1. Former CFO Sues Walgreens for Defamation Over Earnings Forecast Error

In this Chicago Tribune article, it’s reported that a former Walgreens CFO has sued the company for blaming him for an earnings forecast error – a $1 billion error for which he was terminated.

  1. Six Federal Agencies Jointly Approve Final Risk Retention Rule

On October 22, 2014, six federal agencies approved a final rule requiring sponsors of securitization transactions to retain risk in those transactions. The final rule implements the risk retention requirements in the Dodd-Frank Wall Street Reform and Consumer Protection Act.  A copy of the final rule can be accessed here.

  1. SEC Approves PCAOB’s Related Party Transaction Changes

On October 21, 2014, the SEC issued an order approving the Public Company Accounting Oversight Board’s (“PCAOB”) new related-party transaction standards. Notably, the SEC retained the PCAOB’s proposed effective date – so the new standards will become effective for audits for fiscal years beginning on and after December 15, 2014.

  1. SEC Statistics

On October 16, 2014, the SEC released the statistics for the activities of its Enforcement Division for the agency’s 2014 fiscal year, noting a “record” number of enforcement actions in 2014 involving a “wide range of misconduct” and including a “number of first-ever cases.” An analysis of the information released by the SEC that was produced by Kevin LaCroix at RT ProExec can be found here.

  1. SEC Staff Goes After “Unregistered Securities” Brokers

The Division of Trading & Markets issued this set of FAQs – and OCIE issued this Risk Alert – to remind brokers of their obligations when they sell unregistered securities on behalf of clients, such as when founders and employees sell their initial stakes in companies that have gone public or when investors sell securities in public companies that were acquired in private placements. This twin sets of Staff guidance was accompanied by the announcement of an enforcement action against E*Trade for improperly selling billions of shares of penny stocks through such unregistered offerings. Stan Keller notes that while this doesn’t deal with lawyers and no registration opinions, including resales, the guidance has relevance for lawyers.

  1. SEC and FINRA Warn Investors About Penny Stock Scams Hyping Dormant Shell Companies

On October 30, 2014, The SEC’s Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) issued an alert warning investors that some penny stocks being aggressively promoted as great investment opportunities may in fact be stocks of dormant shell companies with little to no business operations. A copy of the press release can be found here.