1. The SEC filed an initial brief, available here, in the lawsuit challenging its conflict mineral rules. Recall that the rules are effective now; the first conflict minerals report covering 2013 will be filed in 2014. The lawsuit claims, among other things, that the SEC failed to adequately assess the costs and benefits of the rule. In its brief, the SEC claims (and we're paraphrasing here) that, because Congress required it to adopt a rule with unquantifiable and uncertain social benefits, its hands were tied and it did the best it could. Oral arguments are scheduled for May.
  2. The Stop Trading on Congressional Knowledge (STOCK) Act required a GAO report on the role of political intelligence in financial markets, which was recently published here. "Political intelligence" is information from a political source and not a reference to the intelligence of the political class. Which certainly makes this report less slapstick. A summary of the GAO's conclusion: "Beats me."
  3. And speaking of cutesy acronymic laws, the Jumpstart Our Business Startups (JOBS) Act turned one year old on April 5. A few retrospectives, largely confirming that the law has been disappointing, are here, here, here and here. Although many lament that crowdfunding rules remain in limbo, we continue to believe crowdfunding won't be meaningful and that the only interesting result of the JOBS Act may be the rules allowing general solicitations for Regulation D and 144A offerings and proposed "Regulation A+"—each still pending with no firm word on timing.
  4. Related to startups, but unrelated to the JOBS Act, the SEC issued a no-action letter to the FundersClub Inc., here, saying the FundersClub need not register as a broker-dealer if it sets up a website where its members, all accredited investors, can participate in Rule 506 offerings. FundersClub would make money by negotiating the terms of investments in a startup if enough members are interested. Brief commentary about the development is here.
  5. The SEC announced, here, that it will not seek an enforcement action against the CEO of Netflix for violating Regulation FD by posting on his personal Facebook account that Netflix streamed 1 billion hours of content in June 2012. The SEC's press release about its decision not to act is here, and commentary on the development is here. Some revel in the stodgy SEC's recognition that disclosure through social media can be Regulation FD compliant, at least if you tell investors that’s what you're doing, and eagerly await the day the SEC allows them to draft an IPO prospectus in 140 characters or less ("We sell things and make money. Usually. Investing is risky. Don't cry if you lose your shirt.") . Others lament that recognition of tweets and Facebook posts as adequate public communication is a sure sign our society is doomed. Whatever your view, note that the SEC report suggested the Netflix CEO almost certainly violated Regulation FD. So before you tweet or post, consider whether your insatiable need for attention should trump thoughtful communications about your company.
  6. The law firm with, we're told, more say-on-pay plaintiff lawsuits under its belt than any other, posted a piece on "emerging trends on Say-on-Pay disclosure" and a defense of its suits (attacked "with a complete lack of context," according to the firm), here. Meanwhile, the U.S. District Court in Delaware affirmed that negative say-on-pay votes are not sufficient to attack a board's executive compensation decisions, here, and the U.S. District Court in Northern Illinois dismissed a say-on-pay suit condemned as "painting a derivative claim with a disclosure coating," here. These decisions suggest to some, see here, that these suits are almost dead.
  7. Finally, in accounting news:
    • The PCAOB proposed reorganization of audit standards is here.
    • FASB issued its fifth XBRL implementation guide, each of which addresses a specific financial metric, here.