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Reminder: Deadline for Nasdaq Certification Approaching 04/10/2014

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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

As described in prior posts, Nasdaq recently amended its listing rules regarding the independence of compensation committee members.  A description of the changes may be found here and here.

The deadline for complying with Nasdaq’s revised listing requirements is the earlier of (i) a company’s first annual meeting after January 15, 2014, or (ii) October 31, 2014.  Listed companies are required to certify to Nasdaq, within 30 days after the applicable deadline, that they have complied with the new listing rules. The certification must be filed through Nasdaq’s listing center and may be found here.

For more information on the new Nasdaq listing requirements affecting compensation committees please contact Daniele Ouellette Levy.

Action Item for Smaller Reporting Companies – Update Your D&O Questionnaire 03/13/2014

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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

It is proxy season for public companies with December 31 fiscal year ends. While the proxy disclosure requirements did not significantly change in 2013, there are important updates companies should make to their D&O questionnaires.

Smaller Reporting Companies (“SRCs”) should consider making the following updates:

  1. Compensation Consultants Conflicts of Interest: All reporting companies are now required to disclose in their proxy statement conflicts of interest of any compensation consultants engaged during the year to provide advice on the amount or form of executive and director compensation. SRCs should revise their D&O questionnaires to include questions regarding personal or business relationships between directors or executive officers and compensation consultants engaged by the company.
  2. Compensation Committee Independence: As described in previous posts, Nasdaq recently adopted changes to its listing standards which require compensation committee members to meet heightened independence standards. While many of these changes do not apply to SRCs, SRCs should consider updating D&O questionnaires to include questions regarding compensation committee independence in order anticipate required changes in the composition of the compensation committee in the event the company no longer qualifies as an SRC.
  3. Bad Actors: SRCs should consider including questions in their D&O questionnaires which would help the company determine whether any directors or executive officers would be considered “bad actors” under the newly adopted Rule 506(d) under Reg. D. The bad actor disqualification in Rule 506(d) would make the Rule 506 exemption under Reg. D unavailable for any private securities offering in which certain bad actors are involved.

For more information or assistance revising your D&O questionnaire please contact Daniele Levy.

Boston Business Journal Revisits Local Biotech IPO’s: “Where are They Now? 03/12/2014

Posted by Morse, Barnes-Brown Pendleton in Life Sciences, Public Companies.
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On March 7, the Boston Business Journal (BBJ) published an article titled “A year of biotech IPOs: Where is their stock price now?” which highlights fourteen local biotech companies that went public last year, ranking them by their stock increase seen since the close of their first day on the market until the March 6 close. A year ago this month, Enanta Pharmaceuticals and Tetraphase Pharmaceuticals, both of Watertown, MA, became the first two Massachusetts biotech firms to go public in what turned out to be the busiest biotech IPO boom in more than a decade.

To see the full list visit the BBJ.

Supreme Court Expands Pool of Claimants in Whistleblower Case 03/07/2014

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Corporate Attorney Joseph MarrowBy: Joseph Marrow

On March 4, 2014, the United States Supreme Court issued its decision in a much anticipated whistleblower retaliation case. In its decision, Lawson v. FMR, LLC, No. 12-3, the Supreme Court expanded the coverage of an anti-retaliation claim under Sarbanes-Oxley Act of 2002 (SOX) to an employee of a privately-held contractor (the contractor provided investment management services to Fidelity mutual funds). Pursuant to the Dodd-Frank Act, the Securities and Exchange Commission established an award program for whistleblowers creating a new private right of action for employees in the financial services sector who suffer retaliation for disclosing information about fraudulent or unlawful conduct related to the offering or provision of a consumer financial product or service. The First Circuit had ruled that the anti-retaliation provision only applies to employees of public companies. In a 6 to 3 vote, the Supreme Court reversed the decision of the First Circuit in favor of expanding the coverage of the whistleblower statute to cover employees of a public company’s private contractors and subcontractors.

In Lawson v. FMR, the Supreme Court interpreted a provision of SOX, namely 18 U.S.C. Section 1514A protecting whistleblowers, which provides in part: “No [public] company …, or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of [whistleblowing or other protected activity].” The Supreme Court was faced with the question whether the protected class was simply limited to employees of the public company itself or would include “employees of privately held contractors and subcontractors – for example, investment advisers, law firms, accounting enterprises – who perform work for the public company?” Noting that SOX was enacted following the Enron scandal and in part in response to that scandal, the Supreme Court interpreted the statute as a response to a “concern about contractor conduct of the kind that contributed to Enron’s collapse.” As such, the Supreme Court held that a broader interpretation of the statute (to capture contractors that perform work for public companies) was warranted.

The implications of the Supreme Court’s decision are far reaching. The Supreme Court’s holding significantly expands the pool of potential whistleblower claimants. It remains to be seen whether the parade of horribles predicted by the dissent – resulting in a multitude of spurious claims – will come to fruition.

For more information on this topic please contact Joe Marrow.

SEC Releases Study of Public Company Disclosure Requirements 02/07/2014

Posted by Morse, Barnes-Brown Pendleton in Corporate, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

The JOBS Act, which became law in April 2012, requires the SEC to conduct a review of the disclosure requirements in Reg. S-K in order to identify how the rules could be updated to modernize and simplify the registration process for emerging growth companies and reduce related costs. Reg. S-K is the primary regulation under the federal securities laws detailing the disclosure requirements applicable to public companies.

At the end of December 2013, the SEC released the results of its review of Reg. S-K.  In the study the SEC noted it had not conducted a comprehensive review of Reg. S-K since 1996 and stated that a reevaluation of the disclosure requirements was warranted due to significant changes in the manner many public companies operate their businesses and world events which have altered the regulatory framework for public companies. In such reevaluation the SEC would aim to ensure existing and potential investors, as well as the marketplace as a whole, receive meaningful information upon which to base investment decisions. In addition, the SEC stated that its regulatory framework must ensure that the disclosure requirements focus on information which is material and are flexible enough to adapt to dynamic circumstances.

This study is a starting point. In its conclusion, the SEC proposes undertaking a comprehensive plan to systematically review the disclosure requirements in all of the SEC’s rules and forms concerning the presentation and delivery of information to investors and the marketplace, not just Reg. S-K. We expect more to come on this issue.

For more information on public company disclosure requirements please contact Daniele Ouellette Levy.

Are Higher Insurance Coverage Costs the Result of an Increase in M&A Litigation? 01/24/2014

Posted by Morse, Barnes-Brown Pendleton in M&A, Public Companies.
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Corporate Attorney Joseph MarrowBy: Joseph Marrow

The proliferation of mergers and acquisition litigation activity has led to changes in the directors and officers insurance coverage marketplace. The Wall Street Journal recently reported that in the first three quarters of 2013, 98% of acquisitions valued at $500 million or more have resulted in lawsuits (in 2007, 53% of similar transactions resulted in litigation). The increased litigation activity has caused the insurance industry to take notice and respond. To learn what this means and how companies protect themselves, please read the full post here.

For questions on changes on insurance coverage, please contact Joe Marrow.

Transitioning to the 2013 COSO Framework 01/23/2014

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Corporate Attorney Hillary PetersonBy: Hillary Peterson

In May 2013, the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) published an update to it’s Internal Controls – Integrated Framework, originally published in 1992. The 1992 framework has been adopted by the majority of publicly-traded companies in the United States as a way to design, implement and assess the effectiveness of the internal controls of the company. The 2013 framework has been updated in a number of ways to address the evolving issues facing companies today.

In a recent meeting of the Securities and Exchange Commission (“SEC”) Regulations Committee, the SEC staff indicated that it expects U.S. publicly-traded companies to review their internal controls and to update and revise those controls in order to comply with the newly updated COSO framework. While the new framework is not due to supersede the 1992 framework until December 15, 2014, the 2013 framework was issued in May 2013 in order to allow companies time to review and update their internal controls in advance of that date. The SEC staff has stated that, especially after the December 15, 2014 transition date, companies that continue to rely on the 1992 framework will likely receive questions from the staff about whether or not their internal controls meet the SEC standard.

For more information on the COSO Framwork, please feel free to contact Hillary Peterson.

Nasdaq Revises Compensation Committee Requirements – Again 01/22/2014

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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

Nasdaq recently amended its listing rules regarding the independence of compensation committee members. The latest amendment comes on the heels of an amendment approved by Nasdaq in early 2013 which imposed new independence requirements on members of compensation committees. Under the rules approved in early 2013, any director who accepts compensation from the company, other than for service as a member of the Board or a committee of the Board, will not meet the independence requirements for membership on the compensation committee and would be in eligible to serve on such committee. In November 2013, Nasdaq eliminated this bright line test and instead provided that the Board must consider compensation as a factor in determining whether a Board member is independent and eligible to serve on the compensation committee.

The deadline for compliance with the revised listing requirements is the earlier of (i) a company’s first annual meeting after January 15, 2014, or (ii) October 31, 2014. Listed companies will be required to certify to Nasdaq, within 30 days after the applicable deadline, that they have complied with the new listing rules. The compensation committee certification must be filed through Nasdaq’s listing center and may be found here.

For more information on the new Nasdaq listing requirements regarding compensation committees please contact Daniele Ouellette Levy.

Social Media – Due Diligence 12/11/2013

Posted by Morse, Barnes-Brown Pendleton in Corporate, Public Companies.
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Corporate Attorney Jonathan CallaBy: Jonathan Calla

Social media websites such as LinkedIn, Twitter, Facebook, Instagram and YouTube have become useful vehicles for companies to disseminate information. The instantaneous promotion and advertising of company products and services to a wide audience through social media websites has motivated companies to incorporate the use of social media websites as a part of their business strategy. The integration of social media websites to the business strategy of companies is expected to continue and grow in response to the pressure on companies to remain competitive in their respective industries.

In most M&A transactions, and more specifically as part of the legal due diligence process, a buyer will typically request from a target any press releases that have been previously disseminated by a target over a defined period of time. While a press release request may not produce the delivery by a target of documents related to its use of social media, review of the content shared by a target on such websites should not be ignored by a buyer. Accordingly, buyers should consider expanding their due diligence requests of a target to specifically include requests for information related to its use of social media websites. More specifically, buyers may want to consider incorporating the following into their due diligence request lists: (i) the names of social media websites used by the company, (ii) the names of employees or third parties who access and operate social media websites used by the company (and any usernames or passwords, if applicable), and (iii) an explanation of the company’s use of each social media website.

Specifically requesting the social media website information above will ensure its delivery by a target, and more importantly, will assist buyers with a comprehensive review of a target’s social media presence.

For more information on this topic, please feel free to contact Jonathan.

Delaware Legislative Update 12/09/2013

Posted by Morse, Barnes-Brown Pendleton in Corporate, Public Companies.
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Corporate Attorney Josh FrenchBy: Joshua French

Many times prior to an institutional financing, acquisition or an IPO, a company will review its corporate records and notice that there may be a couple of loose ends to tie up with ratifying board resolutions. While this works for many corporate actions, certain actions are not permissible to be retroactively approved under Delaware law and are void. Among these actions include the issuance of stock that was not authorized under a company certificate of incorporation filed with the Delaware Secretary of State. This means that if shares of stock were issued to stockholders before there were enough shares authorized, that those shares are void and any action taken by those stockholders (for example, electing board members) would also be void. This, obviously, could be very problematic, particularly if the board is no longer controlled by the original stockholders.

Beginning in April 2014, the Delaware General Corporation Law (the DGCL) will allow these types of mistakes to be rectified and will allow for corporations to remedy any actions taken that would otherwise have been deemed void. In order to remedy a defective corporate act, the following steps will need to be taken:

  • The board of directors must pass a resolution ratifying the defective corporate act and stating in detail the defect seeking to be cured.
  • If the resolution would have needed to have been approved by the stockholders, the stockholders must also approve the resolution and the company must provide at least twenty days prior notice of the meeting at which the resolution is to be adopted. The notice must also state that any challenge to the ratification must be brought within 120 days of the date on which the resolution is adopted.
  • If the action being remedied would have required a filing with the Secretary of State of Delaware, then a “Certificate of Validation” must be filed with the Secretary of State. The form of this certificate is currently being prepared by the Secretary of State’s office.
  • If the resolution did not require stockholder approval, the corporation must provide notice of the adoption of the ratification resolution to the stockholders within 60 days of approval. The notice must also that any challenge to the ratification must be brought within 120 days of the date on which the resolution is adopted.

This procedure will not be effective until April 1, 2014, but it may be worthwhile for corporations to consider if there are any actions which may not have been approved properly when completed and contact your law firm to determine whether those actions need to be approved under this new section of the DGCL or if there are steps that can be taken now to ensure that proper corporate approvals had been obtained.

For more information on this topic, please feel free to contact Josh.

Arbitration Provisions and Post Closing Disputes 12/04/2013

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Corporate Attorney Joseph MarrowBy: Joseph Marrow

Many business acquisition agreements provide that post-closing disputes relating to earn-outs, working capital adjustments and other purchase price adjustments are to be submitted to an independent third party (i.e., an accounting firm) for resolution. A recent decision of the Delaware Supreme Court, Viacom Int’l, Inc. v. Winshall, No. 513, 2012, 2013 WL 367878786 (Del. July 16, 2013) (“Viacom”), reaffirms the enforceability and binding nature of the alternative dispute resolutions procedures chosen in these agreements. In Viacom, the parties to a merger agreement agreed to submit a dispute regarding an earn-out issue to arbitration subject to resolution by an independent accounting firm which decision would be final, binding and conclusive. The accounting firm made a determination adverse to Viacom and Viacom filed an action in state court seeking a declaration that the arbitration award was erroneous.

The Delaware Supreme Court upheld the arbitration award. The Court noted that the challenge to the arbitration award was governed by the Federal Arbitration Act. Absent a determination that the decision “was procured by fraud” or was subject to “manifest error”, the Court could not vacate the award. The Court rejected Viacom’s arguments of fraud or manifest error.

The Viacom decision lends support to the ability of parties to rely on the enforceability of alternative dispute resolution provisions in business acquisition agreements to resolve post-closing disputes as long as such disputes fall within the scope of the independent arbitrator’s scope of review.

For more information on this topic, please feel free to contact Joe.

Employee Classification and M&A 12/02/2013

Posted by Morse, Barnes-Brown Pendleton in Corporate, New Resources, Public Companies.
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By: Mark Tarallo

A Massachusetts Superior Court judge recently held up the sale of The Boston Globe (and related entities) to Red Sox owner John Henry, as a result of a restraining order filed against the Worcester Telegram & Gazette, part of the New England Media Group along with The Boston Globe. While the injunction was eventually dissolved and the sale completed, it did create some tense moments in the process. The suit was filed by a class of newspapers carriers, claiming that they were misclassified as independent contractors when they should have been treated as employees. While the actions that gave rise to the suit happened several years ago, employee classification issues are back in the spotlight. The United States Department of Labor budget for 2014 includes a line item of $10 million for grants to the states to investigate worker misclassification and recover additional taxes. States that are looking to generate additional tax revenue will be quick to take advantage of these grants.

While most M&A transactions include representations from the seller regarding employee classification issues, parties considering an M&A transaction must place a renewed emphasis on spotting and dealing with any issues prior to the closing. Liabilities for misclassified workers can travel with the target, leaving the buyer to pay taxes and penalties that it did not anticipate, and indemnity claims may not completely resolve the problem. Sellers that cannot properly document their classification of employees run the risk of seeing their purchase price reduced, or deals fall apart completely, if buyers cannot get comfortable with the classification of the seller’s workers. Both sellers and buyers must work to identify and fix these issues prior to closing, to avoid having an unwanted third party (the DOL or a corresponding state agency) in their transaction.

For more information on this topic, please feel free to contact Mark.

SEC Proposal – Pay Ratio Disclosure Rules 11/15/2013

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Corporate Attorney Joseph MarrowBy: Joseph Marrow

On September 18, 2013, the U.S. Securities and Exchange Commission (SEC) issued proposed rules that would require companies to disclose the ratio between the compensation of a reporting company’s compensation paid to its chief executive officer (CEO) to the median compensation paid to all its employees. As such, the proposed rule would require disclosure of the following information:

  • the total annual compensation paid to the reporting company’s CEO;
  • the median of the total annual compensation of all employees of the registrant, except for the registrant’s CEO; and
  • the ratio of the median to the total annual compensation paid to the CEO.

Those who support the proposed rule argue that the pay ratio disclosure will provide valuable information to investors (and prospective investors) by providing additional information regarding reporting company compensation practices. Opponents question the usefulness of the information and the difficulty of applying the rules to companies, particularly those with global workforces and those with many classifications of workers. The rules were adopted pursuant to requirements of Section 953(b) of the Dodd-Frank Act. Comments to the rules are due no later than December 2, 2013. It is expected that the SEC will issue final rules in 2014.

Please note that all public companies are not required to make the pay ratio disclosure. The proposed rules specifically exempt emerging growth companies (which include issuers with less than $1 billion in gross revenue in its most recently completed fiscal year), smaller reporting companies (companies with less than $75 million in public float or less than $50 million in revenues, if they have no public float) and foreign private issuers. The proposed rules require that the information be disclosed in the registrant’s annual report on Form 10-K, registration statements filed under the Securities Act of 1933 and the Securities and Exchange Act of 1934 and proxy and information statements.

Please feel free to contact a member of our public company practice group with any questions regarding the proposed rules or their implications on your company.

SEC Proposes Standards for Public Company Diversity Policies 11/12/2013

Posted by Morse, Barnes-Brown Pendleton in Legal Developments, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

The SEC, in coordination with five other federal agencies, recently proposed new standards for assessing the diversity policies of public companies.

Section 342 of the Dodd Frank Act directed the SEC, and certain other federal agencies, to establish an Office of Minority and Women Inclusion. This office is responsible for developing standards by which the diversity policies and practices of the entities regulated by the SEC may be assessed. In its proposal, the SEC states that an assessment of the diversity policies and practices of a public company may include a review of the following factors:

  • organizational commitment to diversity and inclusion;
  • workforce profile and employment practices;
  • procurement and business practices – supplier diversity; and
  • practices to promote transparency of organizational diversity and inclusion.

The proposal provides that the SEC will tailor its assessments to take into consideration the public company’s size and other characteristics – such as total assets, number of employees, governance structure, revenues, number of members and/or customers, contract volume, geographic location, and community characteristics. The SEC has also stated that the assessment of diversity policies and practices undertaken by the SEC will not be a formal examination, but rather will include a self-assessment by the public company, voluntary disclosure to the SEC and public disclosure via the company’s website.

The SEC has requested comments on the proposal which are due by December 24, 2013.

For more information on this topic, please feel free to contact Daniele.

Action Items for Smaller Reporting Companies: Nasdaq Changes Compensation Committee Requirements 01/31/2013

Posted by Morse, Barnes-Brown Pendleton in Legal Developments, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

The SEC recently approved changes to Nasdaq’s corporate governance requirements regarding compensation committees. These changes apply to any company whose stock is listed on Nasdaq – with certain significant exceptions. Smaller reporting companies, or SRCs, are exempt from many, but not all, of the new requirements. Here is a brief summary of how the changes will affect SRCs.

All Nasdaq listed companies, including SRCs, are now required to have a compensation committee consisting of at least two members each of whom qualify as independent under Nasdaq’s current listing standards. The compensation committee must adopt a formal written charter which includes specific provisions noted here:

  • the scope of the compensation committee’s responsibilities, and how it carries out those responsibilities, including structure, processes and membership requirements;
  • the compensation committee’s responsibility for determining, or recommending to the board for determination, the compensation of the chief executive officer and all other Executive Officers of the Company; and
  • that the chief executive officer may not be present during voting or deliberations on his or her compensation.

Alternatively, in the absence of a compensation committee charter, a SRC may have the Board adopt resolutions specifying the committee’s responsibilities and authority. The compensation committee is required to review and reassess its charter on an annual basis.

Action Item: SRCs that do not have a compensation committee should begin identifying potential compensation committee members.

Action Item: SRCs who do not have a compensation committee charter should begin drafting a charter. SRCs who already have a charter in place should review their charter to determine whether modifications are required.

SRCs have until the earlier of their first annual meeting after January 14, 2014, or October 31, 2014 to comply with the provisions set forth above, Each listed company must certify to Nasdaq that it has met the requirements described above no later than 30 days after such date.

For more information on this topic, please contact Daniele Levy.

BBJ Features MBBP Attorneys Article “A Solution for Smaller Companies” 02/09/2012

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Public Companies.
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Corporate Attorney Daniele Ouellette Levy
The Boston Business Journal recently published an article written by MBBP attorneys Daniele Levy and Joe Marrow. The article, titled “A Solution for Smaller Companies”, discusses the BX Venture Market – a new trading platform recently proposed by NASDAQ.  Daniele and Joe provide insights into the benefits the BX Venture Market may provide for smaller public companies.

To learn more on this subject, visit the BBJ forCorporate Attorney Joseph Marrow the full article.

Daniele Levy and Joe Marrow regularly advise smaller public companies on a broad range of matters. For more information please contact either Daniele or Joe.

Action Item for Public Companies: Disclosing Cybersecurity Risks 11/14/2011

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Legal Developments, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Levy

The U.S. Securities and Exchange Commission (SEC) recently issued guidance to help public companies assess what, if any, disclosure should be provided regarding cybersecurity risks or incidents. While federal securities laws do not specifically require companies to disclose cybersecurity risks, the SEC’s guidance makes it clear that a number of existing disclosure requirements may impose obligations to disclose cybersecurity matters.

The SEC specifically stated that its guidance and the federal securities laws should not be interpreted to require disclosure that would compromise a company’s cybersecurity efforts.

As an action item, companies should consider whether cybersecurity risks and incidents may affect their risk factor disclosure, MD&A, description of the company’s business and operations, legal proceedings disclosure and financial statements.

Disclosure committees, in their periodic review of the effectiveness of disclosure controls and procedures, will want to consider cybersecurity matters as well.

For more information on this topic, please feel free to contact Daniele Levy.

Smaller Reporting Companies Granted Temporary Exemption from Say-on-Pay Vote 02/07/2011

Posted by Morse, Barnes-Brown Pendleton in Legal Developments, Public Companies.
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Corporate Attorney Jonathan CallaBy Jonathan Calla

Smaller Reporting Companies (defined as a company with a public equity float of less than $75 million) have been granted a temporary exemption from Section 14A of the Securities Exchange Act of 1934 regarding shareholder approval of executive compensation by implementing Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

As of January 21, 2011, Smaller Reporting Companies will not be required to conduct a Say-on-Pay Vote or a Frequency Vote until the first annual meeting of the shareholders occurring on or after January 21, 2013. However, this exemption does not apply to a Golden Parachute Vote, which must be included in a merger proxy statement.

Read the full article here: SEC Adopts Rules for Say-on-Pay Advisory Votes for Executive Compensation

Securities Regulation and the Use of Social Media by Public Companies 09/10/2009

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, Public Companies.
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Corporate Attorney Joseph MarrowBy Joseph C. Marrow

Public companies today, more than ever, disseminate corporate communications to their constituents (shareholders, customers, prospective investors) by means of a variety of social media platforms (corporate web sites, blogs, Twitter). In so doing, companies should consider whether the disclosure of corporate information runs afoul of the federal securities laws. To guard against federal securities law violations, public companies should implement policies to regulate such disclosures by company representatives.

To read more, click on: SEC’s Regulation FD on Fair Disclosure.

NASDAQ Suspension of Minimum Bid Price Requirement to Expire on August 3, 2009 07/30/2009

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy Daniele Ouellette Levy

NASDAQ has stated that it does not expect to extend the suspension of the minimum bid price requirement past July 31, 2009, the current expiration date. Click here for details. Without further action by NASDAQ, the minimum bid price requirement will be reinstated on Monday, August 3, 2009. Once this requirement is reinstated, NASDAQ-listed companies may face delisting proceedings if their closing bid price falls below $1.00 for thirty consecutive business days. The company will then have 180 calendar days to achieve compliance.

NASDAQ initially suspended the minimum bid price requirement in October, citing extraordinary market conditions, and it extended the suspension in each of December and March.

NASDAQ’s recent action is consistent with the actions of the NYSE. The NYSE’s suspension of the minimum trading price requirement will expire on July 31, 2009.

For more information on NASDAQ listing requirements, please contact Daniele Ouellette Levy.

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