Corporate & Securities Law Blog

Up-to-date Information on Corporate & Securities Law

Latest from Corporate & Securities Law Blog - Page 2

This client alert is the second of a two part series concerning the Save Our Stages Act (the “SOS Act”), which became law on December 27, 2020 as Section 324 of the Economic Aid to Hard-Hit Small Business, Nonprofits, and Venues Act (the “Economic Aid Act”, comprising Title III of Division N of the Consolidated Appropriations Act, 2021).  The SOS Act establishes a new grant program (the “SOS Program”, also known as the “grant program for shuttered venue operators”) to be administered by the Small Business Administration (“SBA”) to aid certain financially distressed venue operators, event promoters or producers, and…
Among the various bills that were amalgamated in the Consolidated Appropriations Act, 2021 (the omnibus appropriations and stimulus funding bill that was signed into law on December 27, 2020) was a modified version of the Save Our Stages Act (the “SOS Act”), a bill first introduced into the Senate by Sen. John Cornyn (TX) on July 22, 2020. The SOS Act can be found in Section 324 of the Economic Aid to Hard-Hit Small Business, Nonprofits, and Venues Act, which act comprises Title III of Division N of the Consolidated Appropriations Act, 2021.  The SOS Act establishes a new grant…
[Update: This article has been updated since its initial publication on December 31, 2020.] On December 27, 2020, President Donald Trump signed into law the Consolidated Appropriations Act, 2021 (the 2021 Consolidated Appropriations Act), an omnibus statute that is comprised of, among other laws, twelve fiscal year 2021 appropriations bills for the federal government and an economic aid package to assist business concerns that continue to face hardships due to the COIVD-19 pandemic.  Title III of the 2021 Consolidated Appropriations Act, which is cited as the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Act), among other…
Section 220 of the Delaware General Corporation Law, 8 Del. C. § 220 (“Section 220”), permits a stockholder of a Delaware corporation to inspect corporate books and records upon a showing of a proper purpose.  The Delaware courts have long urged stockholders to avail themselves of Section 220 — the “tools at hand” — to inspect relevant corporate documents before commencing plenary derivative litigation.  See, e.g., Grimes v. Donald, 673 A.2d 1207, 1216 & n.11 (Del. 1996).  Perhaps as a result of stockholders heeding this advice, recent years have seen an increase in litigation arising out of Section 220 demands, with…
On December 10, 2020, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued a Fact Sheet clarifying the circumstances under which financial institutions can share information under Section 314(b) of the USA Patriot Act (“Section 314(b)”), 31 C.F.R. § 1010.540.  In a speech on the same day, FinCEN’s director, Kenneth Blanco, urged financial institutions to take advantage of the program.…
On December 1, 2020, the Commodities Futures Trading Commission (CFTC) Division of Enforcement published its annual report for Fiscal Year 2020.  According to the report, the Division filed a record number of enforcement actions in 2020 and achieved a number of firsts, despite the unprecedented challenges presented by the COVID-19 pandemic.  In addition, the report provides a number of key insights into the Division’s enforcement concerns in several key areas, including compliance, digital assets, anti-money laundering (AML), market surveillance and its whistleblower program.    …
On November 19, 2020, Peter Driscoll, director of the Office of Compliance Inspection and Examination (“OCIE”) of the Securities and Exchange Commission (“SEC”), gave a speech urging advisory firms to empower their Chief Compliance Officers (“CCOs”).  The speech, made at the SEC’s annual compliance outreach conference, accompanied OCIE’s Risk Alert, issued the same day, identifying notable deficiencies and weaknesses regarding Registered Investment Advisors (“RIAs”) CCOs and compliance departments.  Driscoll’s speech complemented the Risk Alert by outlining the fundamental requirements for CCOs:  “empowered, senior and with authority.”…
A Securities and Exchange Commission (“SEC”) plan to create a registration exemption for certain finders has generated a mixed response.  The nearly 90 comments received by the SEC by the November 12, 2020 close of the comment period reflect a clear divide along predictable lines.  Broker-dealers, issuers, and some practitioners lauded the proposal for bringing regulatory clarity to what has long been a cloudy issue while regulatory groups and investor advocates criticized the plan for allowing unregistered finders to conduct brokerage activities without sufficient investor protection mechanisms.…
On November 2, 2020, the Securities and Exchange Commission adopted amendments intended to ease the rules for certain exempt offerings. These changes include increasing the annual cap on equity crowdfunding from $1.07 million to $5 million, raising the annual cap on Reg A+ offerings from $50% million to $75 million, raising the maximum offering amount for Rule 504 of Regulation D from $5 million to $10 million, and expanding the “test-the-waters” accommodation to Regulation Crowdfunding issuers.…
As reported in our earlier blog post The CARES ACT – Tax Relief, the federal CARES Act provides for forgiveness of indebtedness for eligible recipients of Paycheck Protection Program (“PPP”) loans in an amount equal to the sum of the recipient’s payroll costs, interest on mortgage obligations, rent obligations and utility payments (subject to certain conditions and limitations).  Under federal law, any amount of covered loans forgiven under the CARES Act is excluded from gross income for federal income tax purposes.…
The Federal Trade Commission (“FTC”) recently issued a notice of proposed rulemaking to amend the premerger notification rules (the “Rules”) that implement the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) to change the definition of “person” and create a new exemption.  The new definition of person is specifically designed to obtain more information from certain investment entities, such as investment funds and master limited partnerships, by including “associates” in the definition.…
On October 2, 2020, the U.S. Small Business Administration (SBA) released a Procedural Notice providing guidance addressed to Paycheck Protection Program (PPP) lenders and SBA employees as to the circumstances under which prior SBA approval is required before a borrower of a PPP loan undergoes a change of ownership.[1]  In particular, the October 2, 2020 Procedural Notice includes instructions to PPP lenders on how they may address equity or asset M&A transactions, ownership restructurings, or transfers of ownership interests involving their PPP borrowers.  Importantly, the October 2, 2020 Procedural Notice does not clearly address the circumstance of a…
On September 17, 2020, Stephanie Avakian, Director of the SEC’s Division of Enforcement, spoke at the Institute for Law and Economics, University of Pennsylvania Carey Law School Virtual Program.  Ms. Avakian used her time to highlight the Division’s enforcement priorities, operations, and challenges in the years since Jay Clayton became the director of the SEC in May 2017.…
On September 10, 2020, the Commodities Futures Trading Commission (CFTC) issued the latest in a series of circulars regarding corporate compliance released this summer by government agencies. In June, the Criminal Division of the Department of Justice (DOJ) issued updated guidance regarding its evaluation of corporate compliance programs (see our prior blog here). In July, DOJ and the Securities and Exchange Commission (SEC) jointly issued an updated Resource Guide to the U.S. Foreign Corrupt Practices Act, which includes a 12-part section covering the “hallmarks” of effective corporate compliance programs. The instant CFTC guidance is the first issued by…
In In re WeWork Litigation, 2020 Del. Ch. LEXIS 270 (Del. Ch. Aug. 21, 2020) (Bouchard, C.), the Delaware Court of Chancery considered an issue of first impression:  Does the management of a Delaware corporation have the unilateral authority to preclude a director from obtaining the corporation’s privileged information?  The Court held it cannot.  The directors of Delaware corporations are entitled to share in legal advice the corporation receives and, subject to limited exceptions not at issue in WeWork, cannot be prevented from accessing the corporation’s privileged information.…