Securities Updates

Read need-to-know updates, commentary, and analysis on Securities issues written by leading professionals.
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Another Look at U.S. Federal Income Tax Treatment of Contingent Earnout Payments

The sale of a company in an M&A transaction often involves consideration to the selling shareholders that is deferred and contingent on subsequent events in the life of the company, such as the post-acquisition performance of...more

District Court Clarifies Statute of Repose Timeline in Material Misstatement Case

The US District Court for the Eastern District of New York recently dismissed a class action claim, determining the reasserted claim violated the applicable statute of repose that requires all claims be brought within three...more

US China Trade–Developments In Trade, IP, Antitrust And Securities

Dear Friends, There have been major developments in the trade, policy, US Exports to China, CFIUS, Chinese Antidumping, US/Chinese antitrust, and securities areas....more

SEC Announces First Settled Proceeding Against Municipal Issuer under MCDC Initiative

The SEC announced July 8 its first settled administrative proceeding against a municipal issuer under its Municipal Continuing Disclosure Cooperation (“MCDC”) Initiative. In its Order, the SEC charged Kings Canyon Joint...more

SEC Requires Floating NAV for Institutional Money Market Funds; IRS Eases Tax Reporting Burden for Fund Investors

Yesterday, a divided Securities and Exchange Commission adopted rules that will require floating net asset values (NAVs) for institutional money market funds and give most money market funds the discretion to impose liquidity...more

Equity Compensation Alphabet Soup – ISO, NSO, RSA, RSU and more

Startups and public companies alike often use equity to help attract, retain and incentivize talented employees and other service providers. The different forms of awards have proliferated in the past several years, though,...more

2014 Changes to Delaware Corporate Law

Earlier this month, several significant amendments to the Delaware General Corporation Law (the DGCL) were approved. These amendments are substantially the same as the amendments originally proposed in April 2014 and will...more

SEC Approves Amendments to Rules Governing Money Market Funds

Yesterday, the U.S. Securities and Exchange Commission (“SEC”), by a vote of 3 to 2, approved amendments to Rule 2a-7 and other rules that govern money market funds under the Investment Company Act of 1940 (the “Amendments”)....more

IR Executive Settles SEC Insider Trading Charges

The SEC filed a settled insider trading case against a partner in an investor relations firm who traded securities based on information he obtained from draft press releases he worked on for firm clients. The settled action...more

In This Case, Placement Agent Status Was Better Than Underwriter Status

As a general matter, California Corporations Code Section 25401 declares it unlawful to make an untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the...more

Big Brother Vs. Underfunded Enforcement

On July 5, 2014, in an opinion piece entitled “The Real Internal Revenue Scandal,” the editorial board of The New York Times noted that “every dollar spent on internal revenue service enforcement yields $6 in additional...more

U.S. District Court Limits the Extraterritorial Application of U.S. Bankruptcy Law but Important Considerations for Foreign...

On July 6, 2014, Judge Jed S. Rakoff, United States District Judge for the Southern District of New York, declined to extend the reaches of section 550(a) of the Bankruptcy Code abroad to permit the recovery of funds that...more

AIFMD: Renewed Focus on Its Impact on Non-EU Managers of Private Funds

Although AIFMD took effect in key EU member states in 2013, in practice, its one-year grace period largely gave managers of alternative investment funds an opportunity to postpone compliance until 22 July 2014....more

Texas Ruling Highlights the Need for Shareholder Agreements in Closely Held Corporations

On June 20, 2014, the Texas Supreme Court issued a landmark decision that brings to light the importance of every corporation, especially closely held corporations, having a comprehensive shareholders' agreement that...more

PCAOB Focuses on Cybersecurity at Standing Advisory Group Meeting

Panelists at the PCAOB’s June 25 Standing Advisory Group Meeting discussed cybersecurity and the potential implications for financial reporting and auditing. Some of the highlights from the panel include the following...more

Bank Loans Grow In Municipal Market While Bond Issues Shrink

Significant developments in the way municipal entities borrow money are under way. Last year, issuances of new municipal bonds in traditional municipal bond markets dropped to near historic lows and the outlook for 2014 is...more

FINRA Proposes to Adopt Rules on Quotation Requirements for OTC Equity Securities

The Financial Industry Regulatory Authority, Inc. is proposing to adopt rules governing the quotation requirements applicable to over-the-counter (OTC) equity securities. The rules would establish minimum standards for...more

Former Qualcomm EVP Pleads Guilty to Insider Trading

For former Qualcomm Inc. Executive Vice President Jing Wang the cover-up not only failed but increased his liability. The former executive pleaded guilty this week to securities fraud based on his insider trading, money...more

CFTC Seeks Comment on ICE Clear Europe Portfolio Margining Proposal

The Commodity Futures Trading Commission has requested public comment on a petition submitted by ICE Clear Europe Limited to amend an order issued by the CFTC on May 30...more

Citigroup Settles with DOJ for $7 Billion

Citigroup announced last week that it will pay $7 billion to end an investigation by the U.S Department of Justice into misconduct related to its mortgage securitization practices. The blockbuster settlement came days before...more

On My Bookshelf: Flash Boys

In the spring of 2007, Brad Katsuyama, a successful New York banker at the Royal Bank of Canada (RBC), thought something was wrong with his computer. He was trying to buy 10,000 shares of Intel, offered at $22. But the moment...more

What Is A Cap Table, Why Do You Need One and What Should It Look Like?

At its most basic level, a cap table is just a list of your company’s securities (i.e., stock, options, warrants, etc.) and who owns those securities. A cap table should tell you “who owns what.” More complex cap tables may...more

ISDA Section 2(a)(iii) Amendment Limits Prerogatives of Non-Defaulting Parties

On June 19, the International Swaps and Derivatives Association (ISDA) published a long-awaited standard amendment to Section 2(a)(iii) of the ISDA Master Agreement (the Master Agreement). Section 2(a)(iii) of the Master...more

New SAFE Rules Facilitate Registration for Overseas Financing and Investment by Chinese Domestic Residents

The Chinese foreign exchange control authority recently adopted material changes to the regulatory framework on overseas financing and investment via special purpose vehicles undertaken by Chinese domestic residents and the...more

SEC Staff Legal Bulletin Addresses Use of Proxy Advisory Firms by Advisers and Reliance by Proxy Advisory Firms on Proxy Rules...

The SEC’s Divisions of Investment Management and Corporation Finance issued Staff Legal Bulletin No. 20 (the “Guidance”) which provides guidance from the Division of Investment Management to investment advisers on their...more

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