On February 15, 2019, Nasdaq filed an immediately effective rule proposal to permit “direct listings” without an IPO and, in doing so, joins the NYSE, whose proposal to permit direct listings was approved by the SEC in February 2018.
On February 19, 2019, the Securities and Exchange Commission published a rule proposal entitled “Solicitations of Interest Prior to a Registered Public Offering” that would extend the “test-the-waters” provisions of Section 5(d) of the Securities Act of 1933 (the Act), currently available only to emerging growth companies (EGCs), to all issuers of registered securities.
The Securities and Exchange Commission has again had to confront how to react to a mandatory arbitration provision that would have the effect of denying investors the ability to pursue federal securities law claims as a class action in a federal court. Mandatory arbitration provisions are controversial as a policy, legal and political matter and have presented the SEC with challenges.
On February 6, 2019, the SEC staff issued two new identical C&DIs that apply to Item 401 of Regulation S-K, Question 116.11, and Item 407 of Regulation S-K, Question 133.13. The new interpretation provides guidance on disclosure when a director or a director nominee voluntarily provide self-identified diversity characteristics, such as their race, gender, ethnicity, religion, nationality, disability, sexual orientation, or cultural background, and the director or nominee has consented to disclosure of these diversity characteristics.
Locke Lord’s deal teams continued to impress in 2018, ranking in the Top 3 by deal count for M&A in Texas, according to Mergermarket data. The Firm was credited with advising on 46 deals in Texas, a 28 percent jump year over year and up three spots from 2017.
On January 29, 2019, the SEC announced settled enforcement actions against four companies for failures to maintain internal control over financial reporting (“ICFR”) as required by Section 13(b)(2)(B) of the Securities Exchange Act and Rule 13a-15 over extended periods even though in most cases material weaknesses in their ICFR were disclosed.
On December 20, 2018, the Office of Compliance Inspections and Examinations (“OCIE”) of the Securities and Exchange Commission (“SEC”) issued its 2019 examination priorities letter. OCIE releases examination priorities annually in order to provide a summary of key areas where OCIE intends to focus resources in the coming year.
On January 27, 2019, the Division of Corporation Finance posted an announcement regarding recommencement of operations. The Staff is returning to normal operations today and anticipates addressing filings, submissions and other requests for staff action, absent compelling circumstances, in the order received by the Staff.
Two year-end decisions by the Delaware Court of Chancery provide practical guidance for mergers and other transactions, one on the meaning of “commercially reasonable efforts” and other commonly used standards of efforts and the...