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Capital Markets, Professional Perspective - Silence Is Golden: No Liability for Failure to Disclose Future Trends Under Rule 10b-5(b)
In rejecting an investor's bid to hold Macquarie Infrastructure liable for failure to disclose information required by Item 303 of SEC Regulation S-K, 17 C.F.R. § 229.303(b)(2)(ii) (2022), the Supreme Court in Macquarie Infrastructure Corp. v. Moab Partners, L.P., LP, 144 S. Ct. 885, 218 L. Ed.2d 214 (Apr. 12, 2024) resolved a circuit split and confirmed “pure omissions” are not actionable. The Court in its succinct April 12, 2024, opinion declined to address wider-ranging arguments explored during oral arguments, yet provided another arrow in the quiver of defense counsel—one that may be increasingly important to companies navigating evolving ESG and climate disclosure regimes across multiple international jurisdictions. Conversely, the Court's decision foretells litigation to come as half-truths—“representations that state the truth only so far as it goes, while omitting critical qualifying information"— remain actionable.
Divided SEC Approves PCAOB’s Quality Control Standard
The Securities and Exchange Commission (SEC) on September 9, 2024, voted 3-2 to approve the Public Company Accounting Oversight Board’s (PCAOB) new quality control (QC) standard that imposes a combination of principles-based and prescriptive requirements to make sure that audit firms have a robust QC system to better protect investors.
Regulatory Issues of Social Media
Today most companies perceive social media as a beneficial way to advertise their brands and increase their web presence. They also view social media as a way to enhance their relationships with customers and clients, recruit new employees, make corporate announcements, and acquire information regarding customer preferences. Companies are increasingly mindful of the potential benefits of using social media for marketing, recruiting new employees, connecting with clients, and effectively making announcements to a vast audience in a cost-effective manner. Of course, the potential benefits of social media come with costs, including potential legal liabilities. Many companies may not be fully cognizant of the legal issues that arise from the use of social media in the workplace, in the marketplace, and in litigation. This paper explores the use of social media in these three arenas. First, what issues emerge from employees using social media and employers attempting to regulate such use? Employers and their counsel need to understand employee privacy rights as well as the risk that overly broad social media restrictions could run afoul of worker protections under the National Labor Relations Act concerning employee discipline. Second, what limitations exist on companies using social media for commercial purposes? Public companies face SEC restrictions on disclosures made through social media. Public and private companies deal with FTC rules on advertising and a host of laws addressing trademark protection. Finally, how does the use of social media impact litigation? Companies in litigation must be prepared to address the preservation of social media content, discovery of social media, and the potential misuse of social media in jury trials.
SEC FINHUB - The SEC's "Strategic Hub for Innovation and Financial Technology"
From the website: "As financial technologies, methods of capital formation, market structures, and investor interfaces continue to evolve, FinHub will play an important role in facilitating the SEC’s active engagement with innovators, developers, and entrepreneurs. In addition to being a resource for information about the SEC’s views and actions in the FinTech space, FinHub is also a forum for engaging with SEC staff..." Hat tip to Ms. Cheryl Tangen for the link.
The SEC Provides an Opinion Letter Regarding Blockchain Settlement Service for Public Shares
Concerns blockchains and Clearing Agency Registration Under Section 17A(b)(1) of the Securities Exchange Act of 1934.