SEC Soliciting Public Comment on Eliminating Reconciliation Requirement for IFRS Financial Statements

Press release: "The Securities and Exchange Commission has published for public comment a proposal to eliminate the current requirement that foreign private issuers filing their financial statements using International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB) also file a reconciliation of those financial statements to U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Commission voted unanimously on June 20, 2007, to issue the proposal for public comment."

Proposing Release

Staff Observations Report

Staff Review Correspondence

Testimony on Foreign Holdings of U.S. Government Securities and the U.S. Current Account

Congressional Budget Office Testimony on Foreign Holdings of U.S. Government Securities and the U.S. Current Account, June 26, 2007, Committee on the Budget, House of Representatives.

WSJ Posts CEO Compensation Scorecard

WSJ free article - CEO Compensation Scorecard: "...starting with this year's proxies, the SEC has changed how companies report pay. For companies whose fiscal year ended after Dec. 15, 2006, the SEC now mandates a table that includes salary, bonus, the accounting cost of stock and stock-option awards, incentive-plan payments, change in pension value and deferred-compensation earnings, and all other compensation -- typically perquisites. It also includes, for the first time, a "total compensation" column, which attempts to make pay across companies more comparable."

For in-depth looks at CEO compensation, see the CEO pay posts in WSJ.com's Marketbeat and Health Blog.

Stanford Class Actions Clearinghouse Year in Review 2006

"The Securities Class Action Clearinghouse provides detailed information relating to the prosecution, defense, and settlement of federal class action securities fraud litigation. The Clearinghouse maintains an Index of Filings of 2461 issuers that have been named in federal class action securities fraud lawsuits since passage of the Private Securities Litigation Reform Act of 1995. The Clearinghouse also contains copies of more than 18,800 complaints, briefs, filings, and other litigation-related materials filed in these cases."

2006 Filings: A Year in Review - "Securities Fraud Class Actions Tumbled to an All-Time Low in 2006. Strong Federal Enforcement Activity and Stable Stock Market Contribute to Decline. View the Press Release or download the Full Report."

New on LLRX.com

The following articles are available in the December 2006 issue of LLRX.com:

Bloggers Beware: Debunking Nine Copyright Myths of the Online World - Updated, by Kathy Biehl

Criminal Justice Resources - Criminal Justice Blogs, by Ken Strutin

A Compilation of State Lawyer Licensing Databases, by Trevor Rosen and Andrew Zimmerman

Deep Web Research Research 2007, by Marcus P. Zillman

Librarianship - Promoting Public Service and Philanthropy, by Kara Phillips

CongressLine by GalleryWatch.com: Voting in Congress, by Paul Jenks

E-Discovery Update - by Fios Inc.: Choosing An E-Discovery Vendor, by Conrad J. Jacoby

Reference from Coast to Coast: An Overview of Selected SEC Resources on the Web, by Jan Bissett and Margi Heinen

Faulkner's Practical Web Strategies for Attorneys: Planning Your 2007 Web Strategy, by Frederick L. Faulkner IV

The Government Domain: 2007 Calendars and Schedules, by Peggy Garvin

After Hours: But Wait! There's More, by Kathy Biehl

FOIA Facts: Rapid Response Team for FOIA, by Scott A. Hodes

The Tao of Law Librarianship: Reaching Across the Generations in the Profession, by Connie Crosby

Commentary: The Military Commissions Act and The Habeas Corpus Act, by Beth Wellington

SEC Enhances Online Search Capabilities for Investors

Press release: "Securities and Exchange Commission Chairman Christopher Cox today announced that investors are now able to search the contents of the disclosure documents filed electronically with the SEC using a new full-text search tool on the Commission's website. The newly searchable information includes registration statements, annual and quarterly reports, and other filings by companies and mutual funds filed during the past four years on the Commission's EDGAR database."

CEO Seeks SEC Approval to Satisfy Fair Disclosure Requirement Using Websites and Blogs

Excerpt of letter sent by Sun Microystems, Inc. CEO Jonathan Schwartz to SEC Chairman Christopher Cox, on October 2, 2006:

"As adopted, Regulation Fair Disclosure's requirement of widespread dissemination can be met through the filing of a Form 8-K or "through another method (or combination of methods) of disclosure that is reasonably designed to provide broad, non-exclusionary distribution of the information to the public." (17 C.F.R Sec. 243.101(e)(2)) To date, the SEC has not taken the position that the Regulation's "widespread dissemination" requirement can be satisfied through disclosure through the web-postings alone. While that may have been a pragmatic approach in 2000, we believe that the proliferation of the Internet supports a new policy that online communications fully satisfy Regulation FD's broad distribution requirement."

[The full text of this letter was posted on Jonathan Schwartz's blog, along with a preface in support of disseminating financial disclosure data via a company's website or blog.]

SEC to Rebuild Public Disclosure System to Make It 'Interactive'

SEC press release: "Sept. 25, 2006 — U.S. Securities and Exchange Commission Chairman Christopher Cox announced today that the SEC has awarded three separate contracts totaling $54 million to transform the agency’s 1980s-vintage public company disclosure system from a form-based electronic filing cabinet to a dynamic real-time search tool with interactive capabilities."

SEC v. Martha Stewart and Peter Bacanovi

Litigation Release No. 19794 / August 7, 2006, SEC v. Martha Stewart and Peter Bacanovi, 03 Civ. 4070 (RJH) (S.D.N.Y.) Martha Stewart and Peter Bacanovic Agree to Settle SEC Insider Trading Charges

"The Securities and Exchange Commission today announced that it has reached an agreement to settle insider trading charges against Martha Stewart and Peter Bacanovic relating to Stewart's sale of ImClone Systems stock in December 2001. Under the settlement, Stewart and Bacanovic agree to pay disgorgement and penalties. Stewart also agrees to a five year bar from serving as a director of a public company and a five year limitation on the scope of her service as an officer or employee of a public company. In August 2004, the Commission barred Bacanovic from associating with a broker, dealer or investment adviser."

Proposed Study to Compare Roles of Investment Advisers, Broker-Dealers

SEC press release, August 1, 2006: "The U.S. Securities and Exchange Commission...issued a request for contract proposals to conduct the first stage of a major study comparing how the different regulatory systems that apply to broker-dealers and investment advisers affect investors. The full text of the RFP."

Senate Finance Chair Questions Nonprofit Investment Group's Practices, Seeks IRS, SEC Comment

Press release: Grassley Questions Nonprofit Investment Group’s Practices, Seeks IRS, SEC Comment [6 pages, PDF, includes text of letter from Grassley to National Association of Investors Corp. President as well as letter to etter to SEC Chairman Christopher Cox]

SEC Proposed Rule on Executive Compensation and Related Party Disclosure

SEC Proposed Rule on Executive Compensation and Related Party Disclosure, January 28, 2006 (370 pages, PDF)

Related reference, New York Times, January 29, 2006: The Case for Cutting the Chief's Paycheck: "Corporate America has made some progress in cleaning up its governance, but overly high compensation levels for chief executives show that much remains to be done, says Nell Minow, editor, founder and chairman of the Corporate Library, a research group based in Portland, Me."

SEC Issues Statement Concerning Financial Penalties

Commission Announcement, January 4, 2005: "Today the Commission announced the filing of two settled actions against corporate issuers, SEC v. McAfee, Inc. (filing, 42 pages, PDF) and In the Matter of Applix, Inc. In one, the company will pay a civil money penalty; in the other, a penalty is not part of the settlement. The question of whether, and if so to what extent, to impose civil penalties against a corporation raises significant questions for our mission of investor protection...We proceed from the fundamental principle that corporate penalties are an essential part of an aggressive and comprehensive program to enforce the federal securities laws, and that the availability of a corporate penalty, as one of a range of remedies, contributes to the Commission's ability to achieve an appropriate level of deterrence through its decision in a particular case."

Related references:

Litigation Release No. 19520 / January 4, 2006, Accounting and Auditing Enforcement Release No. 2360 / January 4, 2006, Securities and Exchange Commission v. McAfee, Inc., Civil Action No. 06-009 (PJH) (N.D. Cal.) (January 4, 2006)

Administrative Proceeding Release No. 33-8651, In the Matter of Aplix, Inc.

Stanford Releases 2005 Report on Securities Law Fraud

The Stanford Law School Securities Class Action Clearinghouse issued a press release yesterday on the number of securites fraud class actions filed in 2005. The study identifies a decline in the number of suits and investor losses in 2005, compared to previous years. The full report, Securities Class Action Case Filings, 2005: A Year in Review, is 19 pages, PDF.

SEC Issues New Sarbanes Oxley Compliance Guidelines

Division of Corporation Finance, Office of the Chief Accountant, U.S. Securities and Exchange Commission, May 16, 2005 - Staff Statement on Management's Report on Internal Control Over Financial Reporting:

"The staff is providing this guidance to...addresses the following areas: The purpose of internal control over financial reporting; Reasonable assurance, risk-based approach, and scope of testing and assessment; Evaluating internal control deficiencies; Disclosures about material weaknesses; Information technology issues; Communications with auditors; and Issues related to small business and foreign private issuers."

New on the SEC Website

The SEC launched a new webpage which aggregates all the new content from throughout the site daily. This includes links to News & Public Statements, Litigation, Regulatory Actions, Self-Regulatory Organization Rulemaking and National Market System Plans, and SEC Divisions documents. [thanks d.c.]

NASD Guidelines for Instant Messages

According to this National Association of Securities Dealer's June 18 press release:

"NASD today advised member firms about the use of "instant messaging" by employees, saying firms must ensure the instant messaging is being retained for at least three years and the communication does not violate NASD rules governing sales literature and correspondence."

"The Notice to Members details the applicable NASD and SEC rules and guidelines to assist registered representatives and firms in their use and supervision of electronic communications with the public."

New SEC Rule Puts More Corporate Filings Online Faster

Electronic filing of all Section 16 reports will become mandatory on June 30, 2003. See Release No. 33-8230 which states:

We are adopting rule and form amendments to mandate the electronic filing, and website posting by issuers with corporate websites, of beneficial ownership reports filed by officers, directors and principal security holders under Section 16(a) of the Securities Exchange Act of 1934, generally as required by Section 403 of the Sarbanes-Oxley Act of 2002.

Section 16 Electronic Reporting Frequently Asked Questions

CEO Dumping Stock? Check Online

SEC and Website Disclosure Rules

According to this law.com article, "in the wake of the adoption of the Sarbanes-Oxley Act and last year's corporate scandals (such as Enron), more real- and quasi-real-time information about public companies will be available at the SEC's Web site or directly through the Web sites of companies themselves than could have been imagined last spring."

SEC Files Charges Against Web Spammer

This Securities and Exchange Commission press release states that the agency filed suit in the U.S. District Court for the Eastern District of New York against Samuel Aaron Meltzer ("Meltzer"), referred to as a "professional Internet spammer," for committing securities fraud via the Web (SEC v. Meltzer, E.D. N.Y., Action No. CV 03 770, Judge Denis R. Hurley, 2/18/03). Meltzer is alleged to have used spam and more than two dozen websites to promote penny stocks about which he made "made false and misleading representations." The complaint is here. The current docket in this case is available here.

SEC Adopts Attorney Conduct Rule Under Sarbanes-Oxley Act

On January 23, the "SEC adopted final rules to implement Section 307 of the Sarbanes-Oxley Act by setting standards of professional conduct for attorneys appearing and practicing before the Commission in any way in the representation of issuers." See the press release here. In addition, see the text of the final rule, Disclosure Required by Sections 406 and 407 of the Sarbanes-Oxley Act of 2002.

SEC E-Filing of Ownership Reports

On December 18, the SEC proposed: "the mandatory electronic filing of change of beneficial ownership reports required to be filed by officers, directors and principal security holders under Section 16(a) of the Securities Exchange Act of 1934, and Web site posting of such reports by issuers with corporate Web sites."

SEC Institutes Fines Over E-Mail Retention

This SEC press release concerns the agency's joint action (along with the NYSE and NASD) against 5 high profile broker-dealers for violations of e-mail communications retention requirements. The text of the SEC's administrative decision is here, and the companies will collectively pay $8.25 million in fines.

Sarbanes-Oxley Act Provisions

Not exactly technology related, but certainly worth noting in light of important SEC related activity overshadowed by the press coverage of the election;
SEC Proposes Rules to Implement Sarbanes-Oxley Act Provisions Concerning Standards of Professional Conduct for Attorneys.

Sarbanes-Oxley Act of 2002

Via R.R. Donnelley Financial's RealCorporateLawyer.com, you will find the text of the Sarbanes-Oxley Act of 2002 and links on the subject to general memos written by several dozen of the top law firms in the country.