Posts in SEC Enforcement
SEC Set to Update Proxy Voting Regulations After Fall Roundtable

The Securities and Exchange Commission (SEC) held a roundtable on November 15 to discuss whether the SEC’s current proxy voting rules and procedures should be updated. (Chairman Jay Clayton, SEC Announcement). According to the announcement, the evidence and testimony presented at the roundtable will aid SEC staffers in making their recommendations about what changes should be made. (Andrew Ramonas, Bloomberg Law). The roundtable is scheduled to discuss several topics, including the voting process, retail shareholder participation, shareholder proposals, proxy advisory firms, technology and innovation, and other actions. (Chairman Jay Clayton, SEC Announcement).

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SEC v. Catlin Cade, IV

In SEC v. Cade, No. 2:18-cv-01323-JEO (N.D. Ala. Aug. 17, 2018), the SEC filed an initial complaint against Catlin Cade (“defendant”) alleging a violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and SEC Rule 10b-5 by trading shares of Golden Enterprises, Inc. (“Golden”) on the basis of material nonpublic information.

According to the allegations, a director of Golden learned of nonpublic information pertaining to a contemplated merger between Golden and a second company. The director separately owned and controlled a different privately held company (“Director’s Company”)

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SEC Regulators Are Targeting Cryptocurrency Broker-Dealers

 As cryptocurrency and blockchainbecome more prominent in today’s financial markets, regulators around the worldare coping with how to maintain transparency and legitimacy in the market. Recently, the Securities and Exchange Commission (SEC) and its new cyber unit began requesting specific information about cryptocurrency brokerage and Initial Coin Offerings(ICO’s) for enforcement purposes. (Josephine Wolff, Slate; Benjamin Bain, Bloomberg). The results of the requests remain unclear, but the probe for information sheds light on the SEC’s suspicion of misconduct.  

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SEC Investigation of Elon Musk

On August 7, Elon Musk made an abrupt announcement regarding his plan to take Tesla private. Mr. Musk claimed that this Twitter announcement came after he had “secured” funding from the Saudi Arabian sovereign wealth fund. (Ben Bain and Matt Robinson, Bloomberg). After the announcement, Tesla’s shares rose in value to over $381 per share, from $342 (the closing price on August 6). (Mark Matousek, Business Insider). Nevertheless, the share price dropped dramatically over the next few weeks to as low as $263 on September 7.

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SEC Adopts Amendments to Rule 15c2–12 to Improve Transparency of Municipal Securities Disclosures

Earlier this year, the Securities and Exchange Commission (SEC) amended Rule 15c2–12 (17 C.F.R. § 240.15c2–12). Rule 15c2-12 ensures that underwriters secure an agreement with states, cities, and other governmental entities issuing municipal securities that those entities will disclose information about the issued securities to the Municipal Securities Rulemaking Board (MSRB) on an ongoing basis. This information is intended to inform interested parties on the financial standing or other condition of the state government that may have an effect on the bonds.

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