Compendium

Securities Regulation and M&A Practice

39 min read

Securities Regulation and M&A Practice

United States securities regulation rests on a 1933-1940 statutory foundation, layered with depression-era trust busting, post-war institutional growth, Sarbanes-Oxley (2002) response to Enron, and Dodd-Frank (2010) response to the financial crisis. Mergers and acquisitions practice combines Delaware corporate law, federal securities law (in particular Section 14 proxy and tender offer rules), antitrust review under Hart-Scott-Rodino, and the law of fiduciary duty for boards considering sale. Both fields are practiced by the same small set of elite law firms and investment banks and are inseparable in the deal-making lifecycle.

Federal Securities Law Framework

The Foundational Statutes

  • Securities Act of 1933 (“truth in securities”): governs the primary market. Section 5 prohibits unregistered offers and sales absent exemption. Section 11 imposes strict liability on issuers and several other classes for material misstatements in registration statements; Section 12(a)(2) imposes near-strict liability for prospectus misstatements; Section 17 is the antifraud provision.
  • Securities Exchange Act of 1934: created the SEC and governs the secondary market. Section 10(b) and Rule 10b-5 (anti-fraud) are the most-litigated provisions in securities law. Section 13(a) governs periodic reporting; Section 13(d) and 13(g) governs five percent beneficial ownership reporting; Section 14(a) governs proxy solicitations; Section 14(d)-(e) governs tender offers; Section 16 governs insider trading reporting and short-swing profits.
  • Trust Indenture Act of 1939: governs the form of indentures for publicly-issued debt.
  • Investment Company Act of 1940: governs mutual funds, closed-end funds, and exchange-traded funds, including limits on leverage, custody of assets, and affiliated transactions.
  • Investment Advisers Act of 1940: federal registration for advisers with USD 110 million or more in regulatory assets under management (state registration below).
  • Sarbanes-Oxley Act of 2002: Section 302 CEO/CFO certifications, Section 404 internal control over financial reporting attestation, creation of the Public Company Accounting Oversight Board (PCAOB).
  • Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010: Volcker Rule (Section 619 limiting bank proprietary trading), creation of the Consumer Financial Protection Bureau, Title VII derivatives regulation, designation of systemically important financial institutions (SIFIs), Whistleblower bounty program.
  • JOBS Act of 2012: created the emerging growth company status, Regulation A+ (mini-IPO up to USD 75 million), and Regulation Crowdfunding (Title III, raised to USD 5 million cap by SEC in 2021).

SEC Structure

Five commissioners (no more than three from one party) confirmed by the Senate; SEC chair appointed by the President. Recent chairs: Mary Schapiro (2009-2012), Elisse Walter (2012-2013), Mary Jo White (2013-2017), Jay Clayton (2017-2021), Gary Gensler (2021-2025), Paul Atkins (2025-).

Divisions:

  • Corporation Finance (Corp Fin): reviews registration statements and periodic filings.
  • Trading and Markets: regulates exchanges, broker-dealers, and clearing agencies.
  • Investment Management (IM): regulates investment companies and advisers.
  • Examinations: examines registrants for compliance.
  • Enforcement (the largest division): investigates and brings actions.
  • Economic and Risk Analysis (DERA): the SEC’s economic analysis arm.

Self-regulatory organizations: FINRA (broker-dealers), MSRB (municipal securities dealers), the NYSE, Nasdaq, Cboe, the PCAOB (accounting firms auditing public companies), and the NFA (futures).

Key SEC Rules and Doctrines

  • Rule 10b-5 (1942) is the most important: prohibits fraud in connection with the purchase or sale of any security. A private right of action was recognized by the Second Circuit in Birnbaum v Newport Steel (1952) and by the Supreme Court in Blue Chip Stamps v Manor Drug Stores (1975) with the purchaser-seller standing requirement. Scienter is required (Ernst and Ernst v Hochfelder 1976). Materiality follows TSC Industries v Northway (1976). Loss causation must be pled with specificity post-Dura Pharmaceuticals v Broudo (2005).
  • Regulation D: Rule 506(b) permits unlimited offering to accredited investors and up to 35 non-accredited investors; Rule 506(c) permits general solicitation if all purchasers are verified accredited. Reg D 506 is the dominant exemption for private equity, venture capital, and private placements, with over USD 4 trillion raised annually.
  • Rule 144: provides safe harbor for resale of restricted securities. Six-month holding period for reporting issuers (one year for non-reporting), volume limits and notice requirements for affiliates.
  • Regulation S: offshore offering exemption.
  • Regulation A and A+: Tier 1 (up to USD 20 million per twelve months) and Tier 2 (up to USD 75 million per twelve months) mini-IPOs.
  • Regulation Crowdfunding (CF): Title III crowdfunding through portals like Wefunder, Republic, and StartEngine.
  • Regulation ATS: alternative trading systems including dark pools.
  • Regulation NMS (2005): the National Market System rule requiring trade-through protection.
  • Regulation SHO: short selling, with Rule 201 (Alternative Uptick Rule, in effect since 2010) restricting short sales after a 10 percent intraday decline.
  • Rule 13d beneficial ownership: holders of more than 5 percent must file within 10 days (shortened to 5 days for 13D and accelerated 13G amendments by the SEC’s October 2023 amendments). Schedule 13D is for active investors; 13G for passive (qualified institutional investors, passive investors).
  • Section 16: insiders (officers, directors, 10 percent holders) file Form 3 on becoming an insider, Form 4 within two business days of changes (Sarbanes-Oxley reduced from end-of-month), and Form 5 annually. Section 16(b) disgorges short-swing profits within any six-month window.
  • Section 14: proxy rules require Schedule 14A for solicitations; Rule 14a-8 allows shareholder proposals subject to procedural and substantive requirements; Rule 14a-19 (effective September 2022) universal proxy requires all director nominees on a single card.
  • Williams Act of 1968 added tender offer rules: Section 14(d) for offers triggering Schedule TO filing; Section 13(d)(1)(A) the original 5 percent reporting requirement.
  • Regulation Fair Disclosure (Reg FD) (2000): bars selective disclosure of material non-public information.
  • Regulation S-K and Regulation S-X: govern non-financial disclosure items and financial statement form/content, respectively.

Major SEC Enforcement Actions

  • Enron (2001) and Arthur Andersen demise (2002): driver of Sarbanes-Oxley.
  • WorldCom (2002): USD 11 billion accounting fraud; Bernard Ebbers convicted.
  • Bernard Madoff (2008): USD 65 billion notional Ponzi scheme; Madoff convicted, died in prison 2021.
  • Galleon Group / Raj Rajaratnam (2009-2011): insider trading; USD 46 million penalty plus 11-year sentence.
  • SAC Capital / Steven Cohen (2013): USD 1.8 billion settlement; Cohen barred for two years.
  • Wells Fargo fake accounts (2016): USD 185 million initial settlement; subsequent enforcement actions and total penalties exceeded USD 7 billion across CFPB, OCC, SEC, DOJ.
  • Tesla / Elon Musk (2018): USD 40 million penalty plus chairmanship surrender plus pre-approval of certain Musk Twitter communications, arising from August 2018 “funding secured” tweet.
  • Theranos / Elizabeth Holmes (2018 SEC; 2022 criminal): Holmes sentenced to 11 years and 3 months in 2022; Sunny Balwani to nearly 13 years in 2022.
  • FTX / Sam Bankman-Fried (2023-2024): USD 8 billion in customer fund misuse; Bankman-Fried convicted on seven counts in November 2023 and sentenced to 25 years in March 2024. Caroline Ellison, Gary Wang, Nishad Singh pleaded and cooperated.
  • Crypto enforcement: SEC v Ripple Labs (S.D.N.Y. 2023; Judge Analisa Torres) held that programmatic sales on exchanges were not investment contracts but institutional sales were, a partial Ripple win on appeal. SEC v Coinbase and SEC v Binance (both 2023) continued through 2024-2025; the Trump administration SEC withdrew or paused several crypto enforcement matters in 2025.

Disclosure Documents

  • S-1: initial registration statement, used for IPOs.
  • 10-K: annual report (audited financial statements).
  • 10-Q: quarterly report.
  • 8-K: material event report (typically 4 business day filing window).
  • DEF 14A: definitive proxy statement.
  • S-3: shelf registration for seasoned issuers.
  • S-4: registration for securities issued in mergers or exchange offers.
  • 20-F: foreign private issuer annual report.
  • 6-K: foreign private issuer interim reports.
  • Schedule 13D / 13G: beneficial ownership.
  • Schedule TO: tender offer.
  • Form 13F: institutional investment manager quarterly holdings (45-day filing deadline).
  • Form ADV: investment adviser registration.
  • Form PF: private fund adviser systemic risk reporting.

Crypto and Digital Asset Regulation

The Howey test from SEC v W.J. Howey Co. (1946 Supreme Court) defines an “investment contract”: an investment of money, in a common enterprise, with an expectation of profits derived from the efforts of others. Modern application:

  • SEC v Ripple Labs (S.D.N.Y. 2023): Judge Torres ruled that XRP institutional sales were investment contracts but programmatic sales on secondary trading platforms were not. The Second Circuit appeal was pending in 2024-2025.
  • SEC v Binance (D.D.C. 2023): allegations of unregistered exchange and broker-dealer activity.
  • SEC v Coinbase (S.D.N.Y. 2023): similar allegations; in March 2024 Judge Failla denied most of Coinbase’s motion to dismiss. The Trump SEC dropped the case in early 2025.
  • FIT 21 (Financial Innovation and Technology for the 21st Century Act): passed the House in May 2024 with bipartisan support, allocates jurisdiction between SEC (for securities) and CFTC (for digital commodities). Senate action delayed.
  • Spot bitcoin ETFs: approved January 2024 after Grayscale v SEC (D.C. Cir. 2023) vacated the SEC’s denial. Major sponsors: BlackRock IBIT, Fidelity FBTC, Grayscale GBTC, Ark/21Shares ARKB, Bitwise BITB.
  • Spot Ethereum ETFs: approved May-July 2024.

Going Public

  • Traditional IPO: roadshow, bookbuilding, firm-commitment underwriting, green-shoe overallotment.
  • Direct listing: no underwriter; first major was Spotify (2018), followed by Slack (2019), Palantir (2020), Coinbase (2021), Roblox (2021). The NYSE Direct Floor Listing rule was approved by the SEC in December 2020.
  • SPAC (special purpose acquisition company): 2020-2021 saw approximately 600 SPAC IPOs raising USD 160 billion. Major de-SPAC mergers: Lordstown Motors (subsequently bankrupt), Lucid Motors, Grab Holdings, Polestar, Faraday Future. Many de-SPACs lost over 90 percent of value, with widespread litigation. The SEC adopted final SPAC rules in January 2024 requiring enhanced disclosure, alignment of SPAC and de-SPAC underwriter liability, and projection caveats.

Underwriting

Bookbuilding remains the dominant pricing mechanism. The Google 2004 Dutch auction was an early alternative but did not catch on. Major underwriters: Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America Securities, Citigroup, Barclays, UBS, Jefferies, Deutsche Bank, Wells Fargo Securities, Stifel, Cowen (acquired by TD in 2023), Piper Sandler, Raymond James, RBC Capital Markets, Truist Securities, BMO Capital Markets.

M&A Practice

Deal Types

Strategic acquisitions (industry buyers seeking synergies) versus financial (private equity buyout sponsors). Horizontal (same industry), vertical (supply chain), and conglomerate. Consideration mix: cash, acquirer stock, or a blend.

Deal Process

Typical process: strategic review with the board (often with a fairness opinion provision in the engagement letter), retention of bankers, preparation of Confidential Information Memorandum (CIM), management presentation, due diligence with multi-thousand-document data rooms (Intralinks, Datasite, Firmex), first-round indications of interest, second-round and management meetings, markup of the merger agreement, negotiation, signing, regulatory approvals, shareholder vote, closing.

Major Investment Banks in M&A

Goldman Sachs has historically led M&A advisory league tables, followed by Morgan Stanley, JPMorgan, Bank of America Securities, and Citigroup. Independent advisory firms: Lazard, Centerview Partners, Evercore, PJT Partners, Houlihan Lokey, Moelis and Company, Perella Weinberg Partners, Rothschild and Co., Greenhill (acquired by Mizuho 2023), Guggenheim Securities, LionTree (TMT specialist), Allen and Company (media and the annual Sun Valley conference), FT Partners (fintech).

Major M&A Law Firms

The “white shoe” M&A boutique tradition is anchored by Wachtell Lipton Rosen and Katz, which has been the dominant target-side defense firm since the 1970s and originated the “poison pill” shareholder rights plan (Moran v Household International, Del. 1985). Other top firms: Cravath Swaine and Moore; Skadden Arps Slate Meagher and Flom; Sullivan and Cromwell; Simpson Thacher and Bartlett; Davis Polk and Wardwell; Latham and Watkins; Kirkland and Ellis (private equity dominant); Paul, Weiss, Rifkind, Wharton and Garrison; Cleary Gottlieb Steen and Hamilton; Weil, Gotshal and Manges; Debevoise and Plimpton; Sidley Austin; Cooley; Gibson Dunn and Crutcher; Munger, Tolles and Olson; Ropes and Gray.

Deal Documents

The negotiation sequence: Non-Disclosure Agreement, Letter of Intent or term sheet (typically non-binding except for exclusivity and confidentiality), merger agreement (for statutory merger) or stock or asset purchase agreement (for cash deals or carveouts). Key provisions:

  • Representations and warranties: detailed disclosure schedules; survival post-closing; sandbagging clauses.
  • Covenants: interim operating, no-shop with fiduciary out, regulatory cooperation.
  • Conditions to close: bring-down of reps, no MAC/MAE.
  • MAC / MAE (material adverse change/effect): the Delaware Court of Chancery first found a MAE in Akorn v Fresenius (2018, Vice Chancellor Travis Laster), permitting Fresenius to terminate. The high bar was reaffirmed in Tyson v IBP (Del. Ch. 2001) and more recently. COVID-19 MAE litigation (Forescout v Advent, Bed Bath and Beyond v 1-800-Flowers, AB Stable v MAPS Hotels) produced mixed results, mostly enforcing deals.
  • Termination rights and break-up fees: typical fee ranges 3 to 4 percent of equity value for friendly deals, higher for hostile or strategic deals. Reverse termination fees protect the target if buyer walks.
  • Specific performance: a long-running issue, sharpened by AB Stable (Del. Ch. 2020) and Twitter / Musk (Del. Ch. 2022, Chancellor Kathaleen McCormick) where Musk’s attempt to walk was met with a specific performance threat that drove closing.
  • Indemnification: representations and warranties insurance (R and W insurance) has displaced significant escrow in private deals; the global R and W market exceeded USD 80 billion in premium in 2023.

Antitrust Review

The Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 requires pre-merger notification for deals above the threshold (USD 123.5 million in 2025). Initial waiting period is 30 days (15 days for cash tender offers). If the antitrust agencies issue a Second Request, the parties must produce massive document discovery, depositions, and economic analysis, with a follow-on 30-day waiting period after substantial compliance.

FTC versus DOJ Antitrust Division clearance follows a clearance process; agencies divide review by industry expertise. The 2023 Merger Guidelines (jointly published in December 2023 by FTC Chair Lina Khan and DOJ Antitrust AAG Jonathan Kanter) substantially tightened theories of harm, raising the HHI thresholds for presumed anticompetitive effects, expanding labor market analysis, and adding vertical and serial-acquisition guidelines.

International review: European Commission DG Competition (Phase I and Phase II with up to roughly 25 weeks total), United Kingdom Competition and Markets Authority (CMA) Phase I and Phase II, China SAMR (notably activist in Synopsys/Ansys and in earlier cases), Korea KFTC, Australia ACCC, Brazil CADE, India CCI, Japan JFTC.

Major Recent M&A Deals

Closed:

  • ExxonMobil and Pioneer Natural Resources: USD 64 billion announced October 2023, closed May 2024 after FTC chair-style ban order on former Pioneer CEO Scott Sheffield.
  • Cisco and Splunk: USD 28 billion closed March 2024.
  • Microsoft and Activision Blizzard: USD 69 billion announced January 2022, closed October 2023 after extensive CMA and FTC litigation; CMA accepted Microsoft’s revised cloud-gaming carveout.
  • News Corp / Fox: re-merger explored in 2022, abandoned.
  • Diamondback and Endeavor: USD 26 billion announced February 2024.
  • Berkshire Hathaway / Pilot Travel Centers: Berkshire’s purchase of remaining stake from the Haslam family, with subsequent litigation in Delaware Chancery over earnout adjustments.
  • Smartsheet to Vista Equity and Blackstone for USD 8.4 billion (2024).

Pending or recently approved:

  • Chevron and Hess: USD 53 billion announced October 2023, contested by ExxonMobil through an arbitration claim over preemption rights on Hess’s Guyana Stabroek block. Arbitration resolved in Chevron’s favor in 2025.
  • HPE (Hewlett Packard Enterprise) and Juniper Networks: USD 14 billion, CMA cleared January 2025; DOJ challenge resolved.
  • Synopsys and Ansys: USD 35 billion announced January 2024, multiple jurisdictional clearances through 2024-2025.
  • Capital One and Discover Financial: USD 35 billion announced February 2024, expected to close 2025.

Failed:

  • Adobe and Figma: USD 20 billion abandoned December 2023 due to United Kingdom CMA and European Commission concerns.
  • iRobot and Amazon: USD 1.7 billion abandoned January 2024 over EU competition concerns.
  • Spirit Airlines and JetBlue: USD 3.8 billion blocked January 2024 by Judge William Young (D. Mass.) on DOJ challenge.
  • Albertsons and Kroger: USD 24.6 billion blocked December 2024 by both the FTC and a Washington state court preliminary injunction.
  • Lockheed Martin and Aerojet Rocketdyne: USD 4.4 billion abandoned February 2022 after FTC challenge.
  • Visa and Plaid: USD 5.3 billion abandoned January 2021 after DOJ challenge.
  • Sprint and T-Mobile: USD 26 billion closed April 2020 after DOJ approval; states sued and lost.

Shareholder Activism

Major activists: Elliott Investment Management (Paul Singer; approximately USD 60 billion AUM with a large activist sleeve), Carl Icahn’s Icahn Enterprises, Trian Partners (Nelson Peltz, Edward Garden), Pershing Square Capital Management (Bill Ackman), ValueAct Capital, Starboard Value (Jeffrey Smith), Engine No. 1, Land and Buildings, Engine Capital, Sachem Head Capital, Politan Capital. Cevian Capital in Europe. Effissimo Capital Management in Japan.

The universal proxy rule (SEC Rule 14a-19, effective September 2022) requires all director nominees on a single ballot in contested elections, lowering the bar to mounting partial slates.

Private Equity in M&A

See Finance/private-equity-and-credit for detailed coverage of buyout sponsors. Recent take-privates: Smartsheet (Vista/Blackstone USD 8.4 billion 2024), Squarespace (Permira USD 7 billion 2024), Indus Holdings, Endeavor Group Holdings (Silver Lake USD 13 billion 2024-2025).

Key Delaware Decisions

The Delaware Court of Chancery and Supreme Court establish the canonical body of M&A fiduciary duty law:

  • Smith v Van Gorkom (Del. 1985): board’s failure to exercise due care in selling Trans Union resulted in personal liability; spawned 102(b)(7) exculpation clauses universally adopted.
  • Unocal v Mesa Petroleum (Del. 1985): intermediate scrutiny for defensive measures in response to a threat to corporate policy and effectiveness; the Unocal/Unitrin proportionality test.
  • Revlon v MacAndrews and Forbes (Del. 1986): once a sale is inevitable, directors’ duty shifts to obtaining the best price reasonably available. Reaffirmed and refined in QVC (1994), Lyondell (2009), and others.
  • Weinberger v UOP (Del. 1983): entire fairness review for self-dealing transactions; fair dealing and fair price.
  • In re Caremark (Del. Ch. 1996, Chancellor Allen): board oversight liability for failure to implement reporting systems. Ratcheted in Marchand v Barnhill (Del. 2019, Blue Bell ice cream listeria), Boeing 737 MAX (Del. Ch. 2021), and McDonald’s Stein (Del. Ch. 2023, officer oversight extension).
  • Kahn v M and F Worldwide (MFW) (Del. 2014): two-step protections (independent special committee plus majority-of-minority vote) restore business judgment review for controlling shareholder squeeze-outs. Match Group (Del. 2024) reaffirmed MFW applicability.
  • Tornetta v Musk (Del. Ch. 2024, Chancellor McCormick): rescinded Musk’s 2018 Tesla performance award (valued at over USD 56 billion at the time of decision); Tesla shareholders ratified a second time in 2024 but ratification’s effect remains on appeal.
  • Crispo v Musk (Del. Ch. 2023): specific performance enforcement of Musk’s Twitter acquisition (subsequent settlement).

Cross-Border M&A

CFIUS (Committee on Foreign Investment in the United States), Treasury-chaired interagency committee that reviews foreign investment for national security. FIRRMA (Foreign Investment Risk Review Modernization Act, 2018) expanded CFIUS jurisdiction to certain non-controlling minority investments and real estate. The October 2023 Outbound Executive Order (and 2024 Treasury final rule) restrict outbound United States investment in Chinese semiconductors, AI, and quantum.

UK National Security and Investment Act (NSIA, 2021): mandatory and voluntary notification regime across 17 sectors. European Union FDI Screening Regulation (2019) and Foreign Subsidies Regulation (FSR, in force July 2023) require notification for large transactions with foreign subsidies.

M&A Drivers in 2024-2025

AI consolidation: NVIDIA Run:ai, NVIDIA Deci, semiconductor consolidation more broadly. Pharma loss-of-exclusivity (LOE) replenishment: Pfizer and Seagen (USD 43 billion, 2023), Merck and Prometheus Biosciences (USD 11 billion, 2023), AbbVie and ImmunoGen (USD 10 billion, 2024), AbbVie and Cerevel Therapeutics (USD 9 billion, 2024), Bristol-Myers Squibb and Karuna Therapeutics (USD 14 billion, 2024). Energy consolidation in the Permian Basin and Guyana drives multiple deals.

Private Securities Litigation Reform Act (PSLRA)

PSLRA 1995 raised pleading standards for federal securities class actions. Heightened pleading requires particularized allegations giving rise to a strong inference of scienter. The Supreme Court interpreted the standard in Tellabs v Makor Issues and Rights 2007. Lead plaintiff selection presumes the largest financial interest plaintiff. Automatic stay of discovery during motion to dismiss. Safe harbor for forward-looking statements accompanied by meaningful cautionary language. Loss causation pleading after Dura Pharmaceuticals 2005.

Tender Offers in Detail

Section 14(d) governs cash tender offers for more than five percent. Rule 14d-9 governs target board response (Schedule 14D-9). Schedule TO is filed by the bidder. Minimum 20 business day offer period. All-holders rule and best-price rule. Mini-tenders below 5 percent escape full 14(d) regulation; SEC has cautioned investors. Two-step transactions: tender offer followed by short-form merger. Section 251(h) Delaware (effective 2013) permits short-form merger at majority threshold after qualified tender offer.

Foreign Private Issuer Status

A foreign private issuer (FPI) is a non-US issuer that does not exceed certain US holder and US business contact thresholds. FPIs file 20-F annually rather than 10-K and 6-K interim reports rather than 10-Q. Exempt from proxy rules under Section 14(a). Exempt from Section 16 insider reporting and short-swing profit recovery. May follow home-country corporate governance practices subject to disclosure. Major FPIs on US markets: TSMC, ASML, Novartis, Toyota, Shell, BP, AstraZeneca, Sony, Alibaba (until going-private 2024 not pursued), JD.com, Baidu.

Auditor Oversight

PCAOB inspections of registered public accounting firms. Big Four auditors: PricewaterhouseCoopers, EY, Deloitte, KPMG. Mid-tier: BDO, Grant Thornton, RSM, Crowe, Mazars, Baker Tilly. PCAOB AS 3101 (formerly AS 16) requires critical audit matters (CAMs) disclosure in audit reports of public companies, effective for large accelerated filers from June 2019. PCAOB and SEC settled multi-year audit deficiency disputes with Chinese audit firms in August 2022 (Statement of Protocol), enabling inspection of work papers for US-listed Chinese issuers.

Holding Foreign Companies Accountable Act

HFCAA 2020 requires SEC delisting after three consecutive years of PCAOB inability to inspect auditors. The Accelerating Holding Foreign Companies Accountable Act (signed December 2022) shortened the period to two years. PCAOB conducted first-ever inspections of mainland China and Hong Kong audit firms in 2022-2024. HFCAA threatened US delisting for many Chinese ADRs in 2021-2022; threat largely dissipated after the 2022 Statement of Protocol.

Insider Trading Doctrine

Classical theory (Chiarella v US 1980): officer or director owes fiduciary duty to shareholders, breach of which through trading on material non-public information violates Rule 10b-5. Misappropriation theory (US v O’Hagan 1997): trading on information misappropriated in breach of duty to source of information violates the rule. Tipper-tippee liability (Dirks v SEC 1983): tipper must breach a fiduciary duty with personal benefit, and tippee must know. Newman v US 2014 Second Circuit narrowed personal benefit; partially abrogated by Salman v US 2016. US v Martoma 2017 Second Circuit (en banc declined) further refined personal benefit doctrine. Insider Trading Prohibition Act (STOCK Act 2012) plus subsequent legislative proposals; Rule 10b5-1 trading plans amended December 2022 to add cooling-off periods and concurrent plan restrictions.

Major Recent Securities Class Actions

Boeing 737 MAX securities class action settled USD 237.5 million 2021. Wells Fargo USD 1 billion 2020 settlement for fake-accounts disclosure. Allianz Structured Alpha funds USD 6 billion total resolution 2022 including DOJ guilty plea by US subsidiary. Goldman Sachs ABACUS-related class action settled USD 272.5 million 2018. Twitter / X (under Musk) shareholder litigation regarding the going-private transaction. Robinhood IPO related class actions 2021-2024. Coinbase securities cases including insider trading first-ever crypto case 2022.

SPACs Final Rules Detail

SEC Adopting Release 33-11265 (January 24, 2024). Required disclosure of conflicts of interest, dilution, target company information. Sponsor compensation disclosure. Target company is treated as co-registrant on Form S-4 / F-4. Statutory underwriter liability under Section 11 may attach to former SPAC underwriters that perform de-SPAC services (the “in or about” the de-SPAC transaction theory). Projections must include underlying basis disclosure. Effective date July 1, 2024.

Delaware DGCL Section 220 Books and Records

Section 220 grants stockholders right to inspect books and records for a proper purpose. Recent expansion via cases including Lebanon County Employees’ Retirement Fund v Amerisourcebergen 2020 (officer-level documents accessible) and AmerisourceBergen Corp v Lebanon County (Del. 2020 affirming). The 2023 amendments to DGCL Section 220 codified specific record categories accessible. Books-and-records demands routinely precede stockholder derivative or class action filings.

Universal Proxy Rule Operation

SEC Rule 14a-19 (effective September 1, 2022) requires all director nominees on a single ballot in contested elections. Dissidents must solicit holders of at least 67 percent of voting power. Dissidents must give the registrant notice 60 days before meeting. First proxy fights under universal proxy: Engine Capital at Kohl’s 2022; Politan at Masimo 2023 (Politan won two seats); Land and Buildings at Six Flags 2023.

Adjacent

Schedule TO and Tender Offer Disclosure

Schedule TO requires disclosure of bidder identity, source of funds, purpose, plans for the target, and material agreements. Best-price rule (Rule 14d-10): all security holders must receive the same price. All-holders rule (Rule 14d-10(a)(1)): the offer must be open to all holders of the class. Pro rata acceptance: if oversubscribed, pro rata across all tendered shares. Withdrawal rights during the offer period. Top-up options: allow short-form merger after tender.

Major Section 11 Cases

Omnicare v Indiana State District Council (2015): pleading standards for Section 11 statements of opinion. Slack v Pirani (2023): direct listing tracing problem; the Supreme Court held that Section 11 requires plaintiffs to plead and prove that they acquired registered shares. The Slack ruling significantly weakened Section 11 claims arising from direct listings where registered and unregistered shares trade together.

Recent Sanctions and Export Control Intersections

OFAC SDN List sanctions affect deal structuring including Russian sanctions post-2022. BIS Entity List and Foreign Direct Product Rule semiconductor export controls (October 2022 and successor packages). Outbound investment EO 2023 final rules October 2024 covering Chinese semiconductors, AI, quantum. NSPM-33 federal grant disclosure for foreign funding sources. CHIPS and Science Act 2022 USD 52.7 billion subsidies with claw-back and guardrails on China expansion.

Major Class Action Settlements (2022-2024)

Wells Fargo USD 1 billion 2020. Allianz Structured Alpha USD 5+ billion total 2022-2023. Boeing 737 MAX USD 237.5 million 2021. SunEdison post-bankruptcy. Tesla USD 137 million racial harassment verdict 2021 (reduced). Robinhood payment-for-order-flow class actions. Coinbase securities class actions partially survived motion to dismiss 2024. Square (Block, Inc.) Cash App data breach settlement USD 15 million 2024.

Whistleblower Programs

SEC Whistleblower Program (Dodd-Frank Section 922): 10 to 30 percent of sanctions over USD 1 million; over USD 2 billion in awards through 2024. Largest SEC whistleblower award: USD 279 million in May 2023. CFTC Whistleblower Program. IRS Whistleblower Program (different bounty structure under Section 7623). False Claims Act qui tam actions. Dodd-Frank anti-retaliation protections.

Cross-Border Antitrust Coordination

International Competition Network (ICN) coordination. Five Eyes antitrust intelligence sharing (US, UK, Canada, Australia, NZ). EU-US Joint Technology Competition Policy Dialogue. G7 Digital Competition Summit. European Commission DMA (Digital Markets Act 2022) gatekeeper regulation. European Commission DSA (Digital Services Act 2022) content moderation regulation. DOJ Antitrust Division Section 8 Clayton Act interlocking directorate enforcement revival 2022.

CFIUS Detailed Process

Voluntary notice or mandatory declaration (declaration for certain TID US business investments). 30-day initial review followed by 45-day investigation if needed. Tolling possible by mutual agreement. Mitigation agreements common: passive shareholder limits, board observer rights, governance commitments, supply chain assurance. Recent CFIUS blocks or unwound: Aixtron-Grand Chip (Obama 2016 blocked), TikTok-Bytedance ongoing concerns (forced divestment law Protecting Americans from Foreign Adversary Controlled Applications Act April 2024; Supreme Court upheld January 2025; deadline January 19, 2025 with extension to April 2025). Outbound EO covers semiconductors, AI, quantum to PRC.

Take-Private Mechanics

Cash merger requires majority vote (or higher if charter requires). Section 251(h) two-step short-form merger after tender of majority. Top-up options bridge between tender and short-form threshold. Appraisal rights under DGCL Section 262: dissenters may seek judicial determination of fair value. Recent appraisal trends: Dell (Del. 2017) and Aruba (Del. 2019) emphasized deal price minus synergies. Verition Partners Master Fund v Aruba Networks (Del. 2019) accepted deal price unaffected by synergies. Appraisal arbitrage strategies declined after these rulings.

DGCL Section 102(b)(7) Exculpation

Charter-based exculpation of directors for breach of duty of care, not duty of loyalty or bad faith. Universal in Delaware public company charters since 1986. 2022 amendment to Section 102(b)(7) extended exculpation to officers (responding to officer-liability cases including Goldstein v Denner).

Recent SEC Proposed and Adopted Rules

Cybersecurity disclosure (adopted July 2023): material cyber incident 4-business-day Form 8-K; annual 10-K cyber risk governance. Private fund advisers rules (adopted August 2023): quarterly statements, audits, fairness opinions, restricted activities; partially vacated by Fifth Circuit National Association of Private Fund Managers v SEC June 2024. Climate disclosure (adopted March 2024): scaled back; stayed. Short sale disclosure (adopted October 2023): Form SHO monthly aggregate position reporting. Beneficial ownership amendments (October 2023): shortened 13D and 13G filing windows. Stock buyback disclosure (adopted May 2023): vacated by Fifth Circuit December 2023. Names Rule amendments (adopted September 2023): 80 percent name-test extension for fund names.

Notable In-House Counsel and General Counsels

Hilary Krane (Salesforce, formerly Nike), Brad Smith (Microsoft President), Kent Walker (Alphabet), Hillary Smith (Meta), Susan Wojcicki (former YouTube CEO), Beth Galetti (Amazon), Alan Braverman (Disney through 2022). Influence: shareholder activism response, internal investigations, government relations, M and A diligence coordination.

Bar Admission and Practice

Admission to practice in state of bar; pro hac vice for individual matters. SEC bar (any practitioner before SEC). Public company bar association: ABA Business Law Section. Tulane M and A Institute, Delaware Bar M and A Conference, PLI Securities Law and Practice annual. Corp Counsel of America (ACC) for in-house bar.

SPAC Decline and SEC Final Rules

Annual SPAC IPO count: 248 (2020), 613 (2021), 86 (2022), 31 (2023), declining 2024. De-SPAC merger consummations: similarly declined. Major de-SPAC failures: Lordstown Motors (2023 bankruptcy), Polestar shares -90 percent, Faraday Future, Bird Global, Better.com, Velodyne Lidar. SEC Adopting Release 33-11265 (Special Purpose Acquisition Companies, Shell Companies, and Projections, effective July 1, 2024). Statutory underwriter liability under Section 11 for former SPAC underwriters under the “in or about” theory. Sponsor compensation disclosure including promote economics.

Universal Proxy Practical Results

First contested election under Rule 14a-19 (effective September 1, 2022): Engine Capital at Kohl’s 2022. Politan Capital vs. Masimo 2023: Politan won two board seats against management. Land and Buildings at Six Flags 2023. Encompass Health board fight 2024. Strategic implications: dissidents can target specific directors; activists with credible nominees gain leverage.

Significant Recent Delaware Decisions

Tornetta v Musk (Del. Ch. January 2024, McCormick): rescinded Musk’s 2018 Tesla performance award (USD 56 billion at time of decision); appeal to Delaware Supreme Court pending 2025. Tesla shareholder ratification June 2024 (vote yes 72 percent) raised novel ratification timing question. Match Group (Del. 2024): reaffirmed MFW framework for controlling shareholder transactions. Sjunde AP-Fonden v Activision Blizzard (Del. Ch. 2024): merger agreement defects. West Palm Beach Firefighters v Moelis (Del. Ch. February 2024): stockholder agreements granting governance rights to majority shareholder void under DGCL 141; legislative response in DGCL Section 122(18) effective August 1, 2024.

DGCL Section 122(18)

The 2024 Delaware General Corporation Law amendment expressly authorized stockholder agreements granting governance rights. Responded directly to West Palm Beach Firefighters v Moelis decision. Permits boards to enter agreements with stockholders restricting future actions. Endorsed major dual-class and founder-control structures.

Internal Affairs Doctrine

State of incorporation governs internal corporate affairs. Delaware dominant due to expertise of Court of Chancery and Delaware Supreme Court. 2024 Texas Business Court launched as competing venue. Texas SB 2640 2025 amending TBOC to attract corporate charters.

Recent Major Antitrust Cases

US v Google Search (D.D.C. August 2024 ruling): Google found liable for monopoly maintenance in general search. Remedy proceedings ongoing; potential structural remedies including Chrome browser divestiture. US v Google Ad Tech (E.D. Va. April 2025 ruling): Google found liable in two of three relevant markets. FTC v Meta (D.D.C. 2024-2025 trial): challenging Instagram and WhatsApp acquisitions retroactively. FTC v Amazon (W.D. Wash. 2023 filing): monopolization of online marketplace. DOJ v Apple (D.N.J. March 2024 filing): smartphone monopolization.

Investment Adviser Examinations

SEC Division of Examinations conducts approximately 15 percent of registered investment advisers each year. Priorities published annually. 2024 priorities: marketing rule, custody, ESG, crypto assets, cybersecurity, private fund advisers. NEP (National Exam Program) coordinates with state regulators.

Recent Crypto Enforcement Resolutions

Coinbase: SEC withdrew civil action 2025. Binance: USD 4.3 billion guilty plea November 2023; Changpeng Zhao guilty plea 4 months sentence. Kraken: SEC settlement 2023; civil action withdrawn 2025. Robinhood: WFTF investigation pending. Galaxy Digital, Genesis Global Trading, Galaxy Lending: settlements 2024. FTX 25-year sentence November 2024 Bankman-Fried; Caroline Ellison 24-month sentence September 2024.

Banking Regulatory M and A

Bank mergers require Federal Reserve, OCC (if national bank), FDIC (if state non-member) approval plus DOJ antitrust. Bank Merger Act 1960 and Bank Holding Company Act 1956. Recent failures: Silicon Valley Bank (FRB acquisition by First Citizens BancShares March 2023), Signature Bank (NY Community Bancorp acquisition March 2023), First Republic Bank (JPMorgan Chase acquisition May 2023), Republic First Bank (Fulton Financial 2024), Heartland Tri-State Bank. Pending bank mergers: Capital One and Discover, Bank of Montreal acquired Bank of the West 2023.

Texas Business Court

Created by SB 27 2023 effective September 1, 2024. Specialized court for business disputes exceeding USD 10 million. Five divisions in major metros. First major decisions emerging late 2024-2025. Designed to compete with Delaware Chancery for business venue.

Securities Arbitration

FINRA Dispute Resolution Services administers arbitration and mediation for broker-dealer disputes. Mandatory arbitration clauses in brokerage agreements universal. Public arbitrators and non-public arbitrators on panels. 2024 FINRA proposed changes to discovery, motion practice.

Glass-Steagall and Bank Holding Company Structures

Glass-Steagall (Banking Act of 1933) Sections 16, 20, 21, 32 separated commercial and investment banking. Gramm-Leach-Bliley Act 1999 repealed Sections 20 and 32, permitting bank holding company subsidiaries to engage in securities activities. Bank Holding Company Act 1956 governs holding company structure. Financial Holding Company election permits “financial in nature” activities. Dodd-Frank Volcker Rule (Section 619) reinstated proprietary trading limits.

CAMs disclosed in PCAOB inspection reviews:

  • Revenue recognition complexity.
  • Goodwill and intangible impairment.
  • Income tax valuation allowance.
  • Loan loss reserve estimation (banks).
  • Acquired in-process R and D fair value (pharma).
  • Cryptocurrency valuation (crypto holders).

Cross-Border Securities Listings

US OTC ADR programs Levels I, II, III. Sponsored ADR: company-cooperative with US listing. Unsponsored ADR: established by depositary without company involvement. Rule 144A QIB market: USD 5 trillion+ in restricted securities. GDR (Global Depositary Receipt) for non-US listings (London, Luxembourg). Recent China ADR pressure: 19 SOE delistings 2022 (Sinopec, PetroChina, China Telecom, China Life). Hong Kong dual primary listings: Alibaba 2019, JD.com, NetEase, Baidu.

Selected Activist Campaigns 2023-2025

Trian and Disney 2023-2024: Peltz lost board contest; subsequent Disney plan to spin assets. Engine No. 1 successor Inclusive Capital Partners at Bayer 2024. Elliott at Salesforce 2023 (settled), Crown Castle 2024 (board changes), BHP 2024 (Anglo American bid pressure), Honeywell 2024 (split announcement). Pershing Square Bill Ackman activism: Howard Hughes Holdings, Universal Music Group, Nike (2024). Carl Icahn at Illumina 2023 (board change, Grail spinoff). Politan at Centene 2024.

Recent CFIUS Actions

Outbound EO 14105 (August 2023) and Treasury Final Rule October 2024. Covered transactions in semiconductors, AI, quantum. Notification requirement for certain transactions; prohibition for others. TikTok Protecting Americans from Foreign Adversary Controlled Applications Act (April 2024). TikTok v Garland D.C. Circuit upheld December 2024. Supreme Court affirmed January 17, 2025. Trump executive order April 4, 2025 extending deadline for divestment.

Hipster antitrust / neo-Brandeisian school: Lina Khan FTC chair 2021-2025. Vertical merger guidelines withdrawn and replaced 2023. HMI guidelines tightened. Section 5 unfair methods of competition broader interpretation in FTC policy statement November 2022. Non-compete agreement ban rule April 2024 (vacated by ND Tex Ryan v FTC August 2024). Khan FTC second term not confirmed; Trump 2025 FTC commissioners.

Investment Company Act Exemptions

Section 3(c)(1): under 100 beneficial owners (or 250 for venture capital qualifying funds). Section 3(c)(7): all owners qualified purchasers (USD 5 million in investments for individuals; USD 25 million for institutions). Both exemptions: avoiding registration as investment company. Investment Adviser registration threshold USD 110 million. Exempt Reporting Adviser (ERA) status for venture capital and private fund advisers below thresholds.

State Securities Laws (Blue Sky)

Each state has its own securities act (typically based on Uniform Securities Act 1956, 1985, or 2002). National Securities Markets Improvement Act 1996 (NSMIA) preempted state registration for covered securities. State enforcement and notice filings continue. Texas, California, New York, Massachusetts state regulators most active.

Form CRS Customer Relationship Summary

SEC adopted Regulation Best Interest (Reg BI) and Form CRS effective June 2020. Reg BI: standard of conduct for broker-dealers when making recommendations to retail customers. Form CRS: short relationship summary disclosure. DOL fiduciary rule history: 2016 rule vacated 2018; new 2024 Retirement Security Rule.

Investment Adviser Standard of Conduct

Section 206 of Investment Advisers Act 1940. Fiduciary duty: duty of care and duty of loyalty. SEC Interpretation Regarding Standard of Conduct for Investment Advisers June 2019. Conflict of interest disclosure required.

Securities Lending Disclosure

SEC Rule 10c-1a adopted October 2023. Securities lending disclosure to FINRA from January 2024 (delayed). Industry concerns and challenges.

Short Sale Disclosure Detail

SEC Rule 13f-2 adopted October 2023. Form SHO monthly reporting by institutional investment managers with material short positions. Threshold: USD 10 million dollar value or 2.5 percent of issuer. Aggregated and reported by SEC publicly.

Clawback Rules

Sarbanes-Oxley Section 304: CEO and CFO certification. Dodd-Frank Section 954 directed SEC to require clawback policies. SEC final rule October 2022. Listing standards effective October 2023 for major exchanges. Required clawback of excess incentive compensation following accounting restatement.

Pay vs Performance Disclosure

SEC adopted August 2022 Pay versus Performance (PvP) rule under Dodd-Frank Section 953(a). New table in proxy statement comparing compensation actually paid to performance metrics. Compensation Actually Paid (CAP): adjustments to Summary Compensation Table.

Stock Buyback Disclosure (Vacated)

SEC adopted May 2023 rule requiring detailed buyback disclosure (Form SR daily). Vacated by Fifth Circuit Chamber of Commerce v SEC December 2023. 1 percent excise tax on net buybacks under IRA 2022 continues.

Crypto Custody and Wallet Issues

SAB 121 (Staff Accounting Bulletin) March 2022: banks/custodians required to record crypto held in custody as assets and liabilities on balance sheet. 2024 House and Senate passed CRA resolution to rescind SAB 121; vetoed by Biden May 2024. SAB 122 January 2025 rescinded SAB 121. OCC, FDIC, Federal Reserve guidance on bank crypto activities revised under Trump 2025.

Stablecoin Legislation

GENIUS Act and Clarity for Payment Stablecoins Act in 2024 Congress. Bipartisan support but Senate procedural delays. Hong Kong, Singapore, UAE active stablecoin issuance jurisdictions. USDC (Circle), USDT (Tether), DAI, PYUSD (Paxos for PayPal), USDP, BUSD (BUSD ceased 2023).

Banking Crisis 2023 and Regulatory Response

Silicon Valley Bank failure March 10, 2023. Signature Bank failure March 12, 2023. First Republic Bank failure May 1, 2023. Heartland Tri-State Bank Kansas July 2023. Republic First Bank April 2024. Federal Reserve Bank Term Funding Program (BTFP) March 2023. FDIC systemic risk exception for uninsured deposits. Basel III Endgame proposed July 2023 (significantly weakened in September 2024 reproposal).

Operating Without a License

Unregistered securities offerings major SEC priority. SEC v Telegram (S.D.N.Y. 2020): TON token offering enjoined. SEC v Kik Interactive (S.D.N.Y. 2020): KIN offering. SEC v Terraform Labs (S.D.N.Y. 2023-2024): Do Kwon civil and criminal. SEC v BlockFi 2022 settlement USD 100 million. SEC v Celsius 2023.

Recent FINRA Enforcement

Robinhood Financial USD 70 million 2021. Robinhood Securities USD 7.5 million 2024. LPL Financial USD 6.5 million 2024. Wells Fargo Clearing Services USD 1.7 million 2024. J.P. Morgan Securities USD 18 million 2023. Citigroup USD 7 million 2024.

SEC Examination Priorities 2025

Investment adviser fiduciary duty. Marketing rule. Cybersecurity and resilience. Custody. ESG misrepresentation (continuing). Crypto assets and emerging tech. Private fund advisers. LIBOR-SOFR transition residual.

Corporate Investigation Practice

Internal investigations triggered by whistleblower complaints, regulatory inquiries, audit findings. Privilege issues: attorney-client, work product, joint defense. Upjohn warnings to employees. Cooperation credit with DOJ/SEC. Yates Memo 2015 (individual accountability) and revisions through Biden DOJ guidance 2021.

DOJ Compliance Program Evaluation

DOJ Criminal Division Evaluation of Corporate Compliance Programs (2017, updated 2020, 2023). Three core questions: well designed, effectively implemented, working in practice. Compensation incentives and clawbacks (March 2023 update). M and A integration of compliance (June 2024 update).

Sentencing Guidelines Detail

USSG Chapter Eight: organizational sentencing. Effective compliance and ethics program: reduces culpability score. Recent trends: cooperation discounts, voluntary self-disclosure programs. DOJ Voluntary Self-Disclosure Policy March 2023. Pilot Program on Compensation Incentives and Clawbacks March 2023.

Bitcoin Spot ETF Launch

Approved January 10, 2024 after Grayscale v SEC (D.C. Cir. 2023). First-day trading volume USD 4.6 billion. Major sponsors: BlackRock IBIT (largest), Fidelity FBTC, Grayscale GBTC, Ark/21Shares ARKB, Bitwise BITB, Invesco BTCO, Franklin EZBC, Valkyrie BRRR, WisdomTree BTCW, VanEck HODL, Hashdex DEFI. Cumulative net inflows exceeded USD 35 billion by end-2024. IBIT became BlackRock’s most successful ETF launch.

Spot Ethereum ETF Launch

Approved May 23, 2024 (19b-4 filings); effective July 23, 2024. Sponsors include BlackRock ETHA, Fidelity FETH, Grayscale ETHE/ETH, Bitwise ETHW, VanEck ETHV, Invesco QETH, Franklin EZET, 21Shares CETH. Staking not permitted in initial approvals.

Crypto Stablecoin and Banking Charter Issues

Federal Reserve Master Account access denied to some crypto-focused entities. Custodia Bank (Caitlin Long) lawsuit and Federal Reserve denial. NYDFS BitLicense for crypto in NY. Wyoming SPDI (special purpose depository institutions) charter.

Insider Trading Cases 2024

US v Yossi Tomer (S.D.N.Y. 2024): Apple supplier insider trading. US v Yan and others (E.D. Pa. 2023-2024): semiconductor industry tipping. SEC v Mathew (D.N.J. 2024): biotech insider. Rule 10b5-1 plan amendments effective February 2023.

ESG Disclosure Rule Status

SEC climate disclosure rule stayed and not defended under Trump SEC. California SB 253, SB 261, AB 1305 in force. ESG fund naming rule (Names Rule) effective. Climate-related material disclosures remain required to extent material under Reg S-K and Reg S-X.

Crypto Legislation Updates

FIT 21 (Financial Innovation and Technology for the 21st Century Act) passed House May 2024. GENIUS Act stablecoin legislation in Senate. Crypto digital asset framework Senate Banking Committee work. DOJ digital asset enforcement: SDNY Tornado Cash, others.

State Disclosure Initiatives

California climate disclosure laws (SB 253, SB 261) face legal challenges. New York Climate Corporate Data Accountability Act proposed. Vermont climate disclosure law passed 2024. Colorado climate disclosure proposed.

Universal Proxy Major Outcomes

Politan vs Masimo 2023: Politan won two of three nominated seats. Engine No. 1 vs ExxonMobil 2021 (pre-universal proxy). Trian vs Disney 2024: Peltz lost. Politan vs Masimo 2024 (second campaign): unsuccessful.

Recent Activist Settlements

Elliott and BlackBerry 2024. Elliott and Salesforce 2023 (Marc Benioff retains, multiple board seats). ValueAct and Salesforce 2023. Starboard and Splunk 2022-2023 (preceded Cisco acquisition). Trian and Procter and Gamble historical (2017-2018).

Major Cross-Border Deal Reviews

Microsoft-Activision USD 69 billion: closed October 2023 after CMA settlement. Adobe-Figma USD 20 billion: abandoned December 2023 EU/UK. iRobot-Amazon USD 1.7 billion: abandoned January 2024. Broadcom-VMware USD 69 billion: closed November 2023 (EU, China clearance complexities). TSMC Arizona fab CFIUS clearance straightforward; Korea Samsung Texas fab.

US Sovereign Wealth Activity

Saudi Arabia Public Investment Fund (PIF): Activision early stake, EA stake. UAE Mubadala active in technology and energy. Qatar Investment Authority. CFIUS reviews increasingly common. Recent: G42 (UAE) and Microsoft USD 1.5 billion investment 2024.

Recent EU Antitrust Cases

DG Comp Booking Holdings designated under DMA. Apple, Meta, Google, Amazon, Microsoft, ByteDance as gatekeepers. EU Foreign Subsidies Regulation in force July 2023. First FSR notifications and prohibitions. Emirates Telecommunications acquisition of PPF Telecom 2024 prohibited under FSR.

State Attorney General Initiatives

NY AG Letitia James: Donald Trump civil fraud, NRA, ExxonMobil, banking enforcement. California AG Rob Bonta: climate, antitrust, consumer protection. Massachusetts AG Andrea Campbell: ExxonMobil, big tech. Texas AG Ken Paxton: tech censorship, ESG enforcement. 27-state ESG enforcement coalition led by Tennessee.

Recent Section 220 Cases

In re Apple Inc. (Del. Ch. 2024). Tiger Global Management LLC v Trent and Margaret Capital Management. In re Goldman Sachs Group, Inc. Books and Records Litigation. DGCL Section 220 amendments effective August 2024.

DGCL 2024 Amendments Detail

Section 122(18): authorized stockholder agreements granting governance rights. Section 232: notice and corporate communications electronically. Section 161: redemption rights. Section 219: stocklist preparation. Section 220 stockholder books and records updates. Amendments effective August 1, 2024.

DGCL Section 102(f) Charter Limitations

Charter provisions limiting director and officer liability. Cannot exculpate for breach of duty of loyalty, bad faith, intentional misconduct, unlawful distributions. Officer exculpation added 2022.

Schedule TO Tender Offer Detail

Schedule TO-I (issuer tender offer). Schedule TO-T (third-party tender offer). Schedule TO-C (communications relating to a tender offer). Required filing within five days of commencement. Required disclosures including financial information of bidder if material.

Going-Private Considerations

Affiliate vs third-party transactions. Rule 13e-3 requires comprehensive disclosure. Schedule 13E-3 filing. Procedural protections including independent committee and majority-of-minority vote.

Tender Offer Recommendation Statement

Schedule 14D-9 required from target. Recommendation: accept, reject, or remain neutral. Background of the offer. Reasons for recommendation. Fairness opinion if obtained.

Recent SEC Whistleblower Awards 2024

USD 50 million March 2024. USD 24 million April 2024. USD 18 million June 2024. USD 110 million November 2024. Cumulative awards exceeded USD 2.2 billion by end-2024. Office of the Whistleblower at SEC.

Recent Securities Cases Supreme Court

Slack Technologies v Pirani (2023): tracing requirement for Section 11. Goldman Sachs v Arkansas Teacher Retirement System (2021): generic statement materiality. Lorenzo v SEC (2019): scheme liability under Rule 10b-5(a) and (c). Macquarie Infrastructure v Moab Partners (2024): Item 303 MD and A omissions not actionable under Rule 10b-5(b).

Recent SEC No-Action Letters

ESG shareholder proposal exclusion patterns. Crypto staking guidance. Investment adviser custody. Rule 14a-8 changes November 2024.

Item 303 MD and A Requirements

Material trends or uncertainties. Known events likely to have material impact. Liquidity and capital resources. Macquarie v Moab Partners narrowed actionable omissions.

Cybersecurity Disclosure Rule

SEC final rule effective December 2023. Form 8-K Item 1.05 for material cybersecurity incidents within four business days. Annual 10-K disclosure of cybersecurity risk management and governance. Multiple delayed notification clauses for national security. Foreign private issuer Form 6-K equivalent.

Recent Cyber Incident Disclosures

UnitedHealth Group/Change Healthcare February 2024 ransomware (USD 1B+ impact). Las Vegas Sands customer data 2024. American Express, Bank of America, Wells Fargo various 2024 events. Disney, McDonald’s, AT and T data breaches. Snowflake customer breaches 2024.

Foreign Corrupt Practices Act

FCPA 1977 anti-bribery and accounting provisions. Recent enforcement actions: Albemarle USD 218 million 2023, BAT USD 635 million 2023, ABB USD 460 million 2022. DOJ Foreign Extortion Prevention Act 2023. EU Anti-corruption Directive proposed 2023.

Sanctions and Securities Enforcement

OFAC, Commerce, Treasury, DOJ sanctions overlap. Recent: Sberbank settlements, VTB Bank, Russian oligarchs. BIS Entity List additions Chinese semiconductor and surveillance firms. Russia 50th day sanctions package.

Sustainability-Linked Financing Litigation

DWS USD 19 million 2023 SEC enforcement. Goldman Sachs Asset Management USD 4 million 2022. BNY Mellon USD 1.5 million 2022. European greenwashing litigation accelerating.

SEC Comment Letter Practice

Corp Fin review of registration statements and periodic reports. Comment letters publicly available 20 days after correspondence ends. Materiality, segment reporting, revenue recognition, non-GAAP common topics. ESG and climate-related comments increasingly common.

Item 1.05 Form 8-K Materiality

Material cybersecurity incidents. Materiality determined “without unreasonable delay.” Initial 8-K may follow material determination. Amended 8-K with additional details required.

Graph View

Backlinks