Tag: Schedule 13D
SEC charges Icahn and publicly traded partnership with failure to disclose pledged securities
Here’s a reminder for all of us about the need to disclose securities pledged as collateral for margin loans—a reminder that comes at the expense of Carl Icahn and his affiliated master limited partnership, Icahn Enterprises L.P. In these Orders, the SEC disclosed settled charges against Icahn and IEP for failure to “disclose information relating to Icahn’s pledges of IEP securities as collateral to secure personal margin loans worth billions of dollars under agreements with various lenders.” According to the Chief of SEC Enforcement’s Complex Financial Instruments Unit, the “federal securities laws imposed independent disclosure obligations on both Icahn and IEP. These disclosures would have revealed that Icahn pledged over half of IEP’s outstanding shares at any given time….Due to both disclosure failures, existing and prospective investors were deprived of required information.” To settle the charges against them, Icahn and IEP agreed to pay civil penalties of $500,000 and $1.5 million. According to this article in Axios, the loans cost Icahn a lot more than $2 million. See also, these articles from AP, Reuters and CNBC.
Gensler’s fireside chat
In a virtual “fireside chat”—is that an oxymoron?—hosted by NYU law, SEC Chair Gary Gensler was interviewed by former SEC Commissioner and current NYU professor Robert Jackson. Much of the discussion involved topics that Gensler has already addressed in the past, such as gamification and digital engagement practices (see e.g., this PubCo post and this PubCo post). Gensler was also quite reluctant to “get ahead of the rest of the SEC” on some issues and purposefully avoided discussion of actions by specific companies, such as Glass-Lewis’s recent announcement that it would offer equity plan advisory services—will that present a conflict?—and BlackRock’s recent decision to pass-through certain voting rights to institutional clients (see this PubCo post). However, he did offer some updates on various projects at the SEC.
SEC-NYU Dialogue on Securities Markets focuses on shareholder engagement
While the topic of last week’s fourth SEC-NYU Dialogue on Securities Markets was shareholder engagement—focusing on the roles of institutional and activist investors— the real hot topic was the recent letter to CEOs from BlackRock’s Laurence Fink, which was at least mentioned on every panel. (See this PubCo post.)
SEC nominees off “hold” and awaiting Senate confirmation
As has been widely reported, there are currently two nominees to fill the two empty slots at the SEC—from the Democratic side, Robert Jackson, a professor at Columbia Law School, and from the Republican side, Hester Peirce, a fellow at George Mason University. However, Senator Tammy Baldwin had put a “hold” on the nominees back in November, as reported in the WSJ, until they provided “their views on whether regulators should rein in activist investors, stock buybacks and executive pay.” Now that they have both responded to her questions, Baldwin has lifted her hold on the nominees, according to Law360, “clearing a hurdle for confirmation.” Their responses, although not exactly surprising, provide some insight into their views on these key issues.
That was quick — proxy access test drive hits a wall
by Cydney Posner You probably recall that, on November 9, 2016, GAMCO Asset Management Inc. (entity affiliated with activist investor Mario Gabelli) and certain affiliates used the proxy access bylaws recently adopted at National Fuel Gas Company, an NYSE-listed diversified natural gas company, to nominate a candidate for election to the […]
Senate bill introduced to reform 13D reporting by closing “loophole” exploited by activist hedge funds
by Cydney Posner Soon after the Wausau Paper Company was targeted by a hedge fund activist in 2011, Wausau’s paper mill in Brokaw, Wisconsin was shuttered by the embattled company. The mill had been established at the end of the 19th century and, since its founding, had provided employment for […]
WSJ reports SEC Enforcement looking at failures to disclose alliances among hedge fund activists
by Cydney Posner The WSJ reports that the SEC is investigating whether some hedge fund activists formed 13D “groups” but failed to make appropriate disclosure of their alliances. Under Rule 13d-5, when two or more persons agree to act together for the purpose of acquiring, holding, voting or disposing of […]
Will Congress shorten the 10-day window applicable to filing Schedule 13D?
by Cydney Posner Several public watchdog organizations have sent a letter to the leaders of two congressional committees urging that Congress take action to shorten the 10-day filing period applicable to Schedule 13D. The long window applicable to Schedule 13D, which was originally adopted to promote transparency, is now, they […]
SEC Enforcement tries to fix more “broken windows”
by Cydney Posner On Friday, the SEC charged eight officers, directors and major shareholders for failing to update their Schedule 13D stock ownership reports to reflect material changes in connection with several going-private transactions. According to the press release, each person or entity charged “took steps to advance undisclosed plans […]
SEC sends a message — to executives and their companies
by Cydney Posner In October 2013, SEC Chair Mary Jo White gave a speech at the Securities Enforcement Forum in which she declared an “enforcement mission” of the SEC to be implementation of the “broken windows” theory of crime deterrence made famous decades ago in NYC: “The [‘broken windows’] theory is […]
You must be logged in to post a comment.