Last week, the Staff of the Division of Corporation Finance (the SEC Staff) of the Securities and Exchange Commission (SEC) released new compliance and disclosure interpretations (116.11 and 133.13) (the New C&DIs), which clarify disclosure requirements relating to diversity under Item 401(e) and Item 407(c)(2)(vi) of Regulation S-K.
The new 116th Congress convened on Thursday, January 3, 2019 as the partial government shutdown, carrying over from the prior Congress, continued into the new year and has now outlasted previous shutdowns. Although the private sector is getting back to business this month, the shutdown has slowed—and in some cases halted—business with the government. Here are some practical considerations for private parties with proceedings in our federal courts and pending or contemplated capital markets, mergers and acquisitions and regulatory approvals that seek to do business with a range of federal regulatory bodies including the Securities and Exchange Commission (SEC), the Federal antitrust agencies, the Committee on Foreign Investment in the United States (CFIUS), the Federal Communications Commission (FCC) and the Food and Drug Adminstration (FDA). Please contact any of the listed Akin Gump professionals if you have questions about the application of the shutdown to your specific situation.
The corporate culture of a company starts at the top, with the board of directors, and directors should be attuned not only to the company’s business, but also to its people and values across the company. Ongoing and thoughtful efforts to understand the company’s culture and address any issues will help the board prepare for possible crises, reduce potential liability and facilitate appropriate responses internally and externally.
All U.S. sanctions on Iran that were previously lifted or waived as part of the Iran nuclear deal were re-imposed as of November 5, 2018. Please read Akin Gump’s commentary on what this means for businesses.
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On September 30, Governor Jerry Brown (D) signed a new California law requiring female presence on boards of public companies headquartered in California.
Under SB-826, all public companies listed on a major U.S. stock exchange and headquartered in California must have one woman on their board by the end of 2019 and, by the end of 2021, two women if the board has five directors, and three women if the board has six or more directors. Companies will be deemed to be in compliance with the law if female directors hold the requisite number of board seats during any portion of the calendar year. Companies that fail to comply could be fined - $100,000 for the first violation and $300,000 for each subsequent violation.
Akin Gump has issued an alert detailing the pilot program that CFIUS announced which expands jurisdiction and imposes mandatory reporting on certain industries.
Akin Gump has issued an alert on the Delaware Court of Chancery’s decision that a buyer has the contractual right to terminate a merger based on a sudden and sustained decline in the seller’s business. The Delaware Court has made clear the decision was driven by facts, not legal innovation and that the decision provides guidance to both litigators and dealmakers for negotiation and interpretation of so-called “material adverse effect” clauses.
On September 25, 2018, the staff of the Division of Corporation Finance (the SEC Staff) of the Securities and Exchange Commission (SEC) released Compliance and Disclosure Interpretation 105.09 (C&DI 105.09), which clarifies the effectiveness of the SEC’s Final Rule, “Disclosure Update and Simplification” (the Disclosure Simplification Rules). The Disclosure Simplification Rules, which the SEC adopted on August 17, 2018, are intended to simplify disclosure for companies by eliminating certain redundant, duplicative, overlapping, outdated or superseded disclosure requirements. Among other changes, the Disclosure Simplification Rules added a requirement that quarterly reports on Form 10-Q include information regarding changes in shareholders’ equity and the amount of dividends per share for each class of shares. Disclosure of this information is already required in annual reports on Form 10-K.