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Tag Archives: political expenditures

Political contributions disclosure: My Exchange Act report is bigger than yours

Posted in Bob's Upticks

As some of us contemplate which disclosure rules we’d like to do away with, others are thinking about new rules that would require more disclosure. One possible area of rulemaking relates to disclosure of political contributions. Regardless of one’s views of the merits of such disclosure, significant and vocal groups of shareholders advocate it, and for that reason alone it’s not something that companies (or regulators) can blithely ignore.

What I don’t understand is why those who are pressing for such disclosure seem to believe not only that it is imperative, but also that it must be included in Exchange Act reports, such as 10-Ks or 10-Qs. To the extent (albeit limited) that any securities lawyers are OK with political contributions disclosure in the first place, the insistence upon including it in a 10-K or 10-Q is a major turn-off, because doing so would lengthen those already voluminous reports and, more importantly, would subject a company to Exchange Act liability.

I’ve spoken to one of the principal advocates of such disclosure – who, by the by, is a smart and decent man – about this insistence. I asked why, for example, he’d oppose posting the information on a company’s website, or including it in a supplemental report (both of which are the current norms for such disclosure) outside the framework of the Exchange Act. He countered by saying, first, that only an SEC rule would require all public companies to provide the information and that only an SEC rule would set universal disclosure standards. I disagree; it seems to me that both of those goals could be achieved through industry standard-setting or exchange listing standards. But even if he’s right and the SEC were to impose requirements, that doesn’t mean that the disclosure should have to be in an Exchange Act report. No offense to my smart and decent friend, but I’m still waiting for an answer.

As we approach disclosure “reform” with hopes that the web will offer us some respite from ever-longer SEC filings through more “layered” disclosure, much of it posted on the web, and not all of which needs to be printed or “filed” or even “furnished,” it seems anomalous if not downright ill-advised to insist upon this particular push to make our filings look more and more like doorstops. The good news is that thus far the SEC has shown little or no interest in rulemaking in this area, but time will tell.

Your thoughts?

Bob

New SEC Chair: Mary Jo White

Posted in Disclosure Guidance

The mission of the U.S. Securities and Exchange Commission (“SEC”) is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. This sounds great, but how does the SEC actually carry out its mission? The answer lies in the SEC’s oversight and regulation function of the key participants in the securities world,… Continue Reading

Proposed campaign contribution disclosure rules may be coming as early as April (but not likely)

Posted in Disclosure Guidance

As 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

Are political contribution disclosure rules for public companies coming in the near future?

Posted in Disclosure Guidance

Petition 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

Are more disclosure requirements for public companies in the works?

Posted in Disclosure Guidance

Recent 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