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SEC Raises Threshold for Additional Disclosures Under Rule 701

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Rule 701 under the Securities Act of 1933 provides an exemption from registration for securities issued by non-reporting companies pursuant to compensatory arrangements. The exemption covers securities offered or sold under a plan or agreement between a non-reporting company and the company’s employees, officers, directors, partners, trustees, consultants, and advisors.... Read More

Topics: Executive Compensation, Public Companies and Securities

SEC Targets Perqs in Another Enforcement Action

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The SEC has targeted disclosure of executive perquisites in another settled enforcement action.  According to the SEC, the issuer did not follow the Commission’s standard regarding disclosure of perquisites, which provides that: An item is not a perquisite or personal benefit if it is integrally and directly related to the... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities

SEC Reduces Thresholds for Smaller Reporting Company Definition and Requires Mandatory Use of Inline XBRL

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The SEC has long recognized that smaller issuers should be subject to somewhat less stringent disclosure standards than larger companies. The SEC has referred to this as “scaled disclosure” and has embodied the idea in a series of rules for smaller reporting companies, or SRCs.  The SEC has adopted final... Read More

Topics: Executive Compensation, Public Companies and Securities

SEC Commissioner Believes Rule 10b-18 should not be Available if Executives are Selling

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SEC Commissioner Robert J. Jackson Jr. recently gave his views on stock buybacks.  Much of the speech focused on Rule 10b-18 which is used by public companies when conducting stock buybacks.  Rule 10b-18 provides a safe harbor from securities-fraud liability if the pricing and timing of buyback-related repurchases meet certain conditions.... Read More

Topics: Executive Compensation, Public Companies and Securities

SEC Issues FAQs on Compensation Plan Proposals Included in Proxy Statements

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The SEC has issued a series of frequently asked questions, which in SEC speak are referred to as Compliance and Disclosures Interpretations (or C&DIs for short), on proxy statements and proxy solicitations.  In general the C&DIs replace previously issued telephone interpretations, but the lead in notes where substantive changes have been... Read More

Topics: Employment, Executive Compensation, Public Companies and Securities

Advocacy Group Requests SEC to Investigate Irregularities in Pay Ratios

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An advocacy group, Public Citizen, has requested the SEC to investigate irregularities and inconsistencies in pay ratios reported by public companies. According to the group’s press release: The letter documents a number of irregularities and inconsistencies in the reported data, highlighting dramatically different reported figures from similar companies in the... Read More

Topics: Executive Compensation, Public Companies and Securities

Fintech Company Subject to SEC Enforcement Action for Exceeding Rule 701 Option Grant Limit

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Subject to its limits, Rule 701 permits non-reporting companies to grant employees equity without registration under the Securities Act of 1933.  One component of Rule 701 requires certain disclosure materials to be delivered to employees if the aggregate sales price or amount of securities sold during any consecutive 12-month period... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities