Securities Regulation Committee Activity in Review

As published in the NY Business Law Journal:

Winter 2012 NY Business Law Journal
Securities Regulation Committee

The Securities Regulation Committee has continued its monthly meeting programs addressing a wide range of matters of importance to securities law practitioners. Our dinner meetings tend to foster lively discussions, and afford Committee members an opportunity to discuss “hot topics” with persons closely associated with them. Since our last Committee report in the Summer 2012 journal, among the topics presented at meetings were:

1. Social Media and the Securities Lawyer: A User’s Guide
2. Recent SEC Enforcement Activities and Current Initiatives
3. JOBS Act: Changes to the Capital Raising Process
4. Securities Enforcement: Insights from a Recent Former Prosecutor
5. FINRA Rules Update
6. Financial Regulatory Reform Update
7. Securities Arbitration
8. Effects of the JOBS Act on Marketing Activities of Private Investment Funds
9. Confl icts of Interest and Other Ethics Issues in Private Equity Funds
10. Capital Raising or Hair Raising: The Trials of JOBS (including an analysis of the proposed rule to eliminate general solicitation)
11. Rational Boundaries for SEC Cost-Benefi t Analysis
12. CFTC & SEC Update: Clarifi cations to the End-User Exception to Mandatory Clearing Requirements
and New Rules for Swap Participants

In addition, our Private Investment Funds Subcommittee held a meeting in April 2012, titled “Unpacking New Form PF: What You Need to Know, Now.” In June 2012, we had a meeting on “SEC Adviser Examinations: Are You Ready?” At this meeting our speakers included a former Director of the SEC’s Division of Investment Management and an SEC Associate Director who currently heads the National Investment Adviser/Investment Company Examination Program. The Subcommittee closely tracks developments and emerging trends in the private investment funds industry.

Furthermore, in October, the Committee submitted a comment letter to the SEC on proposed rules Eliminating the Prohibition Against General Solicitation/Advertising in Rule 506 and Rule 144A. Finally, two of our members gave a presentation called “Capital Raising or Hair Raising: The Trials of JOBS” at the Business Law Section Fall Meeting held in Ithaca, NY.

For more information about, and how to join, the Securities Regulation Committee and Private Investment Funds Subcommittee, go to the website www.nysba.org/ SecuritiesRegulation or www.nysba.org/PIF. We are also on LinkedIn at www.nysba.org/SecuritiesRegulation- LinkedIn or www.nysba.org/PIFLinkedIn.

- Howard Dicker, Chair

Summer 2012 NY Business Law Journal
Securities Regulation Committee

The Securities Regulation Committee has continued its monthly meeting programs addressing a wide range of matters of importance to securities law practitioners. Our dinner meetings tend to foster lively discussions, and afford Committee members an opportunity to discuss “hot topics” with persons closely associated with them. Since our last Committee report in the Winter 2011 issue of this Journal, among the topics presented at meetings were:

1. Recent Accounting/Auditing Developments that Lawyers Need to Know
2. The SEC’s New Rule on Large Trader Reporting and new Form 13H: With Filing and Compliance Deadlines Looming – Are you ready?
3. What’s New From FINRA
4. Developments in PIPES, Registered Directs and Other Capital Raising Techniques
5. ISS 2012 Proxy Voting Guidelines and Preparing for the Upcoming Proxy Season
6. What You Don’t Know About OTC Markets (formerly known as Pink Sheets)
7. Ethics Issues for Swap and Other Lawyers
8. Blue Sky and Investment Advisers 2012
9. Early Reports of the 2012 Proxy Season and Shareholder Activism: Things are Heating Up
10. Crisis Communications: From FBI Raids to DWI
11. Crowfunding—making it easier for entrepreneurs to obtain capital or for fraudsters to fleece grandma?
12. CFTC Final Rules Amend Commodity Pool Operator and Commodity Trading Advisor Registration and Compliance Obligations: some exemptions retained but more advisors will need to register

In addition, our Private Investment Funds Subcommittee held a meeting in February 2012, which I titled the “Alphabet Soup of Forms For Investment Advisers Plus Some of the Latest Developments.” We covered issues relating to a seeming alphabet soup of forms applicable to advisers (e.g., Treasury’s TIC Forms SLT and SHC, Bureau of Economic Analysis BE forms, and SEC Form ADV). The Subcommittee closely tracks developments and emerging trends in the private investment funds industry.

For more information about, and how to join, the Securities Regulation Committee and Private Investment Funds Subcommittee, go to the website www.nysba.org/SecuritiesRegulation or www.nysba.org/PIF. We are also on LinkedIn at www.nysba.org/SecuritiesRegulationLinkedIn or www.nysba.org/PIFLinkedIn.

-- Howard B. Dicker, Chair

Winter 2011 NY Business Law Journal
Securities Regulation Committee

The Securities Regulation Committee has continued its monthly meeting programs addressing a wide range of matters of importance to securities law practitioners. Our dinner meetings tend to foster lively discussions, and afford committee members an opportunity to discuss “hot topics” with persons closely associated with them. Since our last committee report in Summer 2011, among the topics presented at meetings were the following:

1. Lessons to Be Learned from the Financial Crisis: A Focus on Financial Regulatory Reform
2. An SRO for Investment Advisers
3. The New SEC Whistleblowers Rules: A Changing Landscape for Compliance Programs
4. Trading Securities in Private Companies (like Facebook and Twitter)
5. What Is Material Information? How We Can Learn From Securities Litigation Experts.
6. Unsettled SEFs [Swap Execution Facilities]: Uncertainty under Unfolding SEC and CFTC Regulations
7. Political Spending by Public Companies—Ripe for Regulation?
8. Proxy Access Shareholder Proposals for 2012—Let the Games Begin

In addition, our Private Investment Funds Subcommittee has gotten off to a great start since its inaugural meeting in March 2011. Its mission is to closely track developments and emerging trends in the private investment funds industry. The subcommittee will monitor the adoption of new rules and regulations and pending proposals for reform. It will also monitor the emergence of new industry standards and best practices in respect to fund formation and operations. The subcommittee expects to meet on a quarterly basis. We’ve had two meetings since March 2011. In June 2011, there was a presentation on “FCPA and UK Bribery Act Enforcement for Asset Managers.” And in October we had a presentation on “Investment Adviser Registration Rules and Current SEC Initiatives—Dialogue with the SEC Staff,” featuring the newly appointed branch chief of the SEC‘s recently formed Private Fund Adviser Regulation Branch.

For more information about, and how to join, the Securities Regulation Committee and Private Investment Funds Subcommittee, go to the website www.nysba.org/SecuritiesRegulation or www.nysba.org/PIF. We are also on LinkedIn (member only) at www.nysba.org/SecuritiesRegulationLinkedIn or www.nysba.org/PIFLinkedIn.

---Howard Dicker, Chair

Summer 2011 NY Business Law Journal
Securities Regulation Committee

The Securities Regulation Committee has continued its monthly meeting programs addressing a wide range of matters of importance to securities law practitioners. Our dinner meetings tend to foster lively discussions, and afford Committee members an opportunity to discuss “hot topics” with persons closely associated with them. Since our last Committee report in Summer 2010, among the topics discussed at meetings were:

1. Corporate Governance and Risk
2. Fairness Opinions—Recent Cases and Other Developments
3. Financial Reform Legislation—an Insider’s View
4. Current Issues in Executing Capital Markets Transactions
5. FINRA Regulatory Notice 10-22: Obligation of Broker-Dealers to Conduct Reasonable Investigations in Regulation D Offerings, plus other developments
6. Reverse Mergers
7. Dodd Frank Act: (A) Investment Adviser registration and other provisions affecting Hedge Funds and Private Equity plus (B) the Corporate Governance & Executive Compensation provisions
8. Dodd-Frank Act: Derivatives provisions (that even non-derivatives lawyers need to know)
9. After the Subprime Crisis: A New Era of Financial Reporting
10. “Proxy Access”
11. Recent 2nd Circuit decision involving SOXA 304 (clawback) and indemnifi cation rights of the CEO and CFO
12. “Proxy Plumbing” & the SEC Concept Release
13. Hedge Fund Compliance: How to Avoid A Mess/FCPA Developments: Bribery and Corruption
14. Trends in Financial Statement Fraud/Current Issues at the PCAOB
15. Professional Responsibility and the General Counsel
16. SEC proposal on Investment Adviser Registration
17. SEC proposal on Whistleblower provision in the Dodd-Frank Act
18. Activist Investors and Activist Investing
19. Information Security in the Practice of Law
20. 2010 Securities Enforcement Update and 2011 Outlook
21. M & A Disclosure Matters and Other SEC Considerations
22. Recent “Poison Pill” Developments
23. New Lobbyist Regulations’ Impact on Investment Managers, Private Investment Funds, Placement Agents and Others
24. Dodd-Frank Act update and other developments for public companies

In addition, the Private Investment Funds Subcommittee was formed. Its mission is to closely track developments and emerging trends in the private investment funds industry. The subcommittee will monitor the adoption of new rules and regulations and pending proposals for reform. It will also monitor the emergence of new industry standards and best practices in respect of fund formation and operations. The subcommittee expects to meet on a quarterly basis. Participants will include law-firm and in-house practitioners representing both hedge fund and private equity/VC fund managers and investors. The subcommittee’s successful inaugural meeting was held on March 10, 2011, and had a presentation on “Recent Insider Trading Cases and Enforcement Activities.”

The Committee also submitted comment letters to regulatory authorities on a variety of proposed rules (some of which implement the Dodd-Frank Act):

• SEC: Disclosure Related to “Conflict Minerals”

• SEC: Disclosure of Mine Safety Information

• SEC: Disclosure by Resource Extraction Issuers

• SEC: (i) Exemptions for Advisers to Venture Capital Funds, Private Fund Advisers With Less Than $150 Million in Assets Under Management, and Foreign Private Advisers and (ii) Rules Implementing Amendments to the Investment Advisers Act of 1940

• FINRA: amendments to FINRA Rule 5122 to Address Member Firm Participation in Private Placements

• CFTC: Commodity Pool Operators and Commodity Trading Advisors: Amendments to Compliance Obligations

---Howard Dicker, Chair

Winter 2010 NY Business Law Journal
Securities Regulation Committee

Since our last update, the Securities Regulation Committee has continued its monthly meeting programs addressing a wide range of matters of importance to securities law practitioners. Our dinner meetings tend to foster lively discussions, and afford Committee members an opportunity to discuss “hot topics” with persons closely associated with them. Among the topics presented at our recent meetings were:

1. Corporate Governance and Risk
2. Fairness Opinions—Recent Cases and Other Developments
3. Financial Reform Legislation—an Insider’s View
4. Current Issues in Executing Capital Markets Transactions
5. FINRA Regulatory Notice 10-22: Obligation of Broker-Dealers to Conduct Reasonable Investigations in Regulation D Offerings, plus other developments
6. Reverse Mergers
7. Dodd Frank Act: (A) Investment Adviser registration and other provisions affecting Hedge Funds and Private Equity, plus (B) the Corporate Governance & Executive Compensation provisions
8. Dodd-Frank Act: Derivatives provisions (that even non-derivatives lawyers need to know)
9. After the Subprime Crisis: A New Era of Financial Reporting
10. “Proxy Access”
11. Recent 2nd Circuit decision involving SOXA 304 (clawback) and indemnification rights of the CEO and CFO
12. “Proxy Plumbing” & the SEC Concept Release

In addition, at the Business Law Section Fall Meeting, the Committee sponsored two outstanding programs. The fi rst was “Trends in Private Placements, PIPEs, Registered Directs, Confidentially Marketed Public Offerings and Bought Deals.” We heard from an experienced banker and a seasoned lawyer on the current techniques used by companies to raise capital and how to navigate the issues. Then, in the “Extraterritorial Reach of the Federal Securities Regulation” program, we heard from a securities litigator and a law professor/former SEC enforcement attorney on how the recent Morrison Supreme Court decision overruled nearly 50 years of accepted case law, and what that means to us. A lively discussion ensued.

---Howard Dicker, Chair

Summer 2010 NY Business Law Journal
Securities Regulation Committee

The Securities Regulation Committee has continued its monthly meeting programs addressing a wide range of matters of importance to securities law practitioners. Our dinner meetings tend to foster lively discussions, and afford Committee members an opportunity to discuss “hot topics” with persons closely associated with them. Among the topics presented at our recent meetings were:

1. Proposed Amendment to SEC Rule 163(c), which would allow underwriters of “well-known seasoned issuers” (WKSIs) to contact investors prior to the filing of a registration statement
2. Expert Networks—How Hedge Funds and Other Investors Can Get the Inside Track Legally (and how to avoid violating Rule 10b-5 and Reg FD)
3. New Developments in Federal and Corporate Law, Shareholder Activism and Annual Meeting Procedures, Loss of Broker Voting, Proxy Enhancement Rules, and Proxy Access
4. New York’s Power of Attorney Legislation
5. Environmental disclosures and the recent SEC climate change risk guidance
6. The SEC’s recent equity market structure initiatives, including dark pools (i.e., trading systems for trading large blocks of stock between institutions off-exchange and out of public view) and short sales
7. Recent amendments to Regulation SHO, the new short-sale rule and its implications
8. Developments in Investor Relations for Public Companies and Alternative Asset Managers

—Howard Dicker, Chair

Fall 2009 NY Business Law Journal
Securities Regulation Committee

The Securities Regulation Committee of the Business Law Section has had a robust series of meetings these past few months, especially in view of the recent SEC initiatives and changes affecting the capital markets. We have monthly dinner meetings, followed by a review of recent developments in securities law and a program portion. At our June meeting, Colin Diamond of White & Case LLP discussed “New Media and Retail Shareholder Participation” and Eric Robinson of Wachtell Lipton discussed “The SEC’s Shareholder Access Proposals and Senator Schumer’s Shareholder Bill of Rights.” In July, we moved to presentations regarding the implications of state law developments to securities practitioners. Michael Allen of Richards, Layton & Finger spoke about recent Delaware law changes, and Keith Bishop of Allen Matkins Leck Gample Mallory & Natsis spoke about developments in California law. In September, Robert Messineo of Weil Gotshal discussed further developments in connection with the SEC’s proxy access proposal, including the comments of the American Bar Association, and Howard Dicker of Weil Gotshal discussed the SEC’s proposals regarding proxy disclosure and solicitation enhancements. Also at the meeting, Rhonda Brauer of Georgeson Inc. discussed the recent report of the ABA Task Force on Delineation of Governance Roles and Responsibilities. In October, Luigi De Ghenghi, John Brandow and Reena Sahni of Davis Polk & Wardwell discussed certain of the legislative and regulatory responses to the financial crisis, and Matthew Kaplan of Debevoise & Plimpton spoke about developments in insider trading and the SEC’s misappropriation theory, focusing on the action brought by the SEC against Mark Cuban. Looking forward, we are planning to have our November meeting hosted by the New York Stock Exchange.

At our meetings we generally have an active and engaging dialogue among the speakers and attendees regarding the discussion topics. We have made continuing efforts to encourage younger attorneys to join the Committee and to participate in its activities.

—Jeffrey Rubin, Chair

Fall 2007 NY Business Law Journal
Securities Regulation Committee

The Committee on Securities Regulation has continued its monthly meeting programs addressing a wide range of matters of importance to securities law practitioners. Among the topics presented at our recent meetings were electronic proxy delivery, Moody’s reviews of executive compensation and internal control disclosures, short sales, "empty voting," the U.S. Chamber of Commerce’s report on U.S. capital markets, the Pink Sheets, and various SEC rule proposals. In addition, the Committee submitted a comment letter to the SEC on its proposed rules regarding the prohibition of fraud by advisers to certain pooled investment vehicles, and the accredited investor standards associated with certain private investment vehicles.

The Committee is currently drafting comment letters regarding a number of new SEC rule proposals.

Our dinner meetings tend to foster lively discussions, and afford Committee members an opportunity to discuss "hot topics" with persons closely associated with those topics.

—Jeffrey W. Rubin, Chair

Spring 2007 NY Business Law Journal
Corporations Law and Securities Law

The Committees on Corporation Law and Securities Law met jointly at the Section’s Fall Meeting, held at the Cranwell Resort in Lenox, Massachusetts. The joint meeting has been the custom for the Fall Meeting.

Present were: Janet Geldzahler, Robert Fine, Joseph Hansen, Glenn Witecki, Gary Trechel, Robert Yellen, Jeffrey Rubin, Richard Gutman, Edward Cohen and Frederick Attea.

Mr. Attea noted that the primary items covered by the Corporation Law Committee during 2006 dealt with the continued work on a proposed revision to the New York Not-For-Profit Corporation Law, efforts to deal with consequences of the "Publication Bill" and providing "educational" opportunities to members with CLE credit.

The revised NFPCL draft was presented to the Executive Committee of the House of Delegates of the NYSBA earlier in June of this year. The New York City Bar Association requested time to review the proposed legislation and, accordingly, the Executive Committee of the NYSBA Executive Committee suggested that the matter be deferred for this reason. At press time the Corporation Law Committee anticipated resubmitting the proposed revision for action by the House of Delegates at the January 2007 meeting.

The other subject that occupied substantial Committee time was proposed amendments to the Publication Bill which finally became law. There was a general discussion regarding the "negotiations" between the Committee and the Governor’s Office and other interested parties. As finally adopted, the law did not contain many of the most onerous provisions of the early version of the bill but there is still a substantial desire to repeal the law entirely. Mr. Attea noted that a bill was introduced or about to be introduced that would repeal the publication law; however, the NYSBA legislative experts did not believe that this bill would have any material support.

There was a discussion regarding the feasibility of joint projects with the Corporation Law and Securities Law Committees. This would be explored further. One example of such a project was the "director majority vote" controversy that was being studied by a Subcommittee chaired by Janet Geldzahler. She generally described the background giving rise to the issue and the status of "majority voting" under current Delaware and New York statutes.

Mr. Attea noted that the Securities Law Committee provided CLE credit on a regular basis at its monthly meetings. The Corporation Law Committee was trying to follow that practice. There was a broad-ranging discussion regarding a need to establish closer ties between the Committees of the Business Law Section and legislative subcommittees that deal with legislation affecting matters covered by the Section’s committees. The Business Law Section’s Legislative Affairs Committee has been formed recently to make progress on this front.

—Frederick G. Attea, Chair (Corporations Law Committee)