Posts in Corporate Governance
SEC Adopts Obama-Era Mining Disclosures

On October 31, 2018 the SEC adopted new mining disclosure requirements that were originally proposed under the Obama Administration. (Andrew Ramonas, Bloomberg Law). According to an agency press release, the amendments, which modify both the Securities Act of 1933 (Securities Act) and the Securities Exchange Act of 1934 (Exchange Act), will “provide investors with a more comprehensive understanding of a registrant’s mining properties, which should help them make more informed investment decisions.” (SEC, Press Release). The new rules eliminate and update Industry Guide 7, the current set of rules that have been called “woefully out of date.” (Anderson, Brenkert, and Doerksen, Dorsey & Whitney LLP).

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Ethics and Compliance Committees of Corporate Boards

Corporate boards face increasing compliance responsibilities and must consider how best to handle those responsibilities. There are various sources of the increasing burdens and pressures being placed on corporate boards. Among them are the traditional legal duties of due care, good faith, and loyalty placed on directors, with possibly severe consequences if directors fail to fulfill those duties. Included in the duty of care is the especially challenging duty of establishing and monitoring internal controls, the so-called Caremark duty, which lies at the heart of fulfilling the board’s compliance responsibilities.

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What is the PCAOB and What Does it Do?

The Public Company Accounting Oversight Board (PCAOB) is a nonprofit entity that was created with the passage of the Sarbanes-Oxley Act of 2002 and established by Congress to oversee the audits of public companies with the goal of protecting investors and the public's interest by promoting accurate and independent audit reports (About the PCAOB). In addition to its oversight of public company audits, the PCAOB also oversees the audits of brokers and dealers (About the PCAOB). Much like the Securities and Exchange Commission (SEC), the PCAOB's mission is to protect investors.

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Dietz v. Cypress Semiconductor Corp.: Plaintiff Not Protected Under Sarbanes-Oxley

In Dietz v. Cypress Semiconductor Corp., No. 16-1209 & 16-1249, 2017 BL 370853 (10th Cir. Oct. 17, 2017), the United States Court of Appeals for the Tenth Circuit vacated the district court’s judgment in favor of Timothy Dietz (“Plaintiff”) under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). The court found Plaintiff did not reasonably believe his former employer, Cypress Semiconductor Corporation (“Defendant”), committed mail fraud or wire fraud, therefore his whistleblower complaint was not protected activity under Sarbanes-Oxley. Accordingly, the court granted Defendant’s petitions for review, vacated the Administrative Review Board’s (the “Board”) awards for Plaintiff, and vacated as moot the district court’s order enforcing those awards.

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