Like a fashion trend that never fails to come back in style (we look fabulous in baggy jeans, btw), we're revisiting SEC enforcement actions involving public company executive perquisites – or "perks" – a topic we have...more
1/31/2025
/ Cooperation ,
Corporate Governance ,
Disclosure Requirements ,
Employee Benefits ,
Enforcement Actions ,
Executive Compensation ,
Perks ,
Publicly-Traded Companies ,
Regulation S-K ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Settlement
The SEC's wave of enforcement actions concerning "off-channel" communications did not abate in 2024. In total, the SEC announced more than 70 firms agreed to pay more than a half-billion dollars combined to settle charges for...more
12/20/2024
/ Broker-Dealer ,
CFTC ,
Civil Monetary Penalty ,
Electronic Communications ,
Enforcement Actions ,
Instant Messaging Apps ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Mobile Devices ,
Recordkeeping Requirements ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
The SEC was increasingly active in fiscal year (FY) 2024 in pursuing enforcement actions involving cybersecurity incidents and artificial intelligence (AI) (query how long society will continue to define AI; harkens to the...more
The SEC did not take its foot off the pedal in fiscal year (FY) 2024 when it came to prosecuting insider trading. In the third installment of Season's Readings, we consider several recent actions in which the agency secured...more
12/12/2024
/ Consent Order ,
Enforcement Actions ,
Enforcement Priorities ,
Failure-to-File ,
Hackers ,
Insider Trading ,
Material Nonpublic Information ,
Misappropriation ,
Regulation FD ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
The SEC on Oct. 22, 2024, announced charges against four companies for allegedly making materially misleading disclosures concerning the impact of cybersecurity incidents associated with the compromised SolarWinds' Orion...more
10/31/2024
/ Chief Information Security Officer (CISO) ,
Civil Monetary Penalty ,
Corporate Governance ,
Cyber Attacks ,
Cyber Incident Reporting ,
Cybersecurity ,
Disclosure Requirements ,
Enforcement Actions ,
Form 8-K ,
Material Misrepresentation ,
Misleading Statements ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Software ,
SolarWinds
The SEC continues to expand its cybersecurity enforcement authority to include allegations that a company's failure to monitor its managed security service providers (MSSP) amounts to violations of federal securities laws....more
7/9/2024
/ Accounting Controls ,
Chief Information Security Officer (CISO) ,
Corporate Governance ,
Cybersecurity ,
Data Breach ,
Disclosure Requirements ,
Enforcement Actions ,
Form 8-K ,
Incident Response Plans ,
Internal Controls ,
Personally Identifiable Information ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
The U.S. District Court for the Northern District of California on May 30, 2024, approved a settled final judgment against technology company Arista Networks' former chairman and CEO, Andreas "Andy" Bechtolsheim based on...more
6/11/2024
/ Acquisitions ,
Breach of Duty ,
Civil Monetary Penalty ,
Confidential Information ,
Enforcement Actions ,
Insider Trading ,
Material Nonpublic Information ,
Misappropriation ,
Rule 10b-5 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Fraud ,
Settlement ,
Stock Options ,
Target Company
The SEC on Feb. 29, 2024, announced settled charges against Lordstown Motors Corp. (Lordstown) for allegedly misleading investors about sales prospects for the Endurance, Lordstown's flagship pickup truck for the electric...more
3/13/2024
/ Auditor Independence ,
Audits ,
Cease and Desist Orders ,
Commercial Bankruptcy ,
Disgorgement ,
Enforcement Actions ,
False Statements ,
PCAOB ,
Publicly-Traded Companies ,
Regulation S-X ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations ,
Settlement ,
Special Purpose Acquisition Companies (SPACs) ,
Startups
Last week, the U.S. Court of Appeals for the Fifth Circuit upheld Nasdaq's board diversity rule, which the SEC first approved in August 2021 and was then challenged as unconstitutionally discriminatory and an improper...more
10/24/2023
/ Administrative Procedure Act ,
Anti-Discrimination Policies ,
Appellate Courts ,
Board of Directors ,
Constitutional Challenges ,
Corporate Governance ,
Diversity ,
Diversity and Inclusion Standards (D&I) ,
Free Speech ,
Nasdaq ,
Publicly-Traded Companies ,
Securities Exchange Act
As the SEC closed its fiscal year, it filed three separate enforcement actions against companies for purported violations of Rule 21F-17 under the Securities and Exchange Act of 1934, which prohibits persons from impeding...more
10/10/2023
/ Civil Monetary Penalty ,
Compliance ,
Contract Terms ,
Employment Contract ,
Enforcement Actions ,
Policies and Procedures ,
Remediation ,
Retaliation ,
Rule 21F-17 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations ,
Separation Agreement ,
Whistleblower Protection Policies ,
Whistleblowers
Specifically, the SEC wants a change to persuade the U.S. Court of Appeals for the Second Circuit – now, not later – of its view that Torres got it wrong when she determined that the company's offer and sale of its XRP token...more
8/11/2023
/ Cryptoassets ,
Digital Assets ,
Digital Platforms ,
Discovery Disputes ,
Enforcement Actions ,
Howey ,
Interlocutory Appeals ,
Investment Contract ,
Popular ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Security-Based Swaps ,
Token Sales ,
Trading Platforms ,
Unregistered Securities
Enforcement was in the air this Valentine's Day for the New York and Forth Worth Regional offices of the SEC, who on Feb. 14, 2023, announced charges against Christopher S. Kirchner – the former CEO of supply chain logistics...more
Outside of the small circle of federal securities law nerds (we proudly proclaim our membership), the phrase "disclosure controls and procedures" (DCP) rarely garners much attention. However, a recent settled order issued by...more
The U.S. Court of Appeals for the First Circuit on Jan. 3, 2023, ruled against Defendant Gregory "Emmanuel" Lemelson's request for a new trial in SEC v. Lemelson. The opinion and the underlying matter are critical reads for...more
1/17/2023
/ False Statements ,
First Amendment ,
Hedge Funds ,
Injunctions ,
Investment Advisers Act of 1940 ,
Investment Management ,
Materiality ,
Misleading Statements ,
Rule 10b-5 ,
Scienter ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Litigation ,
Short Sales
We here at SECond Opinions pride ourselves on staying current on all things SEC. But how about when in a single day, the SEC finalizes one rule and proposes four others (totaling 1,656 pages!) that could drastically change...more
12/16/2022
/ 10b5-1 Plans ,
Best Execution ,
Broker-Dealer ,
Corporate Governance ,
Disclosure Requirements ,
Insider Trading ,
Proposed Amendments ,
Publicly-Traded Companies ,
Regulation NMS ,
Rulemaking Process ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Regulation ,
Tick Size
The SEC was once again before the U.S. Court of Appeals for the Fifth Circuit on Aug. 29, 2022, this time in connection with the agency's approval of the Nasdaq Stock Market LLC's (Nasdaq) Board Diversity Rule (Rule). The...more
Section 21F, titled "Whistleblower Incentives and Protection," is a set of provisions within the Securities Exchange Act of 1934 that govern, among other things, the rights and obligations of SEC whistleblowers and the...more
The SEC continues to focus a portion of its enforcement attention on registrants' obligations with regard to anti-money laundering (AML) compliance and transaction monitoring. In this post, we provide a refresher on the...more
7/6/2022
/ Anti-Money Laundering ,
Broker-Dealer ,
BSA/AML ,
Compliance ,
Department of Justice (DOJ) ,
Enforcement Priorities ,
Financial Institutions ,
FinCEN ,
Risk Alert ,
Securities Exchange Act ,
Suspicious Activities ,
Suspicious Activity Reports (SARs)
The sun is shining, children are out of school, families are headed off on summer vacations, and the SEC is … bringing enforcement actions against companies for 2020 fraud related to COVID-19 products. One such action was...more
6/8/2022
/ Class Action ,
Coronavirus/COVID-19 ,
Enforcement Actions ,
Fraud ,
Medical Supplies ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations ,
Settlement Agreements ,
Settlement Negotiations ,
Stock Prices ,
Trading Suspension
Continuing its focus on crypto enforcement, the SEC on May 3, 2022, announced the addition of 20 positions to its relaunched Crypto Assets and Cyber Unit – formerly the Cyber Unit. The additions nearly double the size of the...more
5/3/2022
/ Administrative Agencies ,
Crypto Exchanges ,
Cryptoassets ,
Cybersecurity ,
Decentralized Finance (DeFi) ,
Enforcement ,
Enforcement Priorities ,
Non-Fungible Tokens (NFTs) ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Violations
The SEC's Division of Enforcement continues to focus on registrants' compliance with Form CRS, a byproduct of the agency's rulemakings "designed to enhance the quality and transparency of retail investors' relationships with...more
2/25/2022
/ Broker-Dealer ,
Conflicts of Interest ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Form CRS ,
Investment Advisers Act of 1940 ,
Retailers ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Exchange Act of 1934 ,
Transparency
The U.S. District Court for the Northern District of California in SEC v. Panuwat, a case we discussed in a previous blog as having significant repercussions for insider trading enforcement in fiscal year (FY) 2022, just...more
Last month, Holland & Knight published an alert that broke down the SEC Division of Enforcement (Division) Annual Report for the fiscal year (FY) 2021...more