Helping Clients Access the Capital Markets and Stay Apprised of Regulatory Developments

SEC Adopts New Restrictions on 10b5-1 Plans,‎ Related Disclosure Requirements and Section 16 Filing Changes

On December 14, 2022, the SEC unanimously adopted cooling-off periods and other changes to how plans adopted under Rule 10b5-1 (“10b5-1 Plans”) will work going forward.  Executive officers and directors of public companies frequently use 10b5-1 Plans to conduct sales of their company’s stock at a time when they have material non-public information (“MNPI”) about the company or its securities, which is permitted if they entered into the plan at a time that they did not have MNPI and gave up control over the sales.

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Recent Delaware and Other Decisions Relevant to the MBCA

This article describes two recent Delaware decisions relevant to the Model Business Corporation Act (the “MBCA”). One of those decisions relates to a board’s determination of the availability of surplus to support distributions to stockholders, and the other upholds, at the motion to dismiss stage, a claim that the directors breached their fiduciary duty by not taking action in response to a stockholder’s demand. In addition, this article describes recent decisions in MBCA states addressing the meaning of “fair value” and the application of director liability shields to exculpate directors from monetary liability. The MBCA is the basis for the corporation statute of at least 36 states.

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Lessons From SEC Enforcement Actions Involving Corporate Lawyers

The Securities and Exchange Commission (“SEC”) has recently brought several ‎enforcement actions that directly or indirectly involved lawyers. These actions provide ‎reminders to lawyers of their professional responsibility in representing clients, including in ‎connection with giving legal opinions and responding to auditors.‎

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SEC Proposes Climate-Related Disclosure Requirements

Earlier this week, the SEC announced proposed rules (Release No. 33-11042) for new, climate-related disclosures. The proposals dramatically expand the requirements of the SEC’s 2010 guidance on climate-related disclosures.  While most large companies have been providing some climate-related information as part of ESG reporting in CSR or Sustainability Reports outside of their SEC filings, these rules, if adopted, will necessitate a significant overhaul of companies’ climate-related analysis, procedures, and reporting and will subject any climate-related disclosure to stricter securities law liability standards.

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