Recent Developments in SEC Enforcement and Market Intelligence
This update highlights recent developments in SEC enforcement, including the creation of the Office of Market Intelligence and specialized units within the Division targeting key issues such as municipal securities, public pensions, and market abuse. Changes stemming from the Dodd-Frank Act whistleblower provision have shifted the focus of complaint handling. Key concerns in financial reporting include executive compensation, internal controls, and unregistered securities offerings, particularly in Southern California. The update also addresses MD&A disclosures and corporate governance risks.
Recent Developments in SEC Enforcement and Market Intelligence
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Presentation Transcript
SEC Update: Current Issues Presenters: Douglas Besch James Moloney Diana Tani
Recent Developments in Enforcement • Creation of Office of Market Intelligence • Specialized units within the Division • Issues
Creation of Office of Market Intelligence Dodd-Frank Act whistleblower provision – change away from ITSFEA bounty program to address wider range of conduct; also impose formal tracking of such complaints SEC handling of tips, complaints, and referrals – how review is now centralized, matters triaged and assigned, high level risk analysis
Specialized Units Within the Division Municipal Securities and Public Pensions Asset Management Structured Securities and New Products Foreign Corrupt Practices Act Market Abuse
Current Issues In disclosure area: MD&A and executive compensation Financial reporting and internal controls In Southern California region – unregistered securities offerings and regulated entity violations continue to represent steady number of cases
Frequently Issued Corp Fin Comments Executive Compensation Matters Compensation Policies and Related Risks CD&A Performance Targets Benchmarking / Peer Groups
Frequently Issued Corp Fin Comments Corporate Governance Board's role in risk oversight Director Independence Executive Conflict of Interest / Comp Consultants
Frequently Issued Corp Fin Comments MD&A Fair Value Level 2 and 3 Measurements Off-Balance-Sheet Arrangements Debt vs. Equity Classification EITF 00-19 ASC 815
Frequently Issued Corp Fin Comments Material Contracts attachments / annexes Use of Experts / Consents Certifications 302 / 906
Frequently Issued Corp Fin Comments Mergers / Tender Offers PSLRA safe harbor Lock-Ups Going Private Transactions Fairness Opinions / Reports / Board Books 13e-3 Filing Persons Factors Considered Proxy Contests Participant Info / Rule 14a-12 Share Ownership / Arrangements
Division of Corporation Finance Comments Common across industries Industry-specific Suggestions for managing the process
Division of Corporation Finance Comments – Common Across Industries Goodwill MD&A Controls Error corrections Pensions Auditor’s Report
Division of Corporation Finance Comments – Industry-Specific Consumer Products and Technology Financial Services Pharmaceuticals and Life Sciences Construction
Division of Corporation Finance Comments – Suggestions for Managing the Process Understand the process Contemporaneous documentation Respond directly and cite literature Open dialogue
