These are some of the compliance-related stories that recently caught my attention.
Is Over-Regulation Really the Reason There are Fewer IPOs? by Kevin LaCroix
There is one aspect of Coffee’s analysis that in my mind warrants further consideration. In discussing the advantages for smaller companies of raising money through venture capital or private equity rather than by going public, he notes that in the private markets “litigation risk is lower.” In a later section of his paper, Coffee notes that many of the costs of going public are “hidden,” noting, for example, the concerns small companies considering an IPO may have that when public “a stock price drop might spur litigation.” Coffee does not further elaborate on the possible impact that litigation fears could be having on smaller companies’ decisions to go public, nor does he suggest what might be done to address these concerns. However, it is noteworthy (and to me it rings true) that litigation fears could be among the reasons holding back smaller companies from going public. [More…]
Why Law Firms Should Never Accept Their Fees in Cryptocurrency by John Reed Stark
But having said all of the above, the risks for a law firm that accepts cryptocurrency run a perilous gamut of legal, regulatory, financial, ethical and reputational dangers. Simply stated, accepting cryptocurrency as a fee payment in today’s crypto-manic environment is, despite all of the bus dev allure, just not worth it. [More…]
Wall Street’s Top Cop Chases Loose Change by Stephen Gandel
But 13 months in, Clayton’s SEC appears to be giving quality short shrift, at least as measured by the settlements it is reaching. According to a recent, previously unreported study conducted by Urska Velikonja, a professor of law at Georgetown University, the SEC’s monetary punishments plunged 93 percent in the period from October 2017 to March 2018 — the first half of the SEC’s 2018 fiscal year — compared with the amount in the period a year earlier. The total of $102 million was down from $1.4 billion and was the lowest of any similar period for at least the past 12 years. The number of cases in the same period was down by a quarter. That suggests Clayton has refocused the SEC’s lens on either smaller fish or smaller frauds. [More…]
Insiders Pocket Gains on Buybacks, Vexing Regulator by Gretchen Morgenson and Tom McGinty
Taking advantage of price bumps that often accompany share-repurchase announcements, company executives have been selling significantly more of their stock immediately after the news than they do beforehand, according to an analysis by Robert J. Jackson, Jr. , a commissioner at the Securities and Exchange Commission. [More…]
FAQs on ZTE’s Compliance Settlement by Matt Kelly
The settlement calls for ZTE to hire a “special compliance coordinator,” who will be selected by the U.S. Bureau of Industry and Security. The “SCC” will have a term of 10 years, and report both to ZTE’s chief executive and board of directors; and to BIS. This person will “coordinate, monitor, assess, and report on” all compliance activities by ZTE. He or she will also have authority “to employ at ZTE’s expense as many assistants and other professional staff… as are reasonable.” The agreement mentions a minimum of six assistants. [More…]