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The Securities Edge Securities Blog for Middle-Market Companies

Monthly Archives: October 2014

Just in time for Halloween: Are the latest PCAOB auditing standards a treat or a trick?

Posted in Bob's Upticks

The SEC has approved new PCAOB auditing standards relating to related party transactions, significant unusual transactions, and financial relationships and transactions between a company and its executives, including executive compensation.  You can find the SEC’s release on the new standards here.

When the PCAOB first proposed these standards, a number of us were concerned that the auditing profession might be getting into the business of second-guessing not only disclosures on related party transactions and executive compensation, but also the substance of transactions and compensation.  For one thing, the proposal stated that auditors would need to assess the risks associated with these areas, which led the Society of Corporate Secretaries and Governance Professionals and others to politely suggest that the PCAOB should stay away from the area (you can find the Society’s comment letter here).

In response to these comments, the PCAOB tweaked its language a bit and gave some mild assurances that its intent was misunderstood and that it didn’t want to get into the weeds as feared.   However, references to executive compensation stayed in the standards, and their wording doesn’t rule out the possibility that those weeds might be gotten into after all.

So when your auditors offer you this new piece of candy for Halloween, maybe you should ask for some reassurances before you bite into it.

What do you think?


The Securities Edge launches Bob’s Upticks

Posted in Announcements

To our readers: As you may have noticed, this week we launched a new feature for The Securities Edge.  We call our new feature “Bob’s Upticks,” which will be authored by our very own Bob Lamm.  We are excited to add this new “blog within a blog” and to share Bob’s extensive and deep securities… Continue Reading

My inaugural Uptick: How about never? Does never work for you?

Posted in Bob's Upticks

I have read several reports quoting Mary Jo White, Chair of the SEC, as saying that the remaining Dodd-Frank corporate governance rulemakings will be out by year-end.  Admittedly, the reports aren’t clear as to what Chair White means.   Does she mean that the so-called pay ratio rule will be adopted in final form by year-end (in which case the disclosures wouldn’t be required until 2016)?  Or that by year-end the Commission will have proposed rules on hedging, clawbacks and pay-for-performance?  All of the above?  It’s anyone’s guess.

I have also read the daily emails I receive from the SEC entitled “Upcoming Events Update.”  (I get several of these “Updates” every day, even though they are identical and don’t seem to have been updated at all.  For those of you who don’t get these emails, they purport to announce things like every meeting of the SEC and every speech to be given by Commissioners and Staff members.)  For the last month or two, no open meetings of the SEC have been scheduled (and it’s virtually impossible for these rules to be proposed or adopted otherwise than at an open meeting).  So when I saw today that Continue Reading


No more secret identities: Broker-dealers may soon be required to identify beneficial owners of legal entity customers

Posted in Capital Raising

As we blogged about in May, the Bank Secrecy Act (“BSA”), which requires financial institutions in the United States to assist U.S. government agencies to detect and prevent money laundering, applies to entities that we may not traditionally think of as “financial institutions,” including securities broker or dealers. Compliance with the BSA is no easy… Continue Reading

10 nuggets on corporate governance hot topics

Posted in Corporate Governance

On September 30, Bob Lamm moderated a panel at a “Say-on-Pay Workshop” held during the 11th Annual Executive Compensation Conference in Las Vegas, Nevada.  The Conference is an annual event sponsored by TheCorporateCounsel.net and CompensationStandards.com – and emceed by our good friend, Broc Romanek – and features many of the pre-eminent practitioners in corporate governance… Continue Reading

Video interview: Discussing the Alibaba IPO with LXBN TV

Posted in IPOs

Following up on my recent post on the subject, I had the opportunity to discuss Alibaba’s record-breaking IPO with Colin O’Keefe of LXBN. In the interview, I share my thoughts on some issues worth watching and offer a few takeaways for American companies.

Wrong turn?: Is the SEC looking to further expand its regulatory jurisdiction through the disclosure process?

Posted in Disclosure Guidance

In the wake of the recent financial crisis, the Dodd-Frank Act created the SEC Investor Advisory Committee with the stated purpose of advising the SEC on (i) regulatory priorities of the SEC; (ii) issues relating to the regulation of securities products, trading strategies, and fee structures, and the effectiveness of disclosure; (iii) initiatives to protect… Continue Reading