powered tool – developed with OpenAI – designed to help the firm with the IPO process. Cooley’s David Peinsipp was interviewed by Law.com about this groundbreaking development – here’s an excerpt: “The decision to develop a proprietary tool followed a period of experimentation by the firm’s capital markets attorneys and reflected the …
The SEC’s “Roundtable on 24-Hour Trading Preparations”: 11 Things to Know
During last week’s the SEC’s “Roundtable on Preparations for 24-Hour Trading,” panelists generally conveyed substantial confidence that the technical infrastructure for 23×5 trading will be ready by December 6th, but they noted that technical readiness is only the first chapter. The bigger question is whether overnight trading develops sufficient liquidity, execution quality, resiliency, harmonization and price stability to attract institutions and support issuers as well …
SEC Proposes (Long Overdue) Transfer Agent Reform
Talk about overdue. The rules governing transfer agents hasn’t been substantively updated since the early ‘80s. That’s over forty years. Given that one of the larger transfer agents in the US demonstrated that its internal control environment was shaky a few years back – and that some of the newer entrants into the field aren’t that experienced – reform in this area is sorely needed. …
Delaware Chancery Reaffirms Challenges In Pleading a Caremark Case
A few weeks ago, the Delaware Chancery Court dismissed a lawsuit against a company’s directors and officers – alleging oversight claims premised on Caremark – after that company entered into a $237 million derivative settlement a few years ago. That settlement was the largest derivative ever in Delaware of a Caremark duty of oversight case. This dismissal highlights that a board that makes a good-faith …