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Bob's Upticks
Timely news and comments on securities and corporate governance developments.
The third horseman leaves the paddock
The SEC scheduled an open meeting for April 29 to consider proposing rules for pay-for-performance disclosure, the third area of executive disclosure acted upon by the SEC pursuant to the Dodd-Frank Act.
A high mark (would you believe an A+?) for the SEC
Credit is due the SEC for adopting a new, improved version of Regulation A that has become known as "Reg A+" – and key provisions include:
- Companies can now raise up to $50 million of capital every 12 months;
- Securities issued in a Reg A+ deal will not be "restricted securities," meaning investors will have immediate liquidity in the securities purchased;
- Reg A+ does not require that investors be accredited
Reg A+ should be of interest to private equity or venture capital investors in connection with their portfolio companies.
CEO pay ratios: Ineffective disclosure on steroids
A recent New York Times illustrates my view that rules requiring disclosure of CEO pay ratios provides is unnecessary, ill-advised and provides no meaningful information.
Does governance matter?
It troubles me that in governance, as in life, virtue is usually not its own reward. In fact, no one seems to care about governance unless and until performance deteriorates.
I was reminded of this the other day when reading a story about an investigation by New York Attorney General Schneiderman of governance practices at Cooper Union, a venerated educational institution in New York that began charging tuition last year because of poor financial condition.
Be careful what you wish for
An appellate decision appears to be wreaking havoc with insider tradition prosecutions past and present, leaving us in a period of uncertainty regarding whether and to what extent insider trading can be prosecuted.
Since the terms "inside information" and "insider trading" have never been defined, one suggestion is that Congress should enact legislation that would define one or both terms
There are also suggestions that Congress may consider a broader approach – i.e., making it illegal to trade when in possession of confidential information regardless of how it's obtained.
