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Corporate America is Telling the Truth — Tips to Assure Reg FD Compliance

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With so many voices billowing false narratives and confusion these days, it is sometimes challenging to discern fact from fiction. But amidst all the dubious rhetoric, it’s good to know that sanity still prevails in the world of public companies.

Corporate America is standing out as a beacon of clarity and truth. And this isn’t by accident. It is the result of carefully crafted regulations designed to protect investors and ensure the integrity of the market.

As a refresher, the Securities Act of 1933, affectionately known as the “truth in securities” law, mandates that buyers of securities receive complete, accurate and truthful information before they invest. 

The Securities Exchange Act of 1934, referred to as the “34 Act,” created the Securities and Exchange Commission (SEC) as a body to regulate trading of securities after they have been distributed.

And in the year 2000, the ‘33 and ‘34 Acts were further strengthened by Regulation Fair Disclosure (Reg FD), with the intent of preventing public companies from selectively disclosing important information to certain shareholders and market professionals. Rather, it created a level playing field for all investors by ensuring that material information is disclosed to everyone simultaneously.

As the 25-year mark approaches since Reg FD was enacted, and as the IPO market warms up for the new year, following are a few reminders to help issuers assure compliance:

  • Maintain a formal disclosure policy. Outline procedures for publicly disclosing information, such as through press releases and social media. Press releases are by far the preferred disclosure medium, followed by social media and the company’s website. However, if a company principally uses the latter two vehicles to disclose information vs. press releases, it must ensure that both are widely recognized as the issuer’s primary distribution channels.
  • Train employees. For companies in the process of going public, provide formal Reg FD training – in person or by Zoom – for senior staff and for those who may be privy to sensitive information, and periodically conduct refresher training sessions. Specify who is authorized to communicate with investors and analysts.
  • Anticipate disclosures. Plan ahead if possible, and when doing so, be certain to remind the inner executive circle of the mandate for confidentiality.
  • Review executive presentations. Have an IR advisor or in-house counsel review presentations to be certain they do not contain material non-public information. 
  • Establish black-out periods for trading. Black-out periods can help prevent inadvertent insider trading and Reg FD violations. Some companies limit executives to only trading on a 10b5-1 plan to avoid violations.

Through Reg FD and other SEC mandates, corporations and their leaders are held to stringently high rhetorical standards – and they are doing a good job of adhering to them. Continued compliance requires awareness, regular refreshment, and constant diligent attention.

Roger Pondel, rpondel@pondel.com

Editorial Note: PondelWilkinson has been approved by the California Bar Association to provide Reg FD training to SEC lawyers for MCLE credit, and regularly provides such training to executives of pre-public and publicly traded companies.

What is Investor Relations? 

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As part of our “back-to-basics” blog series on the basic tenants of our business, we’re going to dedicate this post to investor relations.  

It is important to note that the number of investor relations firms, even in major financial markets, such as New York, Los Angeles, Chicago and San Francisco, is relatively small. That’s probably why when we’re at events or gatherings outside of our industry, we’re often asked, “What exactly is investor relations?” 

Let’s keep it simple: Investor relations, or IR for short, is a communications specialty that focuses on helping publicly traded companies get their stories out to Wall Street, including shareholders, potential investors and the broader financial community. Another term sometimes used to describe investor relations is financial public relations.

Public companies come in all sizes, usually determined by market capitalization, which is a company’s total stock value in the public marketplace on any given day. Stocks can be traded in the U.S. ­on Nasdaq, the New York Stock Exchange (NYSE), the OTC Markets, or on foreign exchanges such as the Toronto Stock Exchange (TSX), London Stock Exchange (LSE) and Frankfurt Stock Exchange (FRA), among many others. 

While public companies are highly diverse in what they do, all of them are regulated by governing agencies, depending on where their stock is traded. In the U.S., for example, the main governing body is the Securities and Exchange Commission (SEC), which requires, among other things, that all public companies follow a set of rules and regulations that ensure free and fair disclosure to everyone.

Compliance with these SEC rules is complex for those who are not in the know. Most public companies rely on investor relations professionals, whether in-house or externally, in addition to SEC attorneys, to assure compliance and language that is understandable. The main job of the IR professional is to help the public company communicate clearly and transparently, and in keeping with the law.

Investor relations encompasses many facets, such as disseminating financial information via traditional and social media; responding to investor inquiries; identifying prospective investors and research opportunities; organizing informational and required annual meetings; preparing investor presentations; and more.

Bottom line, the investor relations function is to manage the communications between a public company and investors, while at the same time being cognizant of other audiences – including employees, customers and suppliers – that may be recipients of the information.

The ultimate goal of IR is to deliver a cohesive and compelling message that resonates with investors, ultimately to help build shareholder value that is consistent with a company’s performance, progress, prospects and peers.

George Medici, gmedici@pondel.com

Ignorance is No Excuse: The Importance of Reg FD Training

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You may remember that Martha Stewart spent time in prison.

She served five months behind bars and another five months of house confinement at her 153-acre estate in New York, wearing an electronic monitoring bracelet, for selling 4,000 shares of ImClone Systems before news of the FDA’s rejection of one of ImClone’s cancer drugs was made public.

ImClone’s former CEO, Samuel Waskal, a friend of Stewart’s who presumably gave her the stock tip, served a seven-year prison term after pleading guilty to orchestrating stock trades, as well as to other corporate misdeeds.

How much insider trading is going on in U.S. stock markets based on material, non-public information? At least four times more than regulators actually catch and prosecute, according to research from the University of Technology Sydney. 

Could Reg FD training have helped either of them avoid prison sentences? 

We’d certainly like to think so. For Waskal, of course, he definitely knew better as CEO of a publicly traded company. Stewart may have never heard of Reg FD, but she should have known better as well, based on plain old common sense.

Whether you’re working at a public company for the first time, or you’re a seasoned pro, being aware of Reg FD (Regulation Fair Disclosure) and how to avoid missteps is vitally important. Many companies provide periodic formal Reg FD refresher training even for public company veterans. Not only does such training help prevent employees from disclosure pitfalls, but it also serves as a record that your company takes disclosure seriously.

Starting with the basics, Reg FD became effective more than two decades ago to help the SEC prevent selective disclosure of material, non-public information, remedying the perception of unfairness in communications throughout the investment community. One of the key principles of Reg FD is that information must be broadly distributed, not selectively disseminated. A good rule of thumb is to provide full disclosure to all … all the time.

What constitutes materiality? If there is a substantial likelihood that an investor would consider the subject important in the total mix of information when making an investment decision, and if it is reasonable to expect that the information could have an effect – up or down – on a stock’s price, it’s probably material.

Things to consider include receipt of a big contract, M&A, a stock buy-back program, a director or officer resignation, among many others. Materiality can be somewhat subjective though, so it’s important to communicate with your attorneys if there is any doubt.

There are two simple rules to follow to ensure you’re not running afoul of the SEC (and that you don’t wind up like Martha Stewart):

  • Never buy stock in your company, or encourage others to do so, when you are in possession of material, non-public information.
  • If you ever have questions about whether, and when, you, as an insider, can buy or sell your company’s stock, contact your CEO, CFO or legal counsel.

Keep in mind that while there are remedies for inadvertently disclosing material, non-public information, you should strive never to have to use those remedies. But, just in case, here are the steps to take should someone slip:

  • Let an authorized company spokesperson know as soon as possible, so that that person can work to promptly determine the nature and materiality of the selective disclosure. (Authorized spokespersons are required to determine the cause of the selective disclosure and take appropriate steps to reduce or eliminate the risk of recurrence.)
  • Within 24 hours of the inadvertent disclosure, or at the next opening of market session, a company may issue a press release or file Form 8-K with the SEC containing the material information that was deemed to be selective disclosure.

If it happened to Martha Stewart, is can happen to anyone. “It was horrifying, and no one — no one — should have to go through that kind of indignity, really, except for murderers, and there are a few other categories,” Stewart told Katie Couric during a 2017 interview on the Today Show.

Aside from providing Reg FD training to pre-IPO and newly public companies, along with refresher sessions, PondelWilkinson has been approved by the California Bar Association to provide one-hour Reg FD training sessions to attorneys for CLE credits. While we have to know the ins and outs to be effective trainers, we’d love to hear about your Reg FD experiences.

Laurie Berman, lberman@pondel.com

­10 Tips to Best Prepare for New SEC Universal Proxy Rule Change to Shareholder Voting

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For boards and senior management teams of publicly traded companies, a major law change by the U.S. Securities and Exchange Commission will soon go into effect for what some pundits believe could be a period of renewed activism ahead.

The new rule states that for annual shareholder meetings held after August 31, 2022, parties in a contested election must use universal proxy cards that include all director nominees presented for election.

Without going into all of the details, the rule gives shareholders the ability to vote by proxy for their preferred combination of board candidates, similar to voting in person. It addresses longstanding concerns that shareholders voting by proxy were not able to vote for a mix of dissident and registrant nominees in an election contest, as they could if they voted in person.  And very few shareholders, even before COVID, attend annual meetings in person.

The SEC’s new rule on shareholder voting will go into effect on August 31, 2022. Photo credit: Roger Pondel

As Gary Gensler, chairman of the SEC, said in a press release late last year, “Today’s amendments will put (all) candidates on the same ballot. They will put investors voting in person and by proxy on equal footing. This is an important aspect of shareholder democracy.”

No one knows for sure what will happen, and maybe nothing, but major law firms around the nation, proxy advisors, the National Institute of Investor Relations, and others have been talking it up big time in articles, webinars and conference panels.

On one hand, many smart minds – including our friend and long-time proxy campaign strategist Keith Gottfried, who recently addressed a PondelWilkinson staff meeting – believe that because it will be easier and less costly to run election contests, this hotly debated issue will “change the playing field dramatically” and foster greater shareholder activism. Gottfried, who just launched Washington, D.C.-based Gottfried Shareholder Advisory LLC, a boutique strategic advisory firm focused on shareholder activism preparedness and defense, said companies in the $300 million to $1 billion+ market cap range could be particularly vulnerable.

On the other hand, there is the thought that the new rule will stimulate a seismic shift in how activism is carried out. Rather than causing tumult at the annual meeting, there could even be increased engagement between issuers and activists that may foster cooperation and settlements.  

Our overview advice is for corporate boards, CEOs and CFOs to be armed with information and get ahead of the matter now to eliminate a potential sting and be prepared so there will not be an issue later. Consider the following:

  • Take a fresh look at your shareholder activist preparedness and defenses in order to react quickly, sans panic, for potential increased shareholder activism. With the help of a professional, revisit advance notice bylaws, corporate disclosure policies regarding director elections and determine whether changes are needed
  • Keep an eye on your peers. If there’s increased activism there, it may be coming your way as well.
  • Don’t get complacent in thinking that because your larger shareholders may have been quiet, they are not paying attention to your company. Periodically reach out pro-actively to them for updates.
  • Deploy best communications practices day-to-day, including transparency on quarterly conference calls and in press releases.
  • Think about conducting a Reg FD refresher training session for your senior staff and board. Having such a session “on the record” is a healthy omen that the company is sensitive to this important governance matter. 
  • Consider providing shareholders with an in-depth look at your company by hosting an investor day that showcases the operating tier of management, not just the senior-most corporate staff.
  • Know what your shareholders are thinking, even to the extent of conducting a third-party perceptions survey. The shareholders will appreciate that you are having an objective party ask candid questions. As the issuer, you may learn a thing or two and ward off a problem you may not even know existed.
  • Pay close attention to ESG matters, which are top-of-mind these days throughout the investment community in both large and small companies.
  • Be mindful of board composition, including diversity, experience and tenure.
  • Be alert, listen and do not be afraid of “well-wishing” shareholders who like to give advice on corporate growth, valuation and other board and management matters. Embrace them and pay attention to what they are saying. Often their biggest demand is for a company’s sale, not necessarily to “fix” anything or for a board seat.

It’s not only in politics, where voting rights issues are surfacing. The SEC’s new universal proxy rule is something to at least start thinking about seriously. If nothing else, it should prompt action for companies to take an inner look and be certain that best governance and communications practices are fully in place.

Roger Pondel, rpondel@pondel.com

Disappearing Transparency: A Call to Action

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Back in July, the SEC proposed new 13-F rules, including amending the reporting threshold for investment managers to “reflect today’s equities markets.” At first blush, the headline seems okay. When one digs deeper (actually, you don’t need to dig deep at all), the proposed rules represent a huge step backwards to a time when issuers and the investing public had very little information about stock ownership.

Source: Securities and Exchange Commision

A little bit more about the SEC’s rationale before diving into the heart of the matter. According to its July 10 press release, the proposal would increase the 13-F reporting threshold from $100 million to $3.5 billion, “reflecting proportionally the same market value of U.S. equities that $100 million represented in 1975, the time of the statutory directive.” From everything I’ve read on the subject, this rationale is misguided and imprudent.

According to IHS Markit, approximately 600 of the 5,200 investment managers that filed a Form 13-F last quarter manage over $3.5 billion in equities. Put another way, almost 90 percent of investment managers that are currently required to report their holdings, would no longer be required to do so. Further, more than 90 percent of the dollar value of the securities currently reported is held by these 600 firms. IHS Markit also noted that, on average, 55 percent of the investors on an issuer’s shareholder list would stop filing 13-F’s, 69 percent of the hedge funds on an issuer’s shareholder list would stop filing 13-F’s, and “IR Immune investors,” including index funds, quants and brokers would stop filing for 2 percent of their share value, while active investors would stop filing for 10 percent of their share value. Not good for an industry that requires more visibility, not less.

The National Investor Relations Institute (NIRI), has aggressively taken up the cause, rallying issuers, IR counselors and other prominent business associations. Last week, NIRI sent a letter to the SEC opposing the proposed rule. 237 issuers with a combined market cap of almost $3 trillion, five high-profile business associations and 26 IR counseling firms signed on in support. Additionally, NIRI reports widespread opposition from retail investors and small investment managers, who, in total, have submitted more than 1,000 comments to the SEC.

It’s not too late to take action, even if you’ve already signed on to NIRI’s letter. The deadline for submitting comments directly to the SEC is September 29. You can visit NIRI’s Advocacy Call to Action page for more information and suggestions on how you can help.

The SEC’s proposal would significantly hamper issuers’ ability to understand who owns their stock, who is selling their stock and who is buying their stock. Imagine a scenario in which an activist is slowly building a position, but you can’t see it happening and you are blindsided by a takeover attempt. Imagine how difficult it would be to keep current holders updated if you don’t know who they are. Imagine the inefficiency of having no way to prioritize incoming phone calls and meeting requests because you are in the dark about ownership status.

Perhaps Jim Cramer said it best. “If you believe Wall Street is important, if you believe business is important, if you believe the market is important, then the public deserves to know who owns what.” Use your voice to let the SEC know that you strongly oppose the proposed rule.

Laurie Berman, lberman@pondel.com

Class Action Litigation on the Rise: How Safe are Safe Harbor Statements?

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History has a way of repeating itself. With 2017 statistics of all kinds starting to be compiled, one offered by the Stanford Securities Class Action Clearinghouse should make public company management teams and their boards take notice: the number of securities class-action lawsuits is on the rise … in a startling way.

 

The clearinghouse reported that the number of annoying and costly public company securities class action lawsuits increased to 413 in 2017, up from 213 in 2016, and up from an average of 190 in the years 2002 through 2015.                        

                                            

classaction_law

Law firm Wilson Sonsini Goodrich & Rosati recently issued a paper highlighting the trend, which can impact companies of all sizes, from micro- to mega-cap. The three biggest reasons for the suits are material misstatements or omissions in registration statements and prospectuses for IPOs; challenges to merger and acquisition transactions, many if not most of which defense lawyers say are boilerplate in nature and meritless; and greater scrutiny by the SEC to disclosures being made by private companies.

 

Disclosures, or lack thereof, in press releases, which are totally in management’s control, often play a role in such lawsuits. While most companies are careful about including safe harbor statements in their press releases, which offer some legal protection, many companies do not use those statements properly. Often, they fail to customize those paragraphs to include the actual forward-looking statements mentioned in the press release. Worse yet, sometimes the safe harbor paragraphs are being included as boilerplate, even when there are no forward-looking statements at all.

 

Remember the term, “You’ve been Lerached?” A couple of decades ago, class action securities lawsuits were rampant, with a San Diego-based law firm, long since shuttered its doors, leading the pack in filing them. The firm’s principal ultimately went to jail for fabricating many such suits, looking for plaintiffs to buy a few shares of a given company, allegedly based on a CEO’s statement about future performance, then at the first sign of non-performance, voila, the company was “Lerached,” with the term affectionately named after lawyer Bill Lerach. Copycats followed.

 

Many of those lawsuits were legit, and they ultimately gave birth to the Private Securities Litigation Reform Act of 1995 and the safe harbor statements in press releases, followed by Reg FD in 2002. But despite the safe harbor protection, a case involving guidance issued in a press release by Quality Systems last July may signal a frightening change: The U.S. Court of Appeals for the Ninth Circuit, which governs California, reversed the district court’s dismissal of a securities fraud suit, saying various aspects of the safe harbor were “hostile in tone and application, when compared to many prior forecasting decisions.”  

 

What does all this mean?  Maybe nothing, but today more than ever, it pays to listen carefully to your SEC lawyer and to your investor relations advisor on all corporate communications matters. It also may be a good idea to place close attention to those safe harbor statements, and be sure to stay tuned as to whether those statements turn out to be not so safe as hoped.

— Roger Pondel, rpondel@pondel.com

 

 

 

Let Your Voice Be Heard

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With little fanfare or media coverage, the U.S. Securities and Exchange Commission last week said that for the next 60 days it is seeking public comment on disclosure requirements relating to a host of management, security holders and corporate governance matters.

SEC Chair Mary Jo White is leading a charge to address outdated and redundant disclosure requirements for the benefit of the nearly half of all Americans, who in some form, own stock in publicly traded companies—from direct ownership of individual securities, to ownership through 401-K and pension plans, IRAs, mutual funds and ETFs.

As part of the SEC’s “Disclosure Effectiveness Initiative”, the Commission wants to be certain that information disclosed by public companies and relied upon by investors to buy, sell, or hold, is as clear, accurate and comprehensible as possible, conveyed in a manner that is timely, and delivered making best use of today’s technology.

Amendments being considered address outdated and redundant disclosure requirements, and providing investors with what they need to make informed decisions.

Granted, for most Americans, revamping public company disclosure practices may not be one of the most important issues facing the world today. But if you are reading this blogpost, you likely are reasonably close to the heart of this matter, so let your voice be heard. You have until the end of October to do so.

Roger Pondel, rpondel@pondel.com

SEC Enforces Insider Transaction Rules As Boards Authorize Buybacks at Brisk Pace

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1903 stock certificate of the Baltimore and Ohio Railroad (Photo credit: Wikipedia)

1903 stock certificate of the Baltimore and Ohio Railroad (Photo credit: Wikipedia

Insider buying or selling of shares is one of the most emotional and telltale communications messages a public company can send.

Last week, the SEC handed out charges against 28 officers, directors and major shareholders for violating federal securities laws requiring the prompt reporting of information about transactions in company stock.  In addition, six publicly traded companies were charged for contributing to filing failures by insiders or failing to report their insiders’ filing delinquencies.
 
Curiously, the SEC did not say whether or not those transactions were on the buy or sell side. But this is important stuff and a subject that many investors hold sacrosanct.
 
Some funds immediately sell if they see insiders are selling for anything other than “personal” reasons, such as sending a child to college. And other investors immediately buy when they see insiders buy, believing those insiders must know something positive about the future. The same usually holds true when companies initiate buyback programs.
 
A news release issued by the SEC September 10 said information about insider buying and selling gives investors an “opportunity to evaluate whether the holdings and transactions of company insiders could be indicative of the company’s future prospects.”
 
Granted, it is important to look at much more than insider transactions when evaluating a stock’s viability. But as Peter Lynch, who is still regarded as one of the greatest and smartest investors of all time, has said on numerous occasions: “Insiders may sell their shares for any number of reasons, but they buy for only one—they think the price will rise.”
 
So while it is not necessary in this blog to name names of those violators, as the SEC’s press release did (in case you want to know), 33 of the 34 individuals and companies cited agreed to settle the charges and pay financial penalties totaling $2.6 million.
 
“Using quantitative analytics, we identified individuals and companies with especially high rates of filing deficiencies, and we are bringing these actions together to send a clear message about the importance of these filing provisions,” said Andrew J. Ceresney, director of the SEC’s Division of Enforcement, in the news release.
 
There are usually no such communications issues when public company boards authorize buyback programs. Making a public announcement, usually via news release, is often one of the key reasons such programs are launched—to make a statement that one’s stock is undervalued and we’re not going to take it anymore.
 
In fact, according to an analysis by Barclays PLC as reported in the Wall Street Journal September 16, companies are buying back their own shares these days at the fastest pace since the financial meltdown, and companies with the largest buyback programs have outperformed the broader market by 20 percent.
 
Barclays’ head of U.S. equities strategy, Jonathan Glionna, as reported in the same article, said that among the reasons why companies do stock buybacks, “one is that it seems to work; it makes stocks go up.”

– Roger Pondel, rpondel@pondel.com

 

What Public Company Directors Should Know in 2014

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Being a public company director today is exponentially different than it was just a decade ago.  Rules and regulation changes and increasing investor activism make navigating corporate governance duties more challenging and time consuming.

As the New Year approaches, law firm Akin Gump provides a list of 10 topics that will be important for directors in 2014.  For current directors, or those seeking board positions, and for corporate officers who directly interact with the board, it’s a good summary of what to be prepared for.  Below are a few of the more noteworthy topics:

    • Address Cyber Security.  Akin Gump cites a recent study by the Ponemon Institute, which found that “in the past year the number of successful cyber attacks on companies surveyed jumped 42 percent compared to the prior year.”  According to CFO Magazine, companies need to better understand the risks posed by cyber attacks including potential lawsuits, reputation damage and customer losses, as well as growing regulatory scrutiny over the adequacy of data-security measures.  Actions have been brought against more than 40 companies by the FTC for data breaches (saying that “failures to prevent unauthorized access to consumers’ information constitute unfair or deceptive acts.”)
    •  Set Appropriate Executive Compensation.  While some think say-on-pay will remain a hot button issue, others, like CNBC senior editor, John Carney, believe that say-on-pay failed with 97 percent of U.S. companies receiving shareholder votes supporting their executive pay packages through the first half of 2013, according to Equilar.  Even so, it’s apparent that shareholders and proxy advisory firms are continuing to focus on pay-for-performance, while investor activists are targeting disparity between pay for executives and other employees.  In fact, the SEC recently proposed a new rule that would require publicly traded companies to disclose the ratio of its CEO’s pay to the median compensation of its employees.
    • Determine Whether the CEO and Board Chair Positions Should be Separated.  CFO Magazine reports that during the 2013 proxy season, requests for an independent board chair were the second-most-frequent shareholder proposals submitted to companies.  According to the 2013 Spencer Stuart Board Index, 45 percent of S&P 500 companies split the CEO and chairman roles, up from 23 percent 10 years ago.
  • Cultivate Shareholder Relations.  Activist investors are here to stay.  Akin Gump says that proxy fight announcements are now at their highest level in four years. Even large pension funds are getting in the act. By knowing and actively engaging shareholders, directors can develop stronger relationships and management credibility, both of which come in handy when facing a potential proxy battle.  Equally important, and the main tenet of any good investor relations program, is keeping your message consistent.  Whether speaking with an activist, a friendly long-term investor or a mom and pop shareholder, the message should be the same.  It’s also important to determine how involved directors should be in the shareholder communications process. This is a company-by-company decision with current viewpoints varying widely.

The public company director position can be very rewarding by helping shape a business’s future, but it’s definitely not an easy task.  Regulatory bodies, proxy advisory firms and the investment community are keeping a sharp eye on what’s happening in the boardroom, so these directors must stay on top of the issues that matter most to shareholders.

— Laurie Berman, lberman@pondel.com

Rudyard Kipling and the SEC

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Rudyard Kipling.jpg

Logging on to the Securities and Exchange Commission’s website this week to check on a client’s filing, I took a brief detour to peruse other parts of the site.
 
You wouldn’t know by looking at the home page or by clicking on the news section that the market was gyrating and  people were panicked.  In fact, it seemed like business as usual.  And maybe that’s a good thing.
 
I looked at the bios of the five commissioners, including chair Mary Schapiro. They all have impressive backgrounds, but interestingly enough, none ever worked in a publicly traded company.  Hmmm.
 
Last Friday, the day investors were recovering from the previous day’s  512-point stock market drop, the SEC issued a press release announcing that Commissioner Kathleen L. Casey was stepping down, having completed her five-year term.  No mention of the market’s volatility. Other SEC news that day included the Commission’s insider trading charge against a public company board member and his son. Baseball great Doug DeCinces got the same kind of charge the day before.  That was really a bad day for Doug.
 
Again this  week, with unprecedented market gyrations, four unrelated SEC news releases have been issued:  an announcement of a meeting in China regarding audit oversight cooperation; broker fraud involving the sale of investments to a school district in the mid-west; insider trading prior to a Disney deal; and today’s announcement of a new whistleblowerprogram.
 
By the way, press releases aside, there’s other interesting information on the SEC’s website, from special studies, interesting complaints and even job postings.
 
The SEC has been around since 1934, formed during the peak years of the Great Depression, just after passage of the Securities Act of 1933 and the Securities Exchange Act of 1934–both of which were designed to restore investor confidence in our capital markets by providing investors and the markets with more reliable information and “clear rules of honest dealing.”
 
The Commission’s stated mission is “to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation.”
 
The website states that “As more and more first-time investors turn to the markets to help secure their futures, pay for homes and send their children to college, our investor protection mission is more compelling than ever.”
 
The SEC’s steady, business-as-usual approach to news is refreshing and symbolic of Rudyard Kipling’s famous poem, “If,” which reminds us all to keep our heads while others are losing theirs.

 

— Roger Pondel, rpondel@pondel.com