On February 7, 2023, the Division of Examinations of the US Securities and Exchange Commission (the “Division” and the “SEC,” respectively) announced its examination priorities for 2023. This year, the Division identified new and significant focus areas including: (i) recently adopted rules under the Investment Advisers Act of 1940 and Investment Company Act of 1940
Securities Enforcement
SEC Announces Enforcement Results for FY22
On November 15, 2022, the Securities and Exchange Commission announced its enforcement results for fiscal year 2022. Fiscal year 2022 was a significant year for the SEC as it levied over $6.4 billion in penalties and disgorgement – an SEC record. These fines and penalties came from 760 enforcement actions filed during the fiscal year…
SEC’s ESG Task Force Brings 1st Case Against Brazilian Mining Co., Alleging Material Misstatements About Dam Safety
Underscoring the U.S. Securities and Exchange Commission’s (SEC) attention to environmental, social, and governance (ESG) disclosures, the SEC has charged Vale S.A., a publicly traded Brazilian mining company, with making false and misleading claims about the safety of its dams prior to the January 2019 collapse of its Brumadinho dam. This Legal Update highlights allegations…
US SEC’s Climate Risk Disclosure Proposal Likely to Face Legal Challenges
On March 21, 2022, the US Securities and Exchange Commission (SEC) voted 3:1 to propose new rules that, if adopted, would require public companies to, among other things, provide audited financial statements containing climate-related financial impact and expenditure metrics, report their greenhouse gas emissions, and disclose details of how climate change is affecting their businesses.…
The SPAC Series: Litigation and Enforcement Developments
March 4, 2022 Webinar
12:00pm – 1:00pm EST
Register here.
There have been a number of litigation and enforcement developments targeting the SPAC market. These include private litigation claims brought following de-SPAC transactions in Delaware Chancery Court alleging breaches of fiduciary duty, federal securities claims relating to proxy/prospectus disclosures, and federal securities fraud claims…
Electric Vehicle Company Settles SEC Case
In another special purpose acquisition company (“SPAC”) related enforcement action, on December 21, 2021, the US Securities and Exchange Commission (“SEC”) issued an order instituting cease-and-desist proceedings (“Order”) against a Nasdaq-listed electric vehicle truck manufacturing company that went public through a combination with a SPAC (“Company”). The Company’s initial business combination was consummated in June…
The SEC Pursues Action Against SPAC and Insiders for Misleading Investors
On July 13, 2021, the US Securities and Exchange Commission (“SEC”) announced charges against a special purpose acquisition company (“SPAC”), the proposed merger target company in the space transportation industry, each company’s CEO, and the SPAC’s sponsor. The charges were announced in connection with misleading statements made by the SPAC and target company to its…
Ninth Circuit Affirms Dismissal in Stock-Drop Lawsuit, Citing Shareholder’s “Implausible” Scienter Theory
On June 10, 2020, the US Court of Appeals for the Ninth Circuit affirmed the dismissal of a putative securities fraud class action against Endologix, Inc., a medical device company, on the grounds that the shareholder’s core theory of liability had “no basis in logic or common experience.” In that case, Nguyen v. Endologix, Inc.,…
Supreme Court Decision Alert – Supreme Court Allows SEC to Seek Disgorgement of Profits for Victims of Securities Fraud in Civil Actions
Liu v. SEC, No. 18-1501
Introduction: Today, the Supreme Court held in an 8-1 decision that the SEC, in civil actions, can seek disgorgement of a defendant’s net profits from securities fraud.
Background: Through an investment fund, Charles Liu and Xin Wang raised $27 million to build a cancer treatment center in California, but…
Another Perqs Related Order from the SEC
The Securities and Exchange Commission announced the entry of an order settling charges against a registrant relating to the failure to disclose fully perquisites and benefits provided to the former chief executive officer. In proxy statements from 2014 through 2018, the SEC found that the registrant failed to disclose benefits, including personal use of corporate…