Corporate & Securities Law

SEC Adopts Credit Rating Agency

Posted on December 08, 2008
SEC Adopts Credit Rating Agency Reform; Differentiation for Future ActionThe SEC approved a series of measures to increase transparency and accountability at credit rating agencies, and ensure that firms provide more meaningful ratings and greater disclosure to investors...

German Central Bank Chief Outlines

Posted on December 07, 2008
German Central Bank Chief Outlines Vision of Financial Regulation Reform The coming reform of financial regulation must enhance transparency concerning unregulated business areas and markets, including hedge funds, OTC traded derivatives and off-balance-sheet vehicles, emphasized Axel Weber, President of the Deutsche Bundesbank...

Corp Fin Director White Defends

Posted on December 07, 2008
Corp Fin Director White Defends SEC's Disclosure RegimeCorporation Finance Director John White said that the SEC's disclosure regime was one process that did not fail during the credit crisis. In remarks at the American Bar Association Section of Business Law's fall meeting, he said that the disclosure rules work and, while they can be improved upon, should be largelly preserved...

Indenture did not Require Timely

Posted on December 03, 2008
Indenture did not Require Timely SEC FilingBy Rodney TonkovicAssociate Writer-AnalystCCH Federal Securities Law ReporterIn a case of first impression, an Eighth Circuit panel affirmed a district court judgment that a company had no obligation under an indenture to file timely reports with the SEC...

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Union Pension Fund to Head Freddie

Posted on December 03, 2008
Union Pension Fund to Head Freddie Mac Class SuitJudge John Keenan named the Teamsters' Central States, Southeast and Southwest Areas Pension Fund as lead plaintiff in a class action by holders of common stock of the Federal Home Loan Mortgage Company brought in the Southern District of New York...

Maryland Sets Forth Electronic

Posted on December 03, 2008
Maryland Sets Forth Electronic Form D Filing ProceduresBetween September 15, 2008 to March 15, 2009, issuers making securities offerings under either Rule 505 or 506 of federal Regulation D must file the version(s) of Form D accepted by the SEC at the time of filing, along with a manually executed Form U-2, Uniform Consent to Service of Process, when the version of Form D filed in connection with the offering does not contain a consent to service of process, and any other information required by the Maryland rules pertaining to Rule 505 or 506, including the applicable fee...

9th Circuit Rejects Collective

Posted on December 01, 2008
9th Circuit Rejects Collective ScienterMust a fraud plaintiff plead facts showing that the particular individual who made allegedly actionable misstatements acted with scienter in order to recover against a corporate defendant? The 9th Circuit, in Glazer Capital Management LP v...

LLC Managers Not Subject to Florida

Posted on November 29, 2008
LLC Managers Not Subject to Florida Long Arm JurisdictionA Florida appellate court has ruled that the non-resident managers of a limited liability company were not subject to personal jurisdiction in Florida for the LLC's violations of the Florida Blue Sky Law...

NASAA to Host Regulatory Reform

Posted on November 26, 2008
NASAA to Host Regulatory Reform RoundtableThe North American Securities Administrators Association (NASAA) has announced that it will host a Regulatory Reform Roundtable on December 11 to outline the essential elements that the incoming administration and Congress should consider in the ongoing debate over the future of the nation?s financial services regulatory structure...

Risk Management at Top of List

Posted on November 26, 2008
Risk Management at Top of List for Financial Regulatory ReformIt has become clear that the financial market crisis was partially caused by a failure of risk management. This is somewhat perplexing because the concept of risk management has been around for some years...

Missouri Implements Electronic

Posted on November 24, 2008
Missouri Implements Electronic Form D Filing ProceduresIssuers intending to make a Rule 506 securities offering in Missouri during the electronic Form D transition period--September 15, 2008 to March 15, 2009--must paper file directly with the Missouri Securities Division: (1) One manually signed copy of the SEC-filed Form D (including the appendix); (2) a Form U-2, Uniform Consent to Service of Process; and (3) $100...

Probable Treasury Pick Called for

Posted on November 22, 2008
Probable Treasury Pick Called for Reform of Securitization Earlier This YearNY Fed President Timothy Geithner, who is the likely Treasury Secretary under President Obama, called for the reform of securitization in the first quarter of this year based on strongly enhanced risk management...

Fund Disclosure, Money Market Redemption

Posted on November 21, 2008
Fund Disclosure, Money Market Redemption Rules AdoptedThe SEC adopted rule amendments designed to improve mutual fund disclosure by providing investors with a summary prospectus containing key information in plain English in a clear and concise format, and by enhancing the availability on the Internet of more detailed information to investors...

Sixth Circuit's "Most Plausible"

Posted on November 20, 2008
Sixth Circuit's "Most Plausible" Standard Did Not Survive TellabsA 6th Circuit panel recognized that the law in that circuit, that plaintiffs are "only to the most plausible of competing inferences," was no longer valid after the U.S. Supreme Court's Tellabs decision...

"Stormy" Weather? The 2nd Circuit

Posted on November 20, 2008
"Stormy" Weather? The 2nd Circuit Didn't "Notice"So-called "storm warnings" that a district court found sufficient to derail a fraud action against The Hartford Financial Services Group failed to put investors on inquiry notice for limitations purposes...

SEC Chair Will Convene Meeting

Posted on November 20, 2008
SEC Chair Will Convene Meeting of International Securities RegulatorsWith many commenters noting that this is an international financial crisis needing an international regulatory response, SEC Chairman Christopher Cox said that he will convene a meeting of the International Organization of Securities Commissions (IOSCO) Technical Committee on Monday, November 24 by teleconference to discuss urgent regulatory issues in the ongoing credit crisis...

European Commission Proposes Methods

Posted on November 19, 2008
European Commission Proposes Methods to Add to Big Four Audit FirmsIn an effort to increase the number of global audit firms, the European Commission has embarked on a consultation presenting two possible ways forward: the deregulation of the capitalization of audit firms and lowering other non-capital barriers to access...

DC Circuit Denies Full Review of

Posted on November 18, 2008
DC Circuit Denies Full Review of PCAOB Constitutional Challenge by 5-4 VoteThe US Court of Appeals for the DC Circuit has denied full or en banc review of a split panel decision upholding the PCAOB as constitutional by a 5-4 vote. Given that four circuit judges wanted a full review of the constitutional issues surrounding the Board?s creation makes it almost certain that Supreme Court review will be sought...

North Dakota Implements Temporary

Posted on November 17, 2008
North Dakota Implements Temporary Form D For Rule 506 OfferingsIssuers intending to make an offering under Rule 506 of federal Regulation D must file Temporary Form D (including the state appendix), a Form U-2, Uniform Consent to Service of Process, and $100 fee within 15 days after the first sale of the securities in North Dakota...

Senator Will Reintroduce in 111th

Posted on November 17, 2008
Senator Will Reintroduce in 111th Congress Bill Requiring SEC Registration of Hedge Fund AdvisersSen. Charles Grassley said that he would reintroduce in the 111th Congress a bill requiring hedge fund advisers to register with the SEC, effectively providing a legislative override of the federal appeals court Goldstein ruling...

G20 Sets Forth Goal of Massive

Posted on November 15, 2008
G20 Sets Forth Goal of Massive Global Reform of Financial RegulationThe G20 has proposed a massive overhaul of the entire system of financial regulation based on transparency, risk management, the convergence of accounting standards, and the global sharing of information among regulators...

President-Elect Obama Details Key

Posted on November 15, 2008
President-Elect Obama Details Key Principles to Guide Federal Financial Regulation ReformAs the nation approaches the most fundamental reform of federal regulation of the financial and securities markets since President Franklin Roosevelt?s New Deal, the most central personality to the effort will obviously be President Barack Obama...

SEC Urged Not to Suspend Fair Value

Posted on November 14, 2008
SEC Urged Not to Suspend Fair Value Accounting; but Rather Use MD&A to Help Investors Understand FAS 157 in Illiquid MarketsIn a letter to the SEC giving input on the Commission?s study of mark-to-market accounting mandated by the Emergency Economic Stabilization Act, the Center for Audit Quality said that the current use of fair value measurements for financial instruments under FASB Standard No...

Ohio Proposes Electronic Filing

Posted on November 13, 2008
Ohio Proposes Electronic Filing Rule for Investment Company and Rule 506 Offerings and Prohibition Against Senior-Specific Professional DesignationsRule changes proposed bythe Ohio Securities Division would permit investment companies andRule 506 issuers to make electronic filings, prohibit industry personsfrom using certain senior-specific professional designations, requireinvestment advisers to file Part II of Form ADV, clarify an investmentadviser's use of the IARD and CRD, retitle the NASDAQ to be consistentwith federal nomenclature, add the NASDAQ to the exchange listing exemption and substitute "FINRA" for "NASD...

Kansas Implements Electronic Form

Posted on November 13, 2008
Kansas Implements Electronic Form DBetween September 15, 2008 and March 16, 2009, issuers offering or selling securities under Rule 504, 505 or 506 of federal Regulation D, or Section 3(a)(11) of the Securities Act of 1933 and Rule 147, that intend to claim the Kansas uniform limited offering, Rule 506 or accredited investor exemptions must file:* Temporary Form D; or* Printed version of the notice of sale on Form D that was filed electronically with the SECA paper filing with $250 made payable to the Kansas Securities Commissioner must be sent to the Office of the Kansas Securities Commissioner at 618 South Kansas Avenue, Topeka, Kansas 66603-3804...

Colorado Modifies Investment Company

Posted on November 13, 2008
Colorado Modifies Investment Company Securities and Section 3(b)/4(2) 1933 Act Exemptions and Adopts Prohibition Against Industry Persons' Use of Senior Certifications or DesignationsEffective December 1, 2008:Modifications to exemptions for securities issued by investment companies and for transactions in securities made under Section 3(b) or 4(2) of the Securities Act of 1933 are put in place by the Colorado Securities Division...

Former SEC Chair Ruder Calls for

Posted on November 13, 2008
Former SEC Chair Ruder Calls for Regulation of Hedge Funds with SEC as Risk Management AssessorAs Congress examines the role of hedge funds in the ongoing financial crisis, former SEC Chair David Ruder urged Congress to empower the SEC to register hedge fund advisers and require them to disclose hedge fund risks and other activities...

IASB Overseer Advises G20 to Work

Posted on November 13, 2008
IASB Overseer Advises G20 to Work with Standard Setters on Fair Value AccountingIn a letter to the G20 Summit, IASB oversight chair Gerritt Zalm warned against changing fair value accounting standards without going through the IASB and FASB. In his view, the integrity of the entire standard-setting process would be compromised if fair value accounting standards were changed on an ad hoc basis outside of the process set up by the Boards...

Delaware Court Applies Business

Posted on November 12, 2008
Delaware Court Applies Business Judgment Rule to Merger Driven by Financial CrisisTaking judicial notice of the roiling market crisis, the Delaware Chancery Court applied the business judgment rule to a merger effectuated over a weekend and found that a shareholder challenging the deal stated a colorable claim for violation of the directors? duty of care...

CFTC Chair Urges Regulation by

Posted on November 12, 2008
CFTC Chair Urges Regulation by Objective by Three New Regulators; Replacing SEC and CFTCActing CFTC Chair Walter Lukken has called for a complete rewrite of the federal securities and commodities laws and the creation of three new regulators under principles-based regimes...

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