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On November 14, the Securities and Exchange Commission (“SEC”) published its 2023 annual enforcement report which revealed a continuation of 2022’s record-setting enforcement activity.
Evaluating a broad spectrum of challenges raised by the U.S. Chamber of Commerce and others, a unanimous panel of the U.S. Court of Appeals for the Fifth Circuit recently held that the SEC failed to provide a sufficient rationale to justify its Share Repurchase Disclosure Modernization Rule (the “Final Rules”), rendering the Final Rules arbitrary and capricious.
It is one of the hardest questions a company can face: after discovering criminal conduct inside your company, do you self-report to the government or not?
The Securities and Exchange Commission (“SEC”) will soon have the tools necessary to enforce its longstanding rules regarding share repurchases.
Recent technological advances, including cryptocurrency and artificial intelligence (“AI”), have made their stamp on the Securities and Exchange Commission (“SEC”) and its goals.
On February 22, 2023, the Securities and Exchange Commission (“SEC”) issued a cease-and-desist order (the “Order”) charging African Gold Acquisition Corp. (“African Gold”) with multiple violations of the Securities Exchange Act of 1934 (the “Exchange Act”) related to African Gold’s failure to maintain a sufficient system of internal controls.1
On February 7, 2023, the Securities and Exchange Commission’s Division of Examination (the “Division”) announced its 2023 examination priorities to “provide insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets.”
On January 13, 2023, the Supreme Court granted certiorari in two consolidated cases from the Seventh Circuit to consider whether a defendant relying on an objectively reasonable interpretation of an ambiguous law acts “knowingly” in violation of the False Claims Act (“FCA”).
On February 3, 2023, the SEC announced that Activision Blizzard Inc. — the publicly traded video game developer and publisher of such well-known videogames as “Candy Crush” and “World of Warcraft” — “agreed to pay $35 million to settle charges that it failed to maintain disclosure controls and procedures to ensure that the company could assess whether its disclosures pertaining to its workforce were adequate” and “violated an SEC whistleblower protection rule” by impeding employees “from communicating directly with the Commission staff about a possible securities law violation.”
V&E SEC Update
In an apparent response to a downturn in corporate cases and criticism that its harsh rhetoric was chilling corporate cooperation, the Department of Justice (“DOJ”) recently announced significant changes to its policy on corporate enforcement aimed at sweetening the deal for companies under criminal investigation.
On January 9, 2023, the Securities and Exchange Commission (“SEC”) issued a cease-and-desist order (the “Order”) charging McDonald’s Corporation (“McDonald’s”) and its ex-CEO, Stephen Easterbrook, with multiple disclosure violations related to Easterbrook’s departure from McDonald’s following his inappropriate relationships with McDonald’s employees.