Akin Gump has issued an alert on administration and congressional activity since President Trump’s inauguration. The report highlights key regulatory and legislative developments across a range of policy areas. This document also previews the policy agenda for the coming year and concludes with a political update and analysis of the 2018 congressional elections.
One of the primary functions of a board of directors is to enhance shareholder value. Advocates argue and studies show that companies with greater board diversity outperform those companies with less diversity. This is one of the reasons that board composition (and, in particular, gender, race and ethnic diversity) is a topic of increasing focus among corporate governance groups, investors, and regulators in both the U.S. and Europe.
Akin Gump took a look at the rising use of new electronic communications platforms among employees and clients across the financial services industry. Here we explore popular apps, including Signal, WhatsApp and iMessage. We offer a hypothetical of what the SEC would likely expect an advisor to maintain as “books and records,” and what they could request in an examination or obtain from a subpoena.
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The stakes will continue to rise for boards in connection with cybersecurity in 2018. The past year has redefined the upward bounds of the megabreach. The Yahoo! hack (three billion accounts) forced Yahoo! to accept a $350 million decrease in purchase price from Verizon. The Equifax hack, affecting 143+ million individuals, and exposing the social security numbers of nearly half of the adult U.S. population, resulted in the ouster of the CEO and a shakeup of the board. Additionally, the fallout from the Uber breach, affecting 57 million riders and drivers, is ongoing.
On November 1, 2017, the Division of Corporation Finance (Division) of the Securities and Exchange Commission (SEC) released Staff Legal Bulletin No. 14I (SLB No. 14I) to offer guidance on the scope and application of Rules 14a-8(i)(7) and 14a-8(i)(5), each of which provide a substantive basis for excluding shareholder proposals from a company’s proxy materials for shareholder meetings. SLB No. 14I also discusses a new policy requiring documentation when shareholders submit “proposals by proxy,” along with the Division’s views on the use of graphs and images in the supporting statements for shareholder proposals.
On October 23, 2017, the Securities and Exchange Commission (“SEC”) unanimously approved (the “Approval Release”) the Public Company Accounting Oversight Board’s (“PCAOB”) proposal to adopt a new auditing standard, AS 3101, The Auditor’s Report on an Audit of Financial Statements When Auditor Expresses an Unqualified Opinion, and related amendments to other auditing standards. As discussed in the Approval Release, the PCAOB adopted the new standard in final form on June 1, 2017, subject to SEC approval, following a PCAOB concept release, proposal and reproposal process beginning in 2011.
This week we highlight a speech by Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement, on cybersecurity and retail investor protection. In her remarks, she addresses the key priorities of the Enforcement Division in its allocation of resources, including its focus on retail investors, cyber-related issues, the conduct of investment advisers and broker-dealers, financial fraud and disclosure issues, and insider trading.
On October 17, 2017, the Staff of the Securities and Exchange Commission (SEC) issued new Non-GAAP Financial Measures Compliance and Disclosure Interpretations (C&DI) that clarify when financial forecasts used in connection with a business combination transaction are considered non-GAAP measures subject to Item 10(e) of Regulation S-K and Regulation G.