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

Nasdaq Introduces Board Diversity Requirements

On August 6, 2021, the U.S. Securities and Exchange Commission approved Nasdaq’s proposed rule regarding diversity of boards of directors.[1] The approved rule requires that most companies listed on Nasdaq (i) “[p]ublicly disclose board-level diversity statistics using a standardized template,” and (ii) “[h]ave or explain why they do not have at least two diverse directors.”[2]

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Charges Against Nikola Founder Provide Reminder to Use Caution in All Public Statements and Offer Governance Lessons

On July 29, 2021, both the SEC and the U.S. Attorney for the Southern District of New York announced charges against Trevor Milton, the founder, former CEO and former executive chairman of Nikola Corporation, a company engaged in the development of electric trucks. The complaint and indictment allege a series of misleading and inaccurate public statements by Milton on social media and elsewhere leading up to and after the company’s merger with a special purpose acquisition company (SPAC) through which Nikola became a public company, which included related private placements (PIPEs).

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SEC Reminds Companies That Earnings Management Can Have MD&A Consequences

In a settled enforcement action against Under Armour Inc. announced on May 3, 2020 the SEC reminded companies that managing earnings, even if accounted for correctly, can have MD&A implications triggering disclosure obligations.  According to the SEC order, Under Armour, in order to meet analyst projections and sustain its 20% quarter over quarter revenue growth record, pressured customers to move purchases forward into the current quarter, and did this for a number of consecutive quarters.

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SEC Provides Reminder that Form 12b-25 is a Disclosure Document

The SEC’s Division of Enforcement announced on April 29, 2021 settled enforcement ‎actions against eight companies for failure to adequately disclose the reasons for their inability to ‎timely file their Form 10-Ks or Form 10-Qs when filing a Form 12b-25 (commonly known as ‎‎“Form NT”) to extend the time to file those reports.‎

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Join Us for a Complimentary Webinar: Gearing up for Privacy & Cybersecurity in 2021

Organizations continue to face new issues, regulations and threats relating to privacy and cybersecurity. Over the next few months, Locke Lord lawyers will tackle some of your most pressing concerns in a series of complimentary webinars discussing practical, real-world challenges facing organizations, including compliance, business operations, data incidents, and investigations, litigation and enforcement. Sign up below for each program that interests you or sign up for the entire series.

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Locke Lord QuickStudy: Delaware Court of Chancery Reminds That Rights Plans Have Limits

The Delaware Court of Chancery, in The Williams Companies Stockholder Litigation, 2021 WL 754593 (Del. Ch. Feb. 26, 2021), struck down a shareholder rights plan (commonly known as a “poison pill”) adopted by The Williams Companies, Inc. at the outset of the pandemic that depressed the energy industry in order to forestall possible activist attacks.

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SEC Revision of MD&A – Focus on Future Uncertainties Disclosure

The Securities and Exchange Commission has continued its effort to update and ‎streamline the disclosure requirements for filings with the SEC. In November, the SEC adopted ‎amendments to the rules for Management’s Discussion and Analysis and related financial ‎disclosures. ‎ ‎ MD&A, because of its principles-based nature, is among the most challenging of ‎the disclosure requirements.‎

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