The Filing Cabinet

"The Filing Cabinet," which covers compliance with the Dodd-Frank Act and the Sarbanes-Oxley Act, as well as other regulatory action from the Securities and Exchange Commission, executive compensation, and shareholder activism, is written by CW staff writer Joe Mont. Mont welcomes questions, comments, and statements from readers on SEC filing matters and will address them here when appropriate. Readers can contact him at joe.mont@complianceweek.com.

CFTC Commissioner Blasts Dodd-Frank Rulemaking

May 23, 2012

The objective in implementing the Dodd-Frank Act "should be compliance, and not enforcement" says Scott O'Malia, commissioner of the Commodity Futures Trading Commission. Commercial firms utilizing the futures and swaps markets to mitigate risk "should be focused on managing that risk, and not on the risk that they will take a misstep into a regulatory trap."
 

Chipotle Hiring Probe Deepens

May 23, 2012

Fast food chain Chipotle has disclosed that the U.S. Attorney for the District of Columbia is also investigating possible criminal securities law violations related to employee work authorization verification compliance and related disclosures. On May 17th, the company was also subpoenaed by the SEC on allegations related to a crackdown on undocumented workers.
 

Proxy Advisers Urge Walmart Ousters

May 22, 2012

Walmart's June 1 meeting with shareholders is shaping up to be a battleground, with major shareowers and proxy advisory boards calling for the removal of CEO Michael Duke and other directors.
 

SEC and FINRA Drawn Into Facebook Fiasco

May 21, 2012

In the wake of trading glitches that hampered Facebook's much-anticipated IPO, NASDAQ has announced that it will work with the Securities Exchange Commission and the Financial Industry Regulatory Authority on a plan that could include financial restitution for those whose orders went unfilled.
 

CFTC Could Amend Aggregation Requirements

May 21, 2012

The Commodity Futures Trading Commission has proposed rulemaking that would modify aggregation provisions for limits on speculative positions. Those with an ownership or equity interest in an entity (financial or non-financial) of between 10 percent and 50 percent would be able to keep their positions separate and avoid hitting contract limits.
 

Oxfam America Sues SEC Over Missed Dodd-Frank Deadline

May 17, 2012

Oxfam America is suing the SEC over delays in implementing a provision of the Dodd-Frank Act that requires the disclosure of payments from oil, gas, and mining companies to foreign governments. The SEC proposed a rule on the issue in December 2010, but has not finalized it. The deadline set by Dodd-Frank was April 17, 2011. More inside.
 

PFAC Pushes Changes to Proxy Distribution Fees

May 17, 2012

The Proxy Fee Advisory Committee, formed by the New York Stock Exchange, is looking to change, and potentially reduce, the fees paid by public companies to banks and brokers for the distribution of proxy materials to shareholders who hold their stock in street name.
 

Hearing Will Examine Regulator Settlements

May 16, 2012

Are federal financial regulators too quick to settle cases? Citing a judge's decision to throw out a $285 million settlement between the SEC and Citigroup Capital Markets, the House Financial Services Committee will hold a hearing on Thursday to examine the settlement practices of federal financial regulators.
 

Sentencing Commission Revises Guidelines

May 16, 2012

The U.S. Sentencing Commission has proposed amendments to its federal sentencing guidelines regarding securities fraud, mortgage fraud, and institutional fraud, as mandated by the Dodd-Frank Act. The changes would increase penalties for insider trading and other offenses. Details inside.
 

Big Banks Issued New Stress Test Guidance

May 15, 2012

Last week, banking regulators issued new stress test guidance—separate from requirements emerging from the Dodd-Frank Act and the Federal Reserve Board's capital plan rule—for banking institutions with more than $10 billion in assets. Among the suggested approaches are integrating a stress testing framework into the business lines and having it reviewed by the board of directors.
 

FSA Delays Its Recovery and Resolution Plan

May 15, 2012

The U.K.'s Financial Services Authority has delayed until fall the release of final rules that would require large banks to develop appropriate recovery plans and resolution packs in the event of insolvency. The agency said it is delaying the rules as it awaits an expected directive by the European Commission on the matter. Details inside.
 

New E-mail System Required for Non-Public IPO Statements

May 14, 2012

Once limited to paper filings or writable CDs, emerging growth companies looking to take advantage of confidential draft registration statements made possible by the JOBS Act will now need to use a new SEC-secure e-mail system. Details inside.
 

JPMorgan's $2B Derivative Gamble now on SEC Radar

May 11, 2012

JPMorgan's $2 billion loss from bets on "synthetic credit" is renewing the debate over how much new regulation of Wall Street is needed to rein in overly risky practices. Now the SEC has announced an investigation, and Volcker Rule proponents are calling for fewer exemptions in the rule for hedging activities. More inside.
 

Latest Round of OFCCP Corporate Scheduling Announcement Letters Comes With New Twist

May 11, 2012

The Office of Federal Contract Compliance Programs has begun sending out its next wave of Corporate Scheduling Announcement Letters, notifying as many as 2,000 federal contractors and subcontractors of possible upcoming compliance evaluations. But this time around, the OFCCP is switching things up a bit. Details inside.
 

Crowdfunding Portals Readied for Risk Disclosure and Solicitation Rules

May 10, 2012

The SEC has yet to create a registration process for crowdfunding intermediaries. Nevertheless, with rulemaking well underway, funding portals are now learning more about rules meant to prevent investment advice, solicitations, and sugar-coating of potential investment risks. Details inside.
 

Lawsuit Looks to Ground High-Flying Chesapeake Execs

May 10, 2012

A lawsuit filed last week against Chesapeake Energy is trying to clip the wings of its high-flying executives. The suit claims that the embattled company may have under-reported the cost of corporate jet travel by executives and directors and their families by as much as $10 million. More details inside.
 

Report: Fraud Loss at $3.5 Trillion Globally

May 10, 2012

The Association of Certified Fraud Examiners' report on global fraud finds that losses resulting from fraud cost companies around the world $3.5 trillion annually. Other findings: The average fraud takes place over a year and a half, the top detection method is through insider tips, and in half of all cases no losses are recovered. More report results inside.
 

SEC Answers More JOBS Act Questions

May 09, 2012

The Securities and Exchange Commission issued another round of answers to "frequently asked questions," clearing up some of the ambiguity of what types of companies can qualify as "emerging growth companies," established by the JOBS Act. It also attempts to clear up questions about filing requirements for EGCs.
 

ERC Report: Compliance and Ethics Programs Deserve More Recognition

May 03, 2012

New research from the Ethics Resource Center finds that the U.S. Sentencing Guidelines pose many challenges that may actually create disincentives to build robust ethics and compliance programs. The ERC has assembled an advisory group to help mitigate those challenges and has called for a review of the guidelines. Details inside.
 

Medicare Fraud Strike Force Charges Record 107 Individuals for False Billing

May 03, 2012

A nationwide takedown by the Medicare Fraud Strike Force has resulted in charges against a record 107 healthcare professionals for their alleged participation in Medicare fraud schemes that collectively resulted in approximately $452 million in fraudulent billing--the highest amount of false Medicare billings in a single takedown in the strike force's five-year history. More details are inside.
 

Murdoch Blasted for Misconduct

May 01, 2012

The British Parliament has published its final report on the phone-hacking scandal at News Corp., a blistering critique that calls media mogul Rupert Murdoch "not a fit person" to lead the $33 billion conglomerate. The committee investigating the mess also said Murdoch encouraged a culture of willful blindness to the misconduct happening at the company. More inside.
 

SEC Charges Former CalPERS CEO With Fraud

April 30, 2012

The SEC has filed a lawsuit against a former chief executive of the $235 billion California Public Employees' Retirement System, the nation's largest public pension fund. The suit charges Federico Buenrostro and a friend with scamming an investment firm into paying $20 million in fees as part of the pay-to-play scandal involving pension funds and placement agents. More details inside.
 

EEOC Issues New Guidance on the Use of Criminal Records

April 26, 2012

The Equal Employment Opportunity Commission issued new guidance clarifying how the use of criminal background records for employees or applicants could violate discrimination rules. The guidance also lays out the distinction between the use of arrest records and of conviction records. Details inside.
 

Walmart, in Damage Control Mode, Appoints Global FCPA Head

April 25, 2012

Walmart shifted into full damage control mode last week, following allegations of a massive bribery and corruption campaign at its Mexico operations. It has issued a statement on the charges and announced it will appoint a global FCPA compliance chief along with making other "enhancements" to its FCPA compliance practices. Details inside.
 

Banks Get Two-Year Grace Period for Volcker Rule Compliance

April 20, 2012

The Federal Reserve Board issued a statement clarifying that banks will have two years after the effective date of the Volcker rule before regulators will begin enforcing it. The statement was aimed at calming fears that banks would need to be in compliance by July 21, when it is slated to take effect.
 

SEC Releases Study on Cross-Border Scope of Private Rights of Action

April 20, 2012

The staff of the Securities and Exchange Commission has published its study analyzing the effects of Morrison v. National Australia Bank on cross-border private securities litigation, as mandated by the Dodd-Frank Act. More details on the study are inside.
 

Financial Services Committee Takes Aim at Dodd-Frank

April 18, 2012

The House Financial Services Committee is considering legislation that would reverse a Dodd-Frank Act provision that gives the Federal Deposit Insurance Corp. authority to provide funds to failing banks and one that provides funding for the newly created Consumer Financial Protection Bureau. More details inside.
 

CFTC, SEC Finalize 'Swap Dealer' Definition Rule

April 18, 2012

The Commodity Futures Trading Commission and the SEC have adopted long-awaited final rules that clear up who will qualify as swaps dealers and as major swaps participants. Firms that trade more than $8 billion in swaps over a 12-month period will be designated as swaps dealers, which will subject them to additional regulations. Details on the final rules are inside.
 

Towers Watson Analysis: CEO Pay Showed a Moderate Increase in 2011

April 18, 2012

Compensation for chief executive officers at the nation's largest companies showed only a moderate increase in 2011, despite improved financial results, according to a recent analysis from global professional services firm Towers Watson. More details on the analysis are inside.
 

SEC Promises Better Rulemaking Efforts

April 17, 2012

SEC Chairman Mary Schapiro told Congress last week that her agency will redouble efforts to perform cost-benefit analyses of the various rules the SEC adopts, although she also defended the agency from criticism that it has done a poor job of such analysis in the past. Foremost, she said, the SEC's risk analysis experts will get involved in rulemaking earlier in the process.
 

SEC to Gather Preliminary Comments on JOBS Act

April 12, 2012

More JOBS Act news: The SEC also announced it is accepting a preliminary round of comments from the public to hear general views and concerns about the recently passed law. It's just the second time the Commission called for comments before proposing any rules, a move it first made shortly after the Dodd-Frank Act was passed into law.
 

SEC Publishes FAQs on the JOBS Act

April 12, 2012

The SEC has released more guidance on the confidential submission of registration statements, newly permitted under the JOBS Act. The feedback, issued in FAQ form, clears up questions such as whether the drafts need an auditor's signature and when the filings will be made public. A summary of key clarifications is inside.
 

SEC Forms New Investor Advisory Committee

April 10, 2012

The SEC has announced the formation of a new Investor Advisory Committee, a requirement of the Dodd-Frank Act, to advise the Commission on investor interests. The 21-member group includes investor advocates such as Damon Silvers, associate general counsel for the AFL-CIO, and other influentials. A full list of members is inside.
 

FTC Issues Final Privacy Report

April 06, 2012

In addition to the Obama Administration standards, the Federal Trade Commission released its own long-awaited report on protecting consumer data, giving Corporate America a framework of acceptable practices. In the report, the FTC urges companies to adopt a "do-not-track" list, build privacy protections into the product-development stage, and do more to promote data accuracy. More details inside.
 

SEC Guidance on Submitting Non-Public Registration Statements

April 05, 2012

Attention all you pre-IPO companies eager to take advantage of the compliance loopholes in the new JOBS Act: The SEC has published guidance on how to submit a confidential registration statement for a non-public review by SEC staff. Submissions will remain non-public until 21 days before a company goes on a road show to raise investor interest.
 

Financial Stability Oversight Council Approves Non-Bank Designation Rule

April 05, 2012

Non-bank financial companies are one step closer to finding out how federal regulators might classify them as systemically important financial institutions. The Financial Stability Oversight Council has issued a final rule and interpretive guidance describing the criteria that it will use to determine which firms may pose a risk to the financial system and are subject to new regulations. Details inside.
 

ISS Establishes New Feedback Review Board

April 04, 2012

Proxy advisory firm ISS has announced the establishment of a new Feedback Review Board in hopes of providing more transparency on its processes and judgments. The new FRB is designed to serve as a conduit for investors, issuers, and various market constituents to communicate with ISS. More details inside.
 

Survey: Power Shifting From Law Firms to Internal Legal Departments

March 30, 2012

A shift in influence is going on from outside law firms to in-house legal departments, according to a recent survey of in-house counsel by the Association of Corporate Counsel. Companies are turning less frequently to outside counsel to handle legal matters. The survey also finds that budgets for internal legal departments climbed 18 percent last year.
 

FSA Scolds Financial Firms for Lacking Anti-Bribery Controls

March 29, 2012

Despite a long-standing U.K. regulatory requirement to mitigate the risks of corruption and bribery, most financial firms still have work to do to put effective controls and systems in place, according to a recent survey by the Financial Services Authority. About half of the firms the regulator surveyed hadn't adopted proper risk-assessment processes.
 

Facebook Berates Employers for Invading Employees' Online Privacy

March 26, 2012

In response to a slew of reports about employers seeking to gain access to the Facebook profiles or private information of employees and prospective hires, Facebook itself recently expressed its staunch disapproval of the practice—even threatening legal action. More details inside.
 

SEC, European Regulators Tighten Oversight With MOU

March 23, 2012

The SEC has forged an agreement with securities regulators in Europe and the Cayman Islands to work together and share more information, as part of a long-term strategy to improve the oversight of regulated entities that operate across national borders.
 

Towers Watson Analysis: Say-on-Pay Support Tied to Performance

March 23, 2012

High executive compensation may not be the only factor tied to low say-on-pay support. Poor performance appears to be a significant factor, as well, according to analysis from global professional services firm Towers Watson. More details on the analysis are inside...
 

Senate OKs Governance Rollback With Crowdfunding Caveat

March 22, 2012

In an election-year maneuver aimed at letting private businesses tap into public markets without the usual regulatory oversight, the Senate passed the JOBS (Jumpstart Our Businesses Start-ups) Act on Thursday, 73-26. The catch: senators did include amendments to rein in "crowdfunding," which means the House must vote again on the amended bill.
 

Governance Rollback Bill Remains in Flux

March 21, 2012

The Senate voted Tuesday to keep alive the sweeping governance rollback legislation passed two weeks ago by the House—and then, true to the chamber's usual form, saw the bill's overall progress stall amid partisan bickering. Democratic leaders now say a final vote on the rollback bill could come later this week.
 

SEC Responds to First Batch of No-Action Letters

March 19, 2012

The Securities and Exchange Commission has issued its first series of responses to several no-action requests by public companies seeking to exclude shareholder proposals from the companies' proxy statements. The SEC did grant the requests from several companies, but told others (with some clues on its thinking) to let the resolutions go into the proxy.
 

Senate Continues Debate on SOX Rollback Legislation

March 19, 2012

The Senate will continue debate this week on whether to roll back corporate governance obligations for a large swath of companies planning to go public, despite criticism that the measures will undo a decade's worth of progress to improve financial reporting. Amendments were proposed last week capping eligibility for "emerging growth company" exemptions at $350 million in annual revenue. More inside.
 

Senate May Shrink Scope of Push to Roll Back SOX

March 16, 2012

Senate Democrats are moving to revise legislation that would roll back governance obligations for newly public companies, amid an outcry from investor activists. Sen. Carl Levin, D-Mich., introduced amendments Thursday that would define "emerging growth companies" as those with less than $350 million in annual revenue—not the $1 billion figure passed by the House last week. But those emerging growth companies would still be exempt from Section 404(b) of the Sarbanes-Oxley Act.
 

Class-Action Settlements Decline to Record Levels

March 16, 2012

The number of settlements in class-action securities lawsuits dropped to a 10-year low in 2011, with the median and average settlement price also well below historical norms. According to a report by Cornerstone Research, 65 cases reached court-approved settlements in 2011, amounting to $1.4 billion in total funds.
 

Survey: Compliance Officers in Financial Industry Stretched to the Limit

March 14, 2012

Compliance officers in the financial services industry are under severe strain to keep pace with regulatory change. A study by Thomson Reuters found that 84 percent of compliance officers in the industry expect to handle more regulatory information in 2012, even as their capacity to handle it is decreasing. More survey details inside.
 

SEC Commissioners Elaborate on Whistleblower Program

March 09, 2012

As aggressive as the SEC has been in pursuing those accused of violating federal securities laws, expect enforcement to intensify, thanks to the Office of the Whistleblower. That was the message shared by SEC commissioners during its annual SEC Speaks conference recently in Washington, D.C. Details inside.
 
 Subscribe to the RSS for this page  [view all our RSS feeds here]

Compliance Week Podcasts ...

Every week we chat with leading thinkers in compliance, auditing, risk management, public policy and more. These short (10-15 minutes) interviews are free to all. Follow Compliance Week podcasts on iTunes.

Compliance Week LinkedIn Group

Compliance Week now has a companion group on LinkedIn, where members can network and discuss the compliance and governance news of the day. Open to all compliance professionals, free to join.

Survey of the Week


Deloitte is conducting their annual Look Before You Leap: Managing Risks in Global Investments survey to better understand the approaches companies are taking to address compliance and integrity-related risks in emerging markets. 

Thought Leadership

The Risk Intelligent CCO
Sponsored by Deloitte

FCPA Compliance
Sponsored by Kroll Advisory Services

Upcoming Webcasts

ERP Security "Health Check"
Sponsored by ControlPanel GRC

Financial Continuous Monitoring
Sponsored by Infor

Event of the Week

World Class Financial Assurance
Sponsored by Infor