1. SEC Launches Section 16 and Schedule 13D Enforcement Initiative

In early September, the SEC announced charges against 28 officers, directors, or major shareholders for violating federal securities laws requiring them to promptly report information about their holdings and transactions in company stock (Section 16(a) reports and Schedules 13D and 13G). Six publicly-traded companies were charged for contributing to filing failures by insiders or failing to report their insiders’ filing delinquencies. Those companies settled allegations that they failed to disclose their insiders’ Section 16(a) violations as required by Item 405 of Regulation S-K.

  1. World’s Leading Institutional Investors Managing $24 Trillion Call for Carbon Pricing, Ambitious Global Climate Deal

Prior to the recent Climate Summit at the United Nations to spur climate action and facilitate a global climate agreement in 2015, nearly 350 global institutional investors representing over $24 trillion in assets issued a statement calling on government leaders to provide stable, reliable and economically meaningful carbon pricing that helps redirect investment commensurate with the scale of the climate change challenge, as well as develop plans to phase out subsidies for fossil fuels.

  1. SEC Grants Bad Actor Waivers to Citigroup

The SEC granted Citigroup waivers from restrictions that would have restricted a range of the bank’s activities, including selling investments in hedge funds to individuals, following a recent securities-fraud settlement. In August, the SEC completed a $285 million settlement with Citigroup over the sale of certain collateralized debt obligations to clients in late 2006 and early 2007. Under the SEC’s bad actor rule, parties with a “a relevant criminal conviction, regulatory or court order, or other disqualifying event” are restricted from participating in a private offering. The rule, adopted last year, is part of the 2010 Dodd-Frank regulatory changes.

Citigroup told clients in August it was working with the SEC to resolve the restrictions over the bank’s sale of hedge funds. The SEC granted Citigroup its request for a waiver to resume selling so-called private fund investments, accepting the bank’s arguments that its $285 million settlement didn’t involve intentional misconduct or a large number of employees. The SEC grants waivers to let firms conduct normal business, as long as the waiver is seen as being in the public’s interest. The SEC also allowed Citigroup to retain its “WSKI” status, removing a restriction that applied to the bank given the SEC’s finding that Citigroup violated antifraud provisions of U.S. securities laws. Firms found to have violated those laws typically have their status revoked for three years but are granted the option of appealing the decision.

The waivers can be found here and here.

  1. Council of Institutional Investors Wants Proxy Disclosure of Board Evaluation Process

In its report, “Best Disclosure: Board Evaluation,” surveyed CII members said they value detailed disclosure of the board evaluation process when deciding on director elections. CII makes clear that investors do not expect information about the results of the actual evaluations, but believe that the process discussion “…is an indication that a board is willing to think critically about its own performance on a regular basis and tackle any weaknesses.”

  1. SEC Announces Largest-Ever Whistleblower Award

On September 22nd, the SEC announced an expected award of more than $30 million to a whistleblower who provided key original information that led to a successful SEC enforcement action. The award will be the largest made by the SEC’s whistleblower program to date and the fourth award to a whistleblower living in a foreign country, demonstrating the program’s international reach.