Securities

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Securities

TOP STORY—Report by House FSC Democrats urges market reforms to address extreme market volatility

The House GOP’s rebuttal alleged that the majority report relied on “conspiracy theories” about Citadel-Robinhood collusion while overlooking the strength of retail investors versus institutional investors during the January 2021 market volatility ev...

TOP STORY—Report by House FSC Democrats urges market reforms to address extreme market volatility
DODD-FRANK ACT—CII supports reopening of Commission’s clawback proposal
June 24, 2022
Joanne Cursinella, J.D.

The organization “strongly “supports” the reopening of the comment period to implement the provisions of Section 954 of the Dodd-Frank Act. The Council of Institutional Investors expressed support for the SEC’s proposal to reopen , for a second time,...

FORMS AND FILINGS—SEC moves Advisers Acts filings onto EDGAR
June 24, 2022
Rodney F. Tonkovic, J.D.

New electronic filing requirements will improve the submission and review process and will make the information more accessible to the investing public. The SEC has unanimously adopted final rules requiring the electronic filing of documents by inves...

WORTH NOTING—Other litigation, regulatory activity and industry news
June 24, 2022
WK Editorial Staff

A weekly roundup of other items of interest to the securities, commodities, and corporate governance communities. ENFORCEMENT— The CFTC fined Starberry Limited nearly $1.4 million and ordered it to disgorge the same amount, representing the commissio...

Securities

TOP STORY—Director McGonagle reassures Ag subcommittee about oversight of digital assets

The Director of the CFTC’s Division of Market Oversight told a House Agriculture subcommittee that the agency “has developed a keen understanding of digital assets.” In testimony before the House Agriculture Committee’s Subcommittee on Commodity Exch...

TOP STORY—Director McGonagle reassures Ag subcommittee about oversight of digital assets
REGULATORY ACTIVITY—CFTC Commissioners Mersinger, Pham caution against agency overreach, weigh in on non-intermediated access
June 23, 2022
Suzanne Cosgrove

CFTC must not sacrifice legacy agriculture and energy derivative markets in a drive to support innovation, commissioners say. The newest CFTC commissioners, Summer Mersinger and Caroline Pham, outlined their visions for the agency’s road ahead in sep...

DIRECTORS AND OFFICERS—Del. Ch.: Deadlock among eight-member Aerojet Rocketdyne board requires stockholder election to resolve
June 23, 2022
R. Jason Howard, J.D.

According to the court, the findings in favor of the plaintiffs should in no way be taken as an endorsement of one faction’s electability over the other. In a case that the Delaware Chancery Court described as a cautionary tale about the perils that ...

ENFORCEMENT—FINRA bar from association for omitting Form U4 info sustained by SEC
June 23, 2022
Jeffrey H. Brochin, J.D.

FINRA found that fraud violations warranted a bar from association, and the Commission concluded the bar was a necessary remedial measure The SEC sustained FINRA’s barring of a former registered representative of a former FINRA member firm from assoc...

Securities

TOP STORY—Lawmakers, industry groups comment on SEC climate proposal

The proposed rule would enhance and standardize companies’ climate-related disclosures from all industries and companies of all sizes. The list of comment letters on the SEC’s proposal to require that U.S. companies provide accurate and detailed info...

TOP STORY—Lawmakers, industry groups comment on SEC climate proposal
SEC NEWS AND SPEECHES—SEC releases Spring rulemaking agenda, draws criticism from Peirce
June 22, 2022
John Filar Atwood

Commissioner Peirce says the pace of the SEC’s rulemaking could be dangerous for markets and worries that the agency is not giving stakeholders adequate time to comment. The extent of SEC Chair Gary Gensler’s ambitious agenda came into clear view tod...

CORPORATE GOVERNANCE—Del Sup. Ct.: Charter unambiguously required Class B shareholder vote for transfer of shares to creditors
June 22, 2022
Jeffrey H. Brochin, J.D.

Applying a ‘Board only’ insolvency exception for authorizing transfer of shares to secured creditors would foster uncertainty and potential inconsistency in a context where predictability is crucial for corporations that have availed themselves of De...

ENFORCEMENT—Brinks chilled whistleblowing despite knowing about SEC enforcement
June 22, 2022
Rodney F. Tonkovic, J.D.

During a period when the SEC was stepping up enforcement of its whistleblower protection rule, new employees at Brinks were required to sign a confidentiality agreement with no exemptions. The Brinks Company has settled SEC charges that it violated w...

ENFORCEMENT—SEC charges Egan-Jones and CEO with conflict of interest violations
June 22, 2022
Kristin J. Angelino, J.D.

The credit rating company was ordered to pay a $1.7 million penalty, $146,592 in disgorgement and interest and to retain an independent consultant to assess its conflicts of interest policies. The SEC charged Pennsylvania-based Egan-Jones Ratings Com...

Securities

TOP STORY—W.D. Tex.: Tesla Shareholder files derivative suit against Elon Musk, board of directors, citing toxic culture

Verified stockholder derivative complaint filed by a shareholder alleges that a toxic culture of racism and sexual harassment pervades the Tesla workplace and exposes the Company to federal and state law liability, while tolerated by Board. A Tesla, ...

TOP STORY—W.D. Tex.: Tesla Shareholder files derivative suit against Elon Musk, board of directors, citing toxic culture
ACCOUNTING AND AUDITING—PCAOB amends auditing standards on lead auditor’s use of other auditors
June 21, 2022
Lene Powell, J.D.

The new requirements include a mix of principles and rules to address audit deficiencies and weaknesses that have been observed in audits involving multiple auditors. The Public Company Accounting Oversight Board (PCAOB) adopted amendments to its aud...

NASAA NEWS AND SPEECHES—NASAA expresses support for SEC proposal on SPACS
June 21, 2022
Joanne Cursinella, J.D.

But also sees some areas for improvement. The North American Securities Administrators Association, Inc. expressed, in a June 13, 2022 letter to the Commission, its support for Special Purpose Acquisition Companies, Shell Companies, and Projections ,...

SUPREME COURT DOCKET—U.S.: Gag order case will not reach the Supreme Court's ears
June 21, 2022
Rodney F. Tonkovic, J.D.

The Court denied certiorari for the final pending case on the docket, asking it to review the SEC's settlement prohibition against denying allegations in a complaint. The Supreme Court has declined to hear a petition asking it to review the constitut...

IPO TRACKER—Market sees first IPO by Indian company in nearly six years
June 21, 2022
John Filar Atwood

A snapshot of the week’s IPO activity, including completed deals, new preliminary filings and IPO withdrawals. The IPO market has seen a steady stream of IPOs by companies headquartered outside the U.S. in recent years, including 35 so far this year ...

Securities

TOP STORY—Senate confirms Lizarraga and Uyeda as new SEC commissioners

All five Commission seats are now filled as the agency addresses climate disclosure, gamification, and other key initiatives. The Senate has confirmed Jaime Lizarraga and Mark Uyeda as new SEC commissioners, filling the seat soon to be vacated by Com...

TOP STORY—Senate confirms Lizarraga and Uyeda as new SEC commissioners
NOTE TO SUBSCRIBERS
June 17, 2022

Securities Regulation Daily will not publish Monday, June 20 in observance of Juneteenth National Independence Day. We will resume publication on Tuesday, June 21, with the extensive coverage you’ve come to expect. Info

DERIVATIVES—Derivatives markets resilient amid geopolitical strains, climate change, CFTC’s Romero says
June 17, 2022
Suzanne Cosgrove

The CFTC is monitoring the effects of the war in Ukraine on global commodities, particularly oil, gas, and wheat, and seeking public input on climate risk. Commodity markets have faced significant challenges in recent years, first from the pandemic a...

BROKER-DEALERS—C.D. Cal.: SEC charges broker-dealer and five representatives with Regulation BI violations
June 17, 2022
Kristin J. Angelino, J.D.

The complaint alleges that the broker-dealer improperly sold $13.3 million worth of illiquid, high-risk bonds to retirees and other retail investors. The SEC filed charges in the Central District of California alleging that Western Securities, Inc., ...

FRAUD AND MANIPULATION—S.D.N.Y.: Crypto investors allege Elon Musk is manipulating Dogecoin
June 17, 2022
Anne Sherry, J.D.

A class-action lawsuit alleges that Elon Musk’s tweets amount to manipulation of Dogecoin, a crypto pyramid scheme based on the “greater fool theory.” A suit against Elon Musk and his companies SpaceX and Tesla alleges that the defendants are engagin...

WORTH NOTING—Other litigation, regulatory activity and industry news
June 17, 2022
WK Editorial Staff

A weekly roundup of other items of interest to the securities, commodities, and corporate governance communities. BLOCKCHAIN— State securities regulators in Alabama, Kentucky, New Jersey, Texas, and Washington are investigating cryptoasset lender Cel...