Publications

Fairchild Morgan Law / Publications

Client Brief | Illinois-Based Public Companies Required to Disclose Board Diversity in Illinois Filings by 2021

September 16, 2019 | Late last month, Illinois enacted H.B. 3394 requiring publicly traded companies headquartered in Illinois to disclose key diversity information in Illinois state filings. Required disclosures include: racial, ethnic and gender diversity of their boards of directors; how demographic diversity is considered in their processes for identifying and appointing director nominees and executive officers; and policies and practices for promoting diversity, equity and inclusion among the board of directors and executive officers. Under the new law, effective August 27,...

Client Brief | SEC Proposes Rule Revisions to Modernize and Simplify Disclosure Requirements

August 16, 2019 | On August 8, 2019, the US Securities and Exchange Commission (SEC) proposed amendments to certain provisions of Regulation S-K to streamline and simplify disclosures related to business, legal proceedings, and risk factors. The proposed amendments, which represent the first significant updates to these disclosures in over 35 years, are intended to improve the readability for investors, eliminate repetitive and immaterial information and simplify compliance for reporting companies. The amendments are part of the ongoing Disclosure Effectiveness Initiative...

Client Brief | Nasdaq Issues Guidance on Additional, Stricter Criteria for Continued Listing

July 3, 2019 | Last month, Nasdaq issued additional guidance on its application of Rule 5101, which provides the exchange with “broad discretionary authority over the initial and continued listing of securities” to maintain an orderly trading market and public confidence in the Nasdaq market. The guidance comes after frequently asked questions on the application of Rule 5101. In issuing the guidance, Nasdaq noted that it would be impossible to list all of the factors that could cause it to exercise...

SEC Requests Comments on Overhaul of Private Securities Offering Exemptions

June 24, 2019 | Last week, the Securities and Exchange Commission published a concept release and requested public comment on ways to overhaul and streamline the myriad private offering exemptions from registration that exist under the current securities laws and regulations. The exemptions have been enacted and added onto over a period of more than 85 years, and the concept release notes that “market participants have conveyed concerns about the complexity of the exempt offering framework.” The SEC...

SEC Proposes Changes to Financial Disclosures for Acquisitions

May 15, 2019 | Earlier this month, the U.S. Securities and Exchange Commission proposed amendments to the rules governing financial statement disclosures for business acquisitions and dispositions. The proposed amendments are intended to reduce the cost and burden of preparing historical statements and pro forma financial information in connection with acquisitions or other business combinations for public companies. The proposal amends Rule 3-05 (relating to historical financial statements) and Article 11 of Regulation S-X (relating to pro forma financial information). The...

SEC Adopts Rule to Simplify Redacting Confidential Information in Exhibit Filings

March 26, 2019 | On March 20, 2019, the SEC adopted a rule that will allow companies to omit confidential information from most exhibits without filing a confidential treatment request. In this significant development, registrants may now omit confidential information from material contracts filed under Item 601(b)(10) of Regulation S-K and agreements under Item 601(b)(2) without submitting a confidential treatment request (CTR) if and when the registrant determines that such information is (i) not material and (ii) would likely cause competitive...

Self-Reporting May Help Token Issuers Avoid SEC Civil Penalties

March 19, 2019 | Last month, the SEC announced it had settled an enforcement action against Gladius Network LLC for failing to register its initial coin offering, a violation of Section 5 of the Securities Act of 1933. The settlement, which was devoid of civil penalties, underscores two key points: a) the offer and sale of distributed ledger or blockchain tokens can be considered sales of securities and, as such, must be registered unless a valid exemption from registration is...

2019 M&A Trend Alert

February 8, 2019 | Over the past several years, the M&A insurance space has changed significantly, particularly as it relates to representation and warranty (R&W) insurance. Historically, R&W insurance – in the context of M&A transactions – has been an underutilized and virtually obscure product. Today, however, more entities recognize the myriad benefits it provides for both buyers and sellers. R&W insurance may enable buyers to offer more competitive bids, while sellers oftentimes receive a higher percentage of the sale proceeds...

SEC Moves to Enforce “Equal or Greater Prominence” in Financial Disclosures Containing Non-GAAP Information

January 24, 2019 | In December 2018, the Securities and Exchange Commission (SEC) announced it had entered into a settlement with ADT Inc. after finding the company had emphasized non-GAAP financial measures above comparable GAAP measures in two earnings releases. The Commission imposed a $100,000 fine for violation of Section 13(a) of the Securities Exchange Act of 1934, which, through application of Regulation S-K, requires GAAP financial measures to have “equal or greater prominence” as non-GAAP information within a company’s...

Enforceability of Trump Steel Tariffs May Depend on 50-Year-Old Law

Geoff Morgan was asked by Lawyer Monthly to comment on the pending lawsuit by the American Institute for International Steel (AIIS) challenging the constitutionality of President Trump's steel tariffs. Read more about the the challenges AIIS faces in what is sure to be an uphill battle in an uncertain political landscape. Morgan Legal Group Commentary on AIIS Lawsuit...