Recent Insider Trading Case Highlights Value of Rule 10b5-1 Trading Plans

A recent insider trading case highlights the value of Rule 10b5-1 trading plans for corporate insiders. In Harrington v. Tetraphase Pharmaceuticals Inc. et al (D. Mass. May 9, 2017), the defendant directors and officers were accused of trading in the company’s stock while knowing that a key drug the company was testing would fail, long before that information was released to the public and the stock price dropped by 80 percent.

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Virtual Shareholder Meetings Rising in Popularity, Skeptics Remain

Approximately 200 virtual shareholder meetings were held in the past year, of which more than 80 percent were virtual-only meetings, according to Broadridge Financial. Earlier this year, an article in the Star Tribune surveyed the history, rising popularity and pros and cons of virtual shareholder meetings.

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Major Investors, Indexes Not Pleased with Non-Voting Shares

According to the Council of Institutional Investors (CII), the growing practice of start-up companies opting for dual-class or multi-class share structures with unequal voting rights represents “a full-scale repudiation of the ‘one share, one vote’ principle that is core to good corporate governance.”

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Attention CEOs and CFOs: Ensure Disclosures are Adequate or Personally Suffer the Consequences

The SEC recently announced that the former CEO and the former CFO of UTi Worldwide, Inc., a multinational freight forwarding and logistics company, have each agreed to pay civil penalties of $40,000 and to cease-and-desist from future violations of the federal securities laws in order to settle charges stemming from UTi’s failure to adequately disclose serious risks to the company’s liquidity and capital resources in its Form 10-Q for the quarter ending October 31, 2013.

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Are Robots Reading Your 10-K? What to Know About the SEC’s Smart Automation

Like the companies it oversees, the SEC is embracing new technologies to accomplish its goals. In a speech at the 19th Annual Operational Risk North America Conference on June 21, Scott W. Bauguess, Acting Director and Acting Chief Economist of the SEC’s Division of Economic and Risk Analysis, explained some of the advanced techniques the SEC is using to detect fraud.

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Shareholder Group Pushes Back Against the Financial Choice Act of 2017

A recent letter to House Speaker Paul Ryan from Jeff Mahoney, general counsel, Council of Institutional Investors (CII), lists five provisions in the Financial Choice Act of 2017 that have “deeply troubled” the letter’s 54 signatories, representing nearly half of the CII’s membership.

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The Ticker shares recent developments in SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors.  It is published by Fredrikson & Byron’s Public Companies Group.