Results for: conflict minerals
SCOTUS hears oral argument in Somers v. Digital Realty Trust: Dodd-Frank whistleblower statute “says what it says”
Yesterday, in addition to hearing oral argument regarding state court jurisdiction over ’33 Act class actions (see this PubCo post), SCOTUS also heard oral argument in a second case, Somers v. Digital Realty Trust. This case addressed the split in the circuits regarding the application of the Dodd-Frank whistleblower anti-retaliation protections: do the protections apply regardless of whether the whistleblower blows the whistle all the way to the SEC or just reports internally to the company? Here is a link to the transcript of the oral argument for Digital Realty, which is discussed below.
CAMs are here! SEC approves new PCAOB standard to enhance auditor’s reports
Yesterday, the SEC approved the PCAOB’s proposed rules requiring changes to the auditor’s report, AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, along with related amendments to other auditing standards. The new auditing standard for the auditor’s report, while retaining the usual pass/fail opinion, will require auditors to include a discussion of “critical audit matters,” that is, “matters communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements; and (2) involved especially challenging, subjective, or complex auditor judgment.” The new CAM disclosure requirement will apply (with some exceptions) to audits conducted under PCAOB standards, including audits of smaller reporting companies and non-accelerated filers (although at a later phase-in date). The SEC also determined that the new standard, other than the provisions related to CAMs, will apply to emerging growth companies. As Commissioner Kara Stein observed in her statement, the new “standard marks the first significant change to the auditor’s report in more than 70 years.”
Treasury report recommends actions to increase access to capital
The Treasury Department recently issued a new report, A Financial System That Creates Economic Opportunities—Capital Markets, that, in its recommendations, not surprisingly, echoed in many respects the House’s Financial CHOICE Act of 2017. Having passed the House, the CHOICE Act has since foundered in the Senate (see this PubCo post). The recommendations in the Treasury report addressed approaches to improving the attractiveness of primarily the public markets, focusing in particular on ways to increase the number of public companies by limiting the regulatory burden. According to this Bloomberg article, SEC Chair Jay Clayton “called the report ‘a valuable framework for discussion’ among market participants ‘that will most certainly benefit the American people….We appreciate Treasury’s willingness to seek the SEC’s input during the drafting process, and we look forward to working alongside other financial regulators and Congress as we pursue our three part mission to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation.’”
Will the House now try to undo SOX?
What’s next for the House after taking on Dodd-Frank in the Financial CHOICE Act? Apparently, it’s time to revisit SOX. The Subcommittee on Capital Markets, Securities, and Investment of the House Financial Services Committee held a hearing earlier this week entitled “The Cost of Being a Public Company in Light of Sarbanes-Oxley and the Federalization of Corporate Governance.” During the hearing, all subcommittee members continued bemoaning the decline in IPOs and in public companies, with the majority of the subcommittee attributing the decline largely to regulatory overload. A number of the witnesses trained their sights on, among other things, the internal control auditor attestation requirement of SOX 404(b). Is auditor attestation, for all but the very largest companies, about to hit the dust?
SCOTUS grants cert in case involving whistleblower statute and case involving state court jurisdiction over ’33 Act cases
SCOTUS will be hearing at least two cases of interest next term: one case, Somers v. Digital Realty Trust, will address the split in the circuits regarding whether the Dodd-Frank whistleblower anti-retaliation provisions apply regardless of whether the whistleblower blows the whistle all the way to the SEC or just internally at the company. The second case, Cyan Inc. v. Beaver County Employees Retirement Fund, will address whether state courts have jurisdiction over cases brought solely under the Securities Act of 1933 Act.
House passes Financial Choice Act of 2017. What now?
by Cydney Posner The Financial Choice Act of 2017 has been passed by the House (almost surreptitiously, given the unwavering focus on the Senate hearing today). According to the WSJ, the House vote was 233 to 186. The bill, sponsored by Jeb Hensarling, Chair of the House Financial Services Committee, […]
Investigate Piwowar?
by Cydney Posner Not everyone is pleased by the actions taken by Acting SEC Chair Michael Piwowar directing the SEC staff to review the conflict minerals and pay-ratio disclosure rules. In fact, today, four Senate Democrats on the Senate Banking Committee have called for an investigation into whether he has […]
Just as the U.S. seeks to roll back regulations, the European Parliament adopts new corporate governance rules
by Cydney Posner Just when the U.S. is looking at how to roll back its regulations on corporations (among others) (see, e.g., this PubCo post, this PubCo post and this PubCo post), the rest of the world seems to be headed in the opposite direction. On Tuesday, the EU Parliament approved a […]
Proposed changes in the Financial CHOICE Act 2.0
by Cydney Posner A just-released memo (subscription required) from Jeb Hensarling, Chair of the House Financial Services Committee, to the Committee’s Leadership Team outlines the proposed changes from the original Financial CHOICE Act, introduced last year (see this PubCo post), to be included in the Financial CHOICE Act 2.0. Of […]
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