In other breaking news that many may have missed, Orbitz Worldwide, Inc. recently reported in its most recent 10-Q that a handful of employees of a Hilton-branded hotel were paid wages via direct deposit into bank accounts maintained with Bank Melli. The obvious question is why is Orbitz reporting on seemingly immaterial activities of a… Continue Reading
Category Archives: Disclosure Guidance
Subscribe to Disclosure Guidance RSS FeedSocial media as a disclosure channel – slow but steady
Posted in Disclosure GuidancePublic companies are beginning to cautiously adopt social media as a disclosure channel. This area has experienced substantial changes lately as the SEC moved from a posture of threatening action against Netflix’s CEO for a post he made on his personal Facebook page to adopting a more relaxed and expansive position. This was really just… Continue Reading
SEC relaxes restrictions on social media postings (but Regulation FD still applies)
Posted in Disclosure GuidanceThe SEC tiptoed into the twenty-first century as the agency validated the use of social media sites in certain situations for disclosure of information by publicly traded companies. This social media disclosure is subject to some constraints, but it is a positive move for public companies, shareholders and potential investors who are social media users. … Continue Reading
Cybersecurity legislation continues to move forward
Posted in Disclosure GuidanceSenator Jay Rockefeller (D., West Virginia), the most vocal proponent of cybersecurity legislation, has renewed his focus on cybersecurity legislation. He has sponsored previous cybersecurity-related legislation, but has been unable to implement any meaningful legislation in this area. His prior sponsorship of the proposed Cybersecurity Act of 2012 initially seemed to draw support in the… Continue Reading
Securities Law 101 (Part III): Watch your mouth! Regulation FD’s impact on (selective) disclosure
Posted in Disclosure GuidanceThis is the third part of our Securities Law 101 series. Because capital raising is such a critical function for middle market companies, we designed this series to introduce their management teams to some of the fundamental concepts in securities law. We hope that this series will prevent some of the most common mistakes management… Continue Reading
Proposed campaign contribution disclosure rules may be coming as early as April (but not likely)
Posted in Disclosure GuidanceAs first reported by Professors Lucian Bebchuk and Robert J. Jackson, Jr. in their recent posting on the Harvard Law School Forum on Corporate Governance and Financial Regulation, the SEC may take action to issue proposed rules on corporate political spending disclosures by public companies as early as the second quarter of this year. This… Continue Reading
Video Interview: Discussing the Regulation FD concern with Netflix over Facebook post on LXBN TV
Posted in Disclosure Guidance, Technology Company IssuesFollowing up on my post on the subject, I had the chance to speak with Colin O’Keefe of LXBN regarding the SEC sending a Wells notice to Netflix and its CEO over a Facebook post the latter made. In the interview, I explain what happened, why the SEC is displeased and why it needs to… Continue Reading
Netflix CEO’s Facebook post leads to possible Regulation FD action by SEC – Time for some changes
Posted in Disclosure Guidance, Technology Company IssuesThe use of social media as a public company information channel encountered a roadblock on December 5, 2012 as Netflix, Inc. and its CEO, Reed Hastings, both received Wells notices from the SEC regarding a prior Facebook post that Mr. Hastings had made. A Wells notice is a notification from the SEC that it intends… Continue Reading
Are political contribution disclosure rules for public companies coming in the near future?
Posted in Disclosure GuidancePetition and comment letters urging the SEC to create rules requiring public companies to disclose their political contributions may finally be gaining some traction. We previously blogged about this petition, which was submitted by a group of ten law professors in response to the Supreme Court’s opinion in the Citizens United v. Federal Election Commission… Continue Reading
Careful with that tweet! Social media considerations for public companies
Posted in Disclosure Guidance, Technology Company IssuesSocial media use has experienced a meteoric rise. According to Tweetsmarter (a social media blog), the top five social media sites (Facebook, Twitter, LinkedIn, Google+ and Pinterest) have 1.8 billion users. Many companies have also embraced social media use as a cheap and efficient channel for the dissemination of information. Good examples here include Best… Continue Reading
Cybersecurity issues continue to draw attention
Posted in Disclosure Guidance, Technology Company IssuesCybersecurity issues continue to be a hot topic for companies. As discussed in my prior blog posts, “Get ready for increased cybersecurity disclosure requirements” and “SEC pushes for disclosure of hacking incidents”, the SEC continues to focus on cybersecurity and data breach items and has now begun to encourage public companies to disclose them, even… Continue Reading
Did Apple violate Regulation FD at its iPhone 5 release conference?
Posted in Disclosure GuidanceOn September 12, 2012, Apple, Inc. held a highly anticipated conference at which it announced the upcoming release of the latest model of the iPhone. These types of conferences have been part of Apple’s standard operations for many years and seem to be a key element of its marketing strategy. Although attendance is limited to… Continue Reading
SEC pushes for disclosure of hacking incidents
Posted in Disclosure Guidance, Technology Company IssuesA number of well-known companies, including Zappos.com, Google, Quest Diagnostics, Eastman Chemcial and AIG, have recently experienced actual or potential intrusions into their computer systems and related confidential data. Some of these incidents have been active criminal attacks by sophisticated hackers, while others have resulted from situations such as lost or stolen laptops. The frequency… Continue Reading
You asked for it: Bipartisan agreement in congress
Posted in Disclosure GuidanceFinally, we have had some recent bipartisanship in Congress. The only problem, of course, is that the recent bipartisanship further burdened public companies with additional disclosure requirements. As Broc Romanek noted in his blog last week, Congress overwhelmingly passed the Iran Threat Reduction and Syria Human Rights Act of 2012 requiring public companies to disclose… Continue Reading
Get ready for increased cybersecurity disclosure requirements
Posted in Disclosure Guidance, Technology Company IssuesNew mandated cybersecurity disclosure requirements appear to be imminent. Cybersecurity has become a critical issue for most companies, and almost all companies today face cybersecurity risks due to the substantial increases in the volume of data and information stored online, the rise of multiple platforms for accessing data and the sophistication of criminal hackers. Cyber… Continue Reading
That sounds risky: New generation of risk factors for technology companies
Posted in Disclosure Guidance, Technology Company IssuesThe “Risk Factors” section of any disclosure document is vital to the protection of the issuer. Generations of securities lawyers and accountants have worked into the night to develop lists of risks that would make any sane potential investor run away screaming. Most of us have seen innumerable examples of conventional risk factors like competition,… Continue Reading
New MD&A guidance for smaller financial institutions
Posted in Disclosure Guidance, Financial InstitutionsThe SEC Division of Corporate Finance recently issued guidance to smaller financial institutions concerning Management’s Discussion and Analysis and accounting policy disclosures. The guidance can be found in CF Disclosure Guidance: Topic No. 5, dated April 20, 2012 and amounts to rules to follow for future filings that should not be ignored. The Division focused… Continue Reading
Are more disclosure requirements for public companies in the works?
Posted in Disclosure GuidanceRecent comments from SEC commissioner Luis Aguilar indicate that the SEC may consider new rules that would require public companies to disclose political expenditures. In his recent speech from February 24, 2012, Commissioner Aguilar informally called on the SEC to adopt political spending disclosure rules in light of the landmark U.S. Supreme Court Case, Citizens… Continue Reading
Conflict minerals rule may be reaching a conclusion
Posted in Disclosure GuidanceAs mentioned on Brock and Dave’s Blog and a recent article by Bloomberg, the conflict minerals disclosure required by the Dodd-Frank Act appears to be close to final. These proposed rules are highly controversial because of the estimated high costs for public companies to comply with the new rules compared to the small perceived benefit… Continue Reading
New Cybersecurity Disclosure Obligations for SEC Filings
Posted in Disclosure Guidance, Technology Company IssuesRisks of Cyber Attacks If you are an executive for a public company, new SEC guidance requires you to consider cybersecurity in your ongoing periodic reports. As evidenced by the barrage of news reports over the past couple of years, cyber incidents have become very significant events for all types of companies. A recent example… Continue Reading
Disclosure Guidance for European Debt Exposure
Posted in Disclosure Guidance, Financial InstitutionsLast Friday, the SEC’s Division of Corporate Finance issued its fourth topic in its CF Disclosure Series, which periodically provides the SEC’s views on various topics. This time, the SEC addressed, what it believes to be, inconsistent disclosures on European sovereign debt holdings. The SEC reminds registrants, particularly bank holding companies, of their obligations to… Continue Reading
SEC May Have Grossly Underestimated the Costs of Proposed Conflict Mineral Disclosure Rules
Posted in Disclosure GuidanceSection 1502 of the Dodd-Frank Act mandates the SEC to adopt rules requiring reporting companies to disclose whether certain minerals used in production chains originate from the Democratic Republic of the Congo or its neighboring countries. Minerals sourced from these areas of central Africa often fund militia and other military groups’ operations which have exacerbated… Continue Reading
SEC Considering Petition to Adopt Rules Requiring Disclosure of Political Contributions
Posted in Disclosure GuidanceThe SEC is currently considering a petition submitted by a group of 10 law professors asking the SEC to adopt rules that would require public reporting companies to disclose political contributions in their annual proxy statements. As justification for the proposal, the petitioners assert that there is empirical evidence that indicates public company shareholders are… Continue Reading
Controversial Bill Would Require Additional “Social Disclosures” for Reporting Companies
Posted in Disclosure GuidanceThe Dodd-Frank Act mandated the SEC to adopt rules to require reporting companies to make certain “social disclosures.” For example, Section 1502 of Dodd-Frank requires the SEC to adopt disclosure rules that will require reporting companies to make certain disclosures if “conflict minerals” are “necessary to the functionality or production” of its manufactured products. Metals… Continue Reading