1) SEC Grants Second Bad Actor Waiver with Conditions
On January 27th, the Securites and Exchange Commission granted Oppenheimer a bad actor waiver under Rule 506(d). The Commission’s order says “Oppenheimer will comply with the conditions stated in its December 10, 2014 waiver request letter, including that it will retain a law firm to review its policies and procedures relating to Rule 506 offerings, and that it will adopt improvements or changes, both as private placement agent in its investment banking business and as issuer and as compensated solicitor in its wealth management business. Oppenheimer’s waiver is also conditioned upon its completing firm wide training for all registered persons on compliance with Rule 506 of Regulation D.”
2) Corp Fin Issues New CDI of Regulation S-T (Addressing Non-Searchable Graphics or Images in Filings)
New CDI 118.01 of Regulation S-T addresses whether a filing can ever contain graphics or images that include non-searchable information. The answer generally is yes, if the filer also presents the same information as searchable text or in a searchable table within the filing.
3) Corp Fin Issues New CDI of Regulation S
New CDI 279.01 addresses whether restricted securities acquired in a Rule 144 transaction (other than Rule 144(a)(3)(v)) from an issuer that was a foreign private issuer at the time of the acquisition (but is now a domestic issuer) may be resold in an offshore transaction under Rule 904 without regard Rule 905. The answer is, Yes. Rule 905 only applies to equity securities that, at the time of issuance, were those of a domestic issuer.
4) Corp Fin Issues No-Action Response for Abbreviated Tender or Exchange Offer Periods for Non-Convertible Debt Securities
The Staff granted a no-action letter whereby it agreed to not recommend enforcement actions when debt tender offers meeting certain guidelines is held open for as short as 5 business days.
5) SEC Announces Charges Against Standard & Poor’s for Fraudulent Ratings Misconduct
The Commission announced a series of federal securities law violations by Standard & Poor’s Ratings Services involving fraudulent misconduct in its ratings of certain commercial mortgage-backed securities (CMBS).
6) Failure to Make Reg S-K Item 303 Disclosure Can Lead to Section 10(b) Claim
On January 12th, the U.S. Court of Appeals for the Second Circuit ruled, in Stratte-McClure v. Morgan Stanley, that a failure to make a disclosure required by Item 303 of Reg. S-K is an omission that can serve as a basis for a Section 10(b) securities fraud claim, but only if the other requirements to state a Section 10(b) claim – such as materiality and scienter – have been met.
7) Updated Financial Reporting Manual to Make Accounting Standards Update No. 2014-17 Conforming Changes
On January 12th, the Division of Corporation Finance indicated that it recently updated its Financial Reporting Manual to conform it to the issuance of Accounting Standards Update No. 2014-17, Business Combinations (Topic 805): Pushdown Accounting, a consensus of the FASB Emerging Issues Task Force and rescission of SAB Topic 5.J.