The SEC has announced that it will vote on whether to adopt rules and forms related to the offer and sale of securities through crowdfunding under Section 4(a)(6) of the Securities Act of 1933, as mandated by Title III legislation. The SEC will also consider whether to propose amendments to Securities Act Rule 147 and Rule 504. Observers are waiting to see if the final rules will reduce the compliance burden on crowdfunding issuers and intermediaries (brokers and funding portals), including financial statement requirements that, in the proposed Rule 201, included audited financial statements for offerings over $500,000.
On Oct. 27 the Department of Education announced the publication of two regulatory packages first proposed earlier this year. The Cash Management regulation (unofficial text available here) includes requirements that institutions give students greater choice about how to receive their student aid and that institutions ensure that students are not charged excessive fees in making direct payments of Federal student aid. The Revised Pay As You Earn (REPAYE) Plan regulations (unofficial text available here) expand income-based repayment options for student borrowers. The new REPAYE plan will be available to borrowers starting December 2015.
On Oct. 22 the FDIC approved the Joint Final Rule on Margin and Capital Requirements for Covered Swap Entities, which was adopted in conjunction with the Office of the Comptroller of the Currency, the Federal Reserve Board, the Farm Credit Administration and the Federal Housing Finance Agency (collectively, the Agencies). The purpose of the rule is to establish minimum margin and capital requirements applicable to registered swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants who enter into non-cleared swaps and security-based swaps. Sections 731 and 764 of the Dodd-Frank Act require the Agencies to adopt such rules to address the increased risk to swap entities and the financial system from entering into non-cleared swaps and security-based swaps. The rule will apply to entities supervised by the Agencies and will become effective on April 1, 2016.
Enforcement & Litigation
The SEC recently announced the results of its enforcement actions in fiscal year 2015. The SEC filed 807 enforcement actions in 2015 (up from 755), with penalties and disgorgements totaling approximately $4.2 billion (up from $4.16 billion). In the release, the SEC highlighted the broad range of misconduct covered, and the various “high impact, first-of-their-kind actions” pursued by the Commission.
The October 2015 edition of the Goodwin Procter Business Litigation Reporter is available. In addition to timely summaries of key cases and other developments in dedicated Business Litigation sessions and related courts nationwide, the current issue features a close look at some of the key issues associated with D&O insurance coverage for government investigations and discuss how to maximize that coverage if an investigation arises.