Despite losing three Commissioners in the last year, the SEC already has managed to accomplish many of its goals for 2008. In a time of depleted resources, the short-staffed Commission continues to march onwards to meeting its own aggressive agenda towards stabilizing damage done from issues stemming from the recent collapse of the subprime mortgage industry and resulting credit crunch. While global clamor for international regulatory and rulemaking cooperation remains a priority for the SEC Staff, the regulator must reassess its policies and standards for its role in overseeing the markets. As politicians call for game-changing financial industry regulation reform, the Commission clearly has its work cut out for them.

According to SEC Currents: "With the U.S. Presidential election around the corner, however, many top Commission Staff members are likely to abandon ship for private practice. This will prompt a changing of the guard with many facets of SEC rulemaking and overall Commission business strategy."

  • SEC Release - Modernize Oil & Gas Reporting
  • SEC Litigation Release - Broadcom – Backdating
  • SEC Statement - Rules For Credit Rating Agencies
  • Climate Risk Disclosure - Public Petition
  • SEC Release - Reforms To Credit Rating Process
  • Sub-Prime - SEC News & Public Statements
  • SEC Regulatory Releases - "Say On Pay"
  • Adoption of New Policy – Back-Dating
  • APB 25 – Inadvertent Backdating of Options
  • Back-Dating - "Clawback" of Profits
  • Comfort Statement – Back-Dating
  • 10-Q - Risk Factors – Sub-Prime Mortgage Industry
  • M&A Transactions – Sub-Prime Mortgage Exposure
  • Sub-Prime Mortgage – Risk – Prospectus
  • Sub-Prime Mortgage - SEC Staff Reviews
  • UBS AG - Write Down Disclosure

Mid-Year Review: SEC Exudes Confidence Despite Incredible Challenges
At its midpoint, 2008 has been an ambitious year for the Securities and Exchange Commission. In a time of depleted resources, the short-staffed Commission continues to march onwards to meeting its own aggressive agenda towards stabilizing damage done from issues stemming from the recent collapse of the subprime mortgage industry and resulting credit crunch. While global clamor for international regulatory and rulemaking cooperation remains a priority for the SEC Staff, the regulator must reassess its policies and standards for its role in overseeing the markets. As politicians call for game-changing financial industry regulation reform, the Commission clearly has its work cut out for them. Read more >

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While public company shareholders have been more successful in securing votes on trendy corporate governance measures, such as splitting the Chairman and CEO posts and say-on-pay, recent failures to pass these proposals suggest that shareholders will not be motivated to reform corporate governance practices if the company has a history of strong profits. Seemingly, the trend suggests that corporate boardrooms should feel at ease come proxy season if their company is wildly profitable. Results of future shareholder votes should shed light as to whether this, in fact, is a growing trend combating shareholder activism.

According to SEC Currents, "Despite recent publicity of excessive executive compensation and the say-on-pay initiative, it seems that shareholders are still swayed more by profitability than ethical responsibility." In this light, practitioners should prepare their issuer clients to best handle shareholder proposals to better mitigate potential crisis.

Listed below are two in-depth examinations from SEC Currents regarding these pivotal shareholder proposals. In addition, GSI has compiled a list of related search statements addressing shareholder proposals and the nomination of directors in the proxy solicitation process.

  • SEC Regulatory Releases - "Say On Pay"
  • "Say On Pay" - Shareholder Proposal
  • Shareholder Proposal - Separation of Roles
  • Washington Mutual Chairman - Loss of Title
  • 8-K - Separation of Chairman & CEO Roles
  • Exxon Mobil Corp - Separation of Chairman/CEO Role
  • Verizon - Proxy - Separation of Roles
  • Wachovia Corp - Separation of Roles
  • Director/Officer Continuing Education - Post S-OX
  • Nomination Procedures - Proxy
  • Corporate Governance Principles - Disclosure Of
  • Corporate Governance Guidelines
  • Shareholder Proposal - Proxy
  • Shareholder Proposal - Clawback Policy
  • Opposition Statement To Shareholder Proposal
  • Issuer Sends Notice of Defects

Politicizing Executive Compensation: Say-On-Pay Initiative Gains Recognition
Recent corporate governance initiatives closely tied to the Securities and Exchange Commission's campaign to tighten controls on excessive executive pay continue to rise in shareholder popularity and disclosure documents. Despite rising shareholder activism, results remain mixed as many proposals -- even if passed -- are simply advisory, and not binding in any manner. The issue has also become a heated point of political debate as top Presidential candidates continue to solidify their positions. Recognition, irrespective of its source, marks positive momentum for corporate governance advocates when compared to recent years. Read more

Separation of Power? Profitability Trumping Governance Reform
Corporate governance pundits have long encouraged companies to divide powers between their Chief Executive Officer and Chairman -- roles typically shared by one individual in most U.S. companies. Given the recent noise generated by Exxon Mobil Corp. shareholder activists to strip the company Chairman role from the office of the Chief Executive Officer, the SEC Currents' Staff conducted a study to assess similar efforts at public companies. Read more

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As access to cheap capital continues a virtual death spiral, issuers scurry to secure the investments necessary to commence and close transactions that once were foregone conclusions. While today's "credit crunch" continues to spread across most industries and impact consumer choice, practitioners should become well versed in financing alternatives for their clients so to encourage business activity in a deflated market. Using capital raising vehicles like Special Purpose Acquisition Companies (SPACs), attracting investments from Sovereign Wealth Funds, and taking advantage of new private equity trading platforms are but a few of the latest strategic financing methods that appear to be flourishing -- getting issuers the capital they need to succeed with their business objectives.

According to SEC Currents, "The quest to find creative financing options amidst the market's current credit crunch has escalated once bullied vehicles for catalyzing investment, as blank check companies, foreign government sponsored hedge funds, and tweaked versions of private equity consortiums appear to have risen from their own ashes in titanic proportions." In this light, practitioners should use Westlaw Business in preparing their issuer-clients to consider embracing unorthodox capital raising approaches to best leverage current market conditions.

Listed below are three in-depth examinations from SEC Currents regarding alternative financing strategies. In addition, GSI has compiled a list of related search statements addressing these strategies.

  • Blank Check / Blind Pool Company
  • Dunkin Brands - Private Equity M&A Transaction
  • M&A - Private Equity Buyer / Leveraged Buy Out
  • KKR Private Equity Investors - Offering Memorandum
  • Private Placement - Hedge Fund
  • Regulation S Offerings - 144A/Private Placement
  • Private Placement By Government Entity
  • S Corporation Distribution 144A/Private Placement
  • Catastrophe Bonds - Private Placement/144A
  • Auction Based IPO

Alternative Financing: SPACs Get Respect
The quest to find creative financing options amidst the market's current credit crunch has escalated a once bullied vehicle for catalyzing investment, as blank check companies appear to have risen from their own ashes in titanic proportions. Special Purpose Acquisition Companies, or SPACs, continue to gain credit as a legitimate financing method in the face of an increasingly expensive debt market. Recent moves by the United States' primary national exchanges to list SPACs underscores the importance, and popularity, of this alternative investment strategy. Read more

Big Banks Juiced By Sovereign Wealth Funds, Regulators Concerned
Huge investments by state-run investment pools called Sovereign Wealth Funds (SWFs) in the first quarter of 2008 suggest that major U.S. lending institutions truly have been rocked by the credit crunch -- more so than could have been predicted. Foreign investment in financial institutional giants like Citigroup Inc., Merrill Lynch & Co., UBS AG, and Morgan Stanley indicate that the influx of foreign capital may be one of the keys to saving the federal system from utter devastation. The aftermath, however, remains a concern for many market participants, policy-makers, and regulators. Read more

Inside Apollo: IPO Rides Brave New Capital-Raising Strategy
On April 8, 2008, private equity behemoth Apollo Global Management, LLC filed a registration statement to sell its shares on the public market. While it has been reported that Apollo investors plan to sell upwards of $475 million worth of stock in the initial public offering on the New York Stock Exchange, the IPO has less to do with raising capital as it does with meeting outstanding compliance commitments. A recent SEC Currents' study reveals that amidst the excitement of a private equity firm conducting an IPO, Apollo's hand had been played last summer in part of a broader strategy to raise capital and rally interests of institutional investors. Read more

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Westlaw Business now has a single convenient destination for your Canada securities work. The Securities-Canada Center on Westlaw Business offers SEDAR and related compliance research and document retrieval in a platform optimized for securities practice.

The Securities-Canada Center provides a place where filings, law, and guidance all come together, with just what you need to draft documents and key agreements, identify precedent language, and monitor peers, clients and competitors.

To learn more about the new Securities-Canada Center, visit westlawbusiness.com or contact your Westlaw Business team at 800.669.1154.

GSI, a division of West, is located at 1100 Thirteenth St. NW, Suite 200, Washington, DC 20005, and has been in the business of providing information services to legal and financial professionals since 1988.

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Recent SEC rulemaking has made shareholder access the rallying cry of activist investors this proxy season. After weighing the issue of shareholder access to director nomination for much of last year following a controversial ruling by the Second Circuit Court of Appeals in American Federation of State, County, and Municipal Employees v. American International Group, Inc., the SEC chose to jettison a formal proxy access rule, instead choosing to clarify their existing stance on the exclusion of shareholders proposals relating to director election. The decision to once again postpone a shareholder nomination rule has evoked a strong reaction from activist investors, led by AFSCME, who seek to once again push the issue to the Court of Appeals.

According to SEC Currents, "As the escalating battle between corporate boards and shareholder activist groups over the corporate ballot, corporate counsel should remain watchful of how the controversial proxy access issue plays out this proxy season, in corporate proxy filings, at the SEC, and perhaps even in the courts." In this light, practitioners should prepare their issuer clients to best handle shareholder proposals to better mitigate potential crisis.

Listed below are two in-depth examinations from SEC Currents regarding shareholder proposals. In addition, GSI has compiled a list of related search statements addressing shareholder proposals and the nomination of directors in the proxy solicitation process.

  • SEC Proposed Rule - Shareholder Proxy Access
  • SEC Proposed Rule - Shareholder Access
  • Exclusion Of Proposal – Rule 14a-8(i)(3)
  • S&P 500 Proxy - Proposal to amend By-laws
  • SSR - Correspondences Related to Rule 14a8
  • Staff Legal Bulletin No. 14c Shareholder Proposals
  • AFSCME v. AIG - Comment on 2nd Circuit Ruling
  • No-Act - Shareholder Eligibility Requirements
  • E-Proxy Consent Language
  • Electronic Access to Proxy Material
  • SSR - Proxy Proposals
  • Opposition Statement To Shareholder Proposal
  • Revision of Proposal
  • SEC Press Releases - Codify Election Procedures

Early Proxy Season Sees Onslaught of Proxy Access Resolutions
The American Federation of State, County, and Municipal Employees (AFSCME) has once again taken the lead in driving shareholder access initiatives this proxy season. AFSCME's early shareholder submissions have already equaled the sum of all shareholder access proposals submitted in the 2007 proxy season. The increased prominence of proposals advocating shareholder access to director nomination indicates that this issue will be at the forefront of corporate governance this proxy season. This SEC Currents feature highlights proxy access proposals and the contrasting efforts of Boards of Directors to omit the proposals from the corporate proxy. Read more

Shareholder Proposals Pursue Alternate Route to Board Elections
This proxy season the American Federation of State, County and Municipal Employees (AFSCME) is spiriting a multi-pronged attack on the status quo for shareholder director nominations. AFSCME is submitting a new volley of shareholder proposals aimed squarely at recouping the costs of nominating directors outside of the corporate proxy process, in addition to submissions of traditional proxy access proposals. This newest end run on shareholder access provides another example of activists increased resolve to impart a significant change in the corporate election process. This SEC Currents analysis explores the dynamics of AFSCME's reimbursement proposal for its impact on issuer's election processes and greater corporate governance policies. Read more

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Beginning on Monday, March 17, the LIVEDGAR center on Westlaw Business will offer a powerful new feature that enables you to pull the most recent company filings directly from the landing page.

The new Latest Company Filing search box lets you use a company’s ticker symbol to pull its most recent 10-K, 10-Q or Proxy with a single click of your mouse. This exciting new feature in Westlaw Business lets you perform a very common task extremely efficiently.

For more information on how you can take advantage of this latest enhancement to Westlaw Business, simply click here to login. If you have other questions about your Westlaw Business subscription, please contact your sales and account management team or call 800.669.1154.

GSI, a division of West, is located at 1100 Thirteenth St. NW, Suite 200, Washington, DC 20005, and has been in the business of providing information services to legal and financial professionals since 1988.

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As the first round of the Securities and Exchange Commission's review of issuer proxy statements nears a close, practitioners should prepare to address a number of executive compensation disclosure issues to conform to the SEC Staff's latest issuer correspondences. A recent SEC Currents study suggests that the impact of the Commission's review will shape both the form and function of future Compensation Discussion and Analysis sections in proxy statements and annual filings. Keeping this in mind, the SEC Currents Staff advises practitioners carefully to consider the Commission's comments when assisting their clients in designing future compensation plans. Issuers would be wise to attempt overcoming these compliance challenges today to avoid falling prey to potential regulatory review next year.

Below GSI has compiled a list of search statements addressing executive compensation. To launch your search, simply click on any link of interest.

COMPENSATION – COMPENSATION DISCUSSION & ANALYSIS

  • CD&A - 10-K Item 11 Executive Compensation
  • CD&A - 8-K Item 5.02 - Changes to Plans
  • SCD&A - No-Action Letter Discussion
  • CD&A - Proxy - Elements of Compensation Discussion
  • CD&A - Proxy - Change-In-Control Payments
  • CD&A - Proxy - Performance Measures
  • CD&A - Proxy - Grants of Plan-Based Awards
  • CD&A - Proxy - Tax Reimbursement

COMPENSATION - CLAWBACK

  • Compensation Comm Report - Clawback Discussion
  • Employment Contracts - Clawback Clause
  • Golden Parachute Clawback Discussion
  • Hewlett Packard - Shareholder Proposal – Clawback
  • Microsoft Corp - Clawback Policy
  • SEC Pronouncements - Clawback Policies
  • Shareholder Proposal - Clawback Policy
  • Employment Contracts - Clawback Clause

Commission Staff Spots Lacking Disclosures as Exec. Comp. Review Nears a Close
Ranking representatives from the Securities and Exchange Commission have informed SEC Currents that the Division of Corporation Finance officially has closed 30-percent (over 100 companies) of their executive compensation disclosure reviews submitted in issuers' proxy statements. Upwards of 70-percent of the original 350 companies receiving letters now have received a second round of comments from the SEC. Sources tell SEC Currents that the Commission's primary objectives with the second round are to achieve clarity on issues addressing performance targets and competitive harm. Read more

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Westlaw Business now has a single convenient destination for your Canada securities work. The Securities-Canada Center on Westlaw Business offers SEDAR and related compliance research and document retrieval in a platform optimized for securities practice.

The Securities-Canada Center provides a place where filings, law, and guidance all come together, with just what you need to draft documents and key agreements, identify precedent language, and monitor peers, clients and competitors.

To learn more about the new Securities-Canada Center, visit westlawbusiness.com or contact your Westlaw Business team at 800.669.1154.

GSI, a division of West, is located at 1100 Thirteenth St. NW, Suite 200, Washington, DC 20005, and has been in the business of providing information services to legal and financial professionals since 1988.

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New strategic developments to Westlaw Business give you a competitive advantage when examining relevant research and legal guidance on mergers and acquisitions, offerings, securities and related business law topics.

The new Private Equity Center on Westlaw Business brings together buyout and capital markets coverage, laws and regulations from West, and renowned Aspatore guidance materials to give you a superior single source of private equity information. The Private Equity Center will help you mitigate risk by providing you with the solutions you need to operate in the alternative investment markets.

In addition, ’33 Act and Blue Sky coverage have been added to the Securities Center making it the most robust resource for filings, law, and guidance in the industry. The Securities Center on Westlaw Business provides a place where practice-specific tools all come together, with just what you need for research, drafting, and review.

The M&A Center has also been enhanced and now includes relevant caselaw as well as M&A related laws and regulations, including the Williams Act and Hart-Scott-Rodino. The M&A Center on Westlaw Business is most comprehensive source of global deal coverage designed with the tools you need to give you an edge.

For more information on how you can take advantage of the latest Westlaw Business enhancements, please contact your sales and account management team or call 800.669.1154.

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