Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) as a direct response to the 2008 Financial Crisis when millions of Americans lost homes due to foreclosure. (SEC). Among myriad findings, a final report on the 2008 Financial Crisis stated that investment transactions with conflicts of interest contributed to the crisis. (Financial Crisis Inquiry Commission). For example, the commission found that financial firms marketed an investment and profited off that investment product’s decline…
Read MoreAfter spending seven years as a proposal in limbo, the Securities and Exchange Commission ("SEC") adopted a "Pay Versus Performance" rule in August of 2022, finally meeting the statutory mandate set forth in the Dodd-Frank Act. (Candance Quinn, et. al., Bloomberg Law). As the rule’s name implies, SEC registrants must now disclose the interplay between their executive compensation actually paid and the company's financial performance. (PricewaterhouseCoopers). An additional requirement under the new rule has drawn scrutiny as it opens the door for Environmental Social Governance ("ESG") disclosures to be made…
Read MoreIn February 2016, Congress passed the bipartisan SEC Small Business Advocate Act of 2016 (the “Act”). The Act amended the Securities Exchange Act of 1934 to establish an independent Office of the Advocate for Small Business Capital Formation (the “Office”) within the Securities and Exchange Commission (“SEC”). (H.R. 3784). Officially established in 2019, the Office aims to assist and advance the interests of small businesses and their investors in securing access to capital and complying with SEC regulations…
Read MoreOn January 17th, the U.S. Department of Justice (“DOJ”) announced significant revisions to its Corporate Enforcement Policy, adding more incentives to companies that self-report corporate criminal misconduct. (Theodore Chung, JDSupra). The change marks the third major update to the policy since October 2021 as the Biden Administration tries to find the right balance between the hardline approach to white collar crime taken under the Obama Administration and the lax approach taken by the Trump Administration…
Read MoreOn March 21, 2022, the Securities and Exchange Commission (“SEC”) issued a rule proposal addressing Environmental, Social, and Governance (“ESG”) disclosure regulation, a concern of many investors. (SEC Press Release). The rule proposal targets disclosure of environmental issues by public companies in their required financial statements. Id. Republicans and many industry groups strongly opposed the rule, arguing that the rule would cause an unwarranted spike in compliance costs…
Read MoreThere is a long history of celebrities promoting various products and investments that did not turn out well for the individuals who acted on their advice. (Joe Mont, TheStreet). 50 Cent using Twitter to “pump” up the share price of a business he partially owned is one notable example. (Id.; Mike Masnick, TechDirt). FTX, a large crypto exchange which many celebrities publicly endorsed, collapsed in November 2022 in no small part due to fraud by its CEO, Sam Bankman-Fried. (Tietrich Knauth & Tom Hals, Reuters; Nathan Reiff, Investopedia). This public endorsement by various celebrities appears to be another example of celebrities scamming their fans...
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