Blog

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Federal Securities Law Source is published by Porter Wright’s Corporate and Securities Practice Group. The blog is devoted to highlighting current issues in securities laws, discussing the ramifications of those issues for today’s businesses and providing bottom-line takeaways for busy owners, managers and executives. We designed this blog so readers can quickly and easily learn about developments affecting investors, issuers, securities markets and governing organizations.

Recent Blog Posts

  • SEC’s updated guidance on changing the date, time or location of annual shareholders’ meeting By Brian Dunlay and Matthew Navarre    On March 13, 2020, in response to the recent outbreak of the coronavirus disease (COVID-19), the Securities and Exchange Commission released guidance providing regulatory flexibility to reporting companies seeking to change the date, time, or location of annual shareholder meetings and use new technologies, such as “virtual” shareholder meetings, that avoid the need for in-person meetings. Given the public health and safety concerns related to COVID-19, the Commission provided guidance for reporting companies on how... More
  • Coronavirus and securities compliance related considerations By Brian Dunlay and Matthew Navarre    On March 4, 2020, the Securities and Exchange Commission issued an Order granting conditional relief from certain filing obligations under the federal securities laws for reporting companies whose compliance may be delayed by the coronavirus disease (COVID-19). In the press release accompanying this unprecedented Order, SEC Chairman Jay Clayton noted, “The health and safety of all participants in our markets is of paramount importance. While timely public filing of Exchange Act reports is a cornerstone... More
  • Recent IRS guidance affects corporate tax deductibility of public company executive compensation arrangements and related proxy statement disclosures By Greg Daugherty and Dave Tumen    Publicly traded companies have long been concerned with Internal Revenue Code Section 162(m) in order to maximize the deductibility of compensation paid to certain covered officers. Last year’s tax reform act made significant changes to Code Section 162(m). The IRS also recently published a Notice that explained some of these changes in more detail. To address these issues, public companies may need to review their administrative practices, particularly how they keep track of their covered... More
  • Virtual shareholder meetings: advantages, disadvantages and practical considerations By Nathan Sisodia    As spring approaches, so do annual shareholder meetings for many public companies. Traditionally, these meetings were held in-person. However, due to fairly recent advances in technology, companies now have the option to hold these meetings exclusively online or by providing for online participation, which both offer advantages and disadvantages to shareholders and company leaders. Furthermore, not all state corporate statutes permit a virtual component, and those that do may impose specific requirements. With an increasing amount of public... More
  • How to avoid registration under the Investment Company Act of 1940 By Porter Wright    One of the worse situations a company may face to be determined to be an investment company under the Investment Company Act of 1940, as amended (the act). If determined to be an investment company, the company is subject to the full regulation under the act. In addition, a company may inadvertently become an investment company; in such a case, all of its contracts are potentially voidable and it cannot engage in any other business. Generally, companies inadvertently... More
  • SEC seeks to regulate transactions utilizing cryptocurrencies under federal securities laws By Nathan Sisodia    Any person who regularly monitors the U.S. financial markets has likely noticed the recent emergence of digital currency, also referred to as “cryptocurrency,” in recent months. For example, the price of bitcoin, the most widely known form of cryptocurrency, surged from a price below $800 per bitcoin in 2016, to a remarkable $17,000 per bitcoin recently in 2017. Despite this potential volatility, the acceptance of cryptocurrencies as legitimate forms of currency is likely; as evidenced by an array... More
  • How to structure a joint venture By Porter Wright    Joint ventures should be considered as an alternative to an acquisition if the acquiring party feels it does not have the experience or the business risk appetite to do it individually. They have the benefit of allowing parties to have greater success working together on a specific project than if they did it themselves. Benefits of a joint venture There are many benefits of entering into a joint venture. Some of them include: Allowing the parties to share management experience and... More
  • Boilerplate provisions in a contract By Porter Wright    The term “boilerplate” refers to standardized language in a contract that usually appears at the end of the agreement (often in a section titled “miscellaneous” or “general terms”). While boilerplate provisions are common clauses in a contract, they should always be checked carefully and tailored to the particulars of the situation as they will address important issues that will be determinative of the parties’ rights with respect to the business contract. You should remember that every clause in... More
  • Methods to minimize indemnification obligations By Porter Wright    Because most indemnification claims are made by a buyer, the seller seeks to limit its indemnification obligations. Some ways in which the indemnification obligations can be limited include: Materiality of breach or claim amount Caps on indemnification Baskets Payment adjustments for insurance proceeds or tax benefits Sellers often like to include materiality qualifiers in the indemnification clause as to the claim amount and the type of claim. These qualifiers serve the purpose of limiting the right of the buyer to indemnification. In the... More
  • Litigation provisions v. arbitration provisions in business contracts By Porter Wright    Arbitration is an increasingly popular method of resolving disputes, but drafters of business contracts need to be aware that arbitration may not be suitable for every dispute. The question of whether or not to arbitrate often comes down to when you want to decide arbitration is right – before or after a dispute. Many people decide to include an arbitration clause during the negotiation of the business contract. The parties may decide to include an arbitration clause in their... More