Mark Cuban argues that U.S. SEC in-house trials hurt defendants’ rights

Publisher: Reuters
Author: Sarah Lynch

Dallas Mavericks owner Mark Cuban took a swipe at the U.S. Securities and Exchange Commission on Tuesday after he filed a court brief which criticizes the agency’s in-house trials as being unconstitutional.

The amicus brief, filed in U.S. Court of Appeals for the Eleventh Circuit, backs the legal arguments of Charles Hill, a real estate developer who was accused by the SEC of insider-trading and is fighting to have his case moved from the agency’s in-house court to a federal court.

Cuban has been a vocal critic of the SEC, after a federal jury cleared him of insider-trading charges in 2013 following a years-long battle.

The flamboyant billionaire has become one of the most high-profile voices to wade into a brewing legal debate over the fundamental fairness of the SEC’s in-house trials – a venue that many say wrongfully deprives  defendants’ rights to protections they would get in a federal court.

“As a businessman who has faced down a misguided SEC enforcement litigation, Mr. Cuban offers a front-row perspective on the practical importance of the legal and constitutional issues at stake in this litigation,” says the brief, which was written by Cuban’s attorneys at Brown Rudnick LLP.

Many defendants over the past year have tried and failed to convince federal judges to move their trials to courts.

For full access to the article, please click here.

By : Securex /September 18, 2015 /Uncategorized /0 Comment Read More

Judge orders U.S. SEC to expedite resource extraction rule

Publisher: Reuters
Author: Sarah Lynch

A federal judge has ordered the U.S. Securities and Exchange Commission to fast-track a final rule requiring oil, gas and mining companies to disclose payments to foreign governments, after a human rights group complained the regulator was dragging its feet.

In a Sept. 2 ruling, Judge Denise J. Casper for the U.S. District Court for the District of Massachusetts handed Oxfam America a major victory, and told the SEC it will get 30 days to file an “expedited schedule” with the court for how it plans to finalize the rule.

“The SEC is now more than four years past the deadline set by Congress for the promulgation of the final rule,” Casper wrote in her decision.

“The court concludes… that the SEC’s delay in promulgating the final extractive payments disclosure rule can be considered unlawfully withheld.”

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By : Securex /September 04, 2015 /Uncategorized /0 Comment Read More

SEC Rules to Expose Highest Executive Pay Can Be Easily Gamed

Publisher: Bloomberg
Authors: Annie Massa and Anders Melin

When the U.S. adopted a new rule last week forcing companies to show how much more top executives earn than workers, regulators noted there’s leeway.

Academics and activists have spent the time since then figuring out how boards might game the system. The 294-page pay ratio rule “provides companies with substantial flexibility,” while remaining true to the 2010 Dodd-Frank Act that mandated its creation, Securities and Exchange Commission Chairman Mary Jo White said Aug 5. The rule requires public U.S. companies to compare their workers’ median pay with their CEO’s executive pay — including salary, bonus and equity awards — starting with 2017. But getting to that figure can be complicated. So, to ease the burden, the rule lets businesses use statistical sampling to estimate the median, rather than calculating it by tallying their entire payroll. And they only have to do that math at least once every three years.

For boards worried about reporting a big gap in pay, there are also several ways the rule’s flexibility can work to their advantage (an SEC spokeswoman declined to comment):

*Boards can pick the date for their data.

Employers can survey their workforce on any day within the last three months of their most recent fiscal year to define median pay. That may enable companies to exclude many seasonal workers, said Heather Slavkin Corzo, director of the office of investment at AFL-CIO, the largest federation of unions in the U.S. “For a retail company with a Dec. 31 fiscal year-end, the workforce is going to look very different on Oct. 1 than it would on Dec. 23,” she said. United Parcel Service Inc. said last year it expected to hire at least 90,000 seasonal employees to handle a surge in package deliveries around Christmas. Excluding such workers, it employed 435,000 at the end of 2014.

*Companies can omit contractors.

The law lets companies exclude people employed by contractors or other independent entities. That will probably affect the pay ratio for U.S.-based retailers such as Nike Inc. and L Brands Inc. that outsource manufacturing.

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By : Securex /August 19, 2015 /Uncategorized /0 Comment Read More

What SEC’s Proposal “Pay For Performance” Means For Companies Going Forward

Publisher: Forbes
Author: Robin Ferracone

Finally, after five years of waiting, the SEC issued new rules a few weeks go on the link between pay and performance disclosure.

The rules, which are in accordance with Section 953(a) of Dodd-Frank, will require companies to disclose the relationship between compensation “actually” paid to executives and the financial performance of the company measured by total shareholder return (TSR). My colleagues at Farient and I took a closer look at the SEC’s pending pay for performance rule to determine whether these rules are reasonable and what they’ll mean for companies going forward.

The Rules At A Glance

The rule is designed to provide greater transparency and to better inform shareholders voting on the executive compensation plans. The rules require:

  1. An additional table in the proxy report, which includes data on compensation and company performance
  2. An explanation of the data in either a narrative and/or graphical format

Specifically, the table must show compensation data for the CEO and an average for all other NEOs. For the first year the rule is in effect, the SEC will require three years of data; in the second year, four years of data; in the third year and five years of data. Finally, the disclosure must reflect the amount of compensation the CEO and NEOs are “actually” paid.

For full access to the article, please click here.

By : Securex /May 20, 2015 /Uncategorized /1 Comment Read More

When the SEC pays your lawyer for informing on you… Is that a good thing?

Publisher: Forbes
Author: Daniel Fisher

The SEC announced it paid a $1 million bounty to a compliance officer who blew the whistle on his employer, the second such case where the agency has paid a company official charged with rooting out misconduct for bringing evidence of it to the SEC instead.

In its news release, the SEC is careful to note it adhered to rules it developed after the Dodd-Frank Act of 2010 authorized bounties for employees who bring information about securities law violations to the SEC. To avoid obvious conflicts of interest – not to mention potential breach of the attorney-client privilege – whistleblowers who work within a company’s compliance division must first report the suspected wrongdoing to a superior, then wait 120 days before determining nothing will be done about it and going to the SEC.

But is that enough? Some lawyers, as well as the influential New York County Lawyers’ Association, think not. By paying the very people whose job it is to make sure a company is complying with the law for information suggesting it’s breaking it, the government is giving them a strong incentive to sit back, wait 120 days, and try to cash in.

When the SEC was developing the rules for whistleblowers, “a lot of comment revolved around `we can’t have a system that allows in-house counsel and compliance officials, who are tasked to be at the epicenter of problems and solve those problems, to be incentivized to end-run their employer and go to the SEC,’” said Gregory Keating, a shareholder with Littler Mendelson and management representative on the Congressional Whistleblower Protection Advisory Committee.

For full access to the article, please click here.

By : Securex /April 28, 2015 /Uncategorized /1 Comment Read More

The Future of Financial Reporting Part 2: Accounting Quality Model

This is part 2 of an article. For access to part 1, please click here

Publisher: FEI Daily
Author: Leslie Kramer

One initiative that has been moving forward in the US is the development by the SEC of a data mining system called the Accounting Quality Model (AQM), otherwise known as “Robocop.”

So far, XBRL has served as a beneficial tool in helping the SEC’s Division of Enforcement identify accounting fraud cases, and it has also provided useful to the Division of Corporation Finance as a means of improving financial disclosures quality. The downside, however, is that the review process is rigorous, and time and labor intensive.

This is where AQM comes in. The tool, currently in prototype state, works in conjunction with XBRL and is designed to trawl through 10-K filings an trigger automatic alerts when the system detects suspicious or incorrect accounting practices by publicly traded companies. To date, the SEC’s Accounting Fraud Task Force, a group inside the Division of Enforcement, has been one of the earliest adopters of the AQM model.

For more details on AQM’s operational capabilities, please click here.

By : Securex /December 03, 2014 /Uncategorized /0 Comment Read More

The Future of Financial Reporting Part 1

This is part 1 of a two part article. For access to part 2, please click here.
Publisher FEI Daily
Author: Leslie Kramer

Financial executives often decry the amount of information they are being asked to provide regulators each year, with many contending the regulations and methods used for reporting that information have become too burdensome and costly.

The flipside to that argument is that firms that fail to provide transparent and easy-to-understand annual reports may risk losing high-level investors who have become weary of complex company reports that are sometimes too good to be true.

Regulators, too, are continuing to insist companies’ financial reports serve to illuminate rather than cloud a corporation’s true financial health. While much is being done by government entities and advocacy groups looking to improve the way public companies file their 10-Ks and annual reports, the jury is still out on whether any of these changes will eventually take place. One thing that regulators, corporations and investors can all agree on is that the current state of corporate filing needs to be updated. Following the collapse of the tech bubble in the early 2000s and the accounting scandals that ensued at companies such as Enron and WorldCom, the Sarbanes-Oxley Act of 2002 was passed in response to a directive from Congress.

For full details of the article, please click here.

By : Securex /December 03, 2014 /Uncategorized /0 Comment Read More

Data Quality Tools Available for Free from XBRL US

Publisher: XBRL US

The US SEC has begun issuing “Dear CFO” letters to public companies expressing concern over problems in XBRL Filings.

XBRL US’s analysis of XBRL filings show that many filings still contain errors related to the use of the US GAAP Taxonomy.

Accurate XBRL financials can be a challenging proposition due to the complexity of US GAAP reporting.

These errors were identified by running over 15,000 logic rules against every financial filing submitted to the SEC. The rules were developed to identify inconsistencies across filings. However, they will not capture every potential problem in a filing as there may be errors related to completeness, accuracy or other issues that require manual review.

Ultimately your accounting firm, your service provider, and you are best equipped to handle issues that the rules cannot capture.

In order to assist filers establish a base level of consistent quality, XBRL US has developed a set of free data quality tools that provide industry and company-specific information on XBRL filings.

For more information about the free tools, please click here.

XBRL US is a non-profit standard setter dedicated to helping public companies create good quality XBRL data and to encourage the use of XBRL corporate data.

By : Securex /August 12, 2014 /Uncategorized /0 Comment Read More

Cyber Risk: Are Boards the New “Target”?

Publisher: CFO
Authors: :Kevin Kalinich and Michael Becker

According to the Consumer Bankers Association, the recent Target data breach has costs banks more than $200 million. For any public company, a large data breach, such as the Target hack, could be material enough to warrant the filing of a Form 8-K.

On top of the dozens of claims against Target, the board of directors has become a target in the form of shareholder class action litigation – an action taken when shareholders allege that the board of directors has not satisfied its duty of care to manage such exposures.

As a protection against allegations of wrongdoing, Directors and officers can purchase Directors and officers liability insurance policies. However, proactive measures can be taken in order to exercise due diligence in regards to data protection. For full guidance on steps to help maintain financial and brand success by preventing data breaches, please read the full article here.

Give us your thoughts on how to proactively prevent data loss and to mitigate the effects of security breaches if they occur.

By : Securex /April 23, 2014 /Uncategorized /0 Comment Read More

Marketforms Users: Please update your passwords

At Marketforms, we take data security very seriously. We are always monitoring for potential security threats, including alerts and notifications from security vulnerabilities.

April 7, 2014 the OpenSSL Project released an update to address the CVE-2014-0160 vulnerability, nicknamed “Heartbleed.” This serious vulnerability affects a substantial number of applications and services running on the internet, including Marketforms. All Marketforms users should update their passwords as a precautionary measure.

As of Tuesday, April 8 at 15:55 UTC, within one day of public disclosure, all Marketforms certificates and infrastructure have been updated and are no longer vulnerable. This means going forward Marketforms is safe.

Reset Your Marketforms Password
We encourage all Marketforms users to update their Marketforms account passwords. We do not have any evidence that passwords have been compromised, but given the amount of time that this vulnerability was in existence the safest thing to do for your account is to rotate your Marketforms credentials. You can reset your Marketforms password here.

As always, please don’t hesitate to contact us if you have any additional questions or concerns.

Thank you for trusting us with your data.

The Marketforms Customer Support Team

By : Securex /April 17, 2014 /Uncategorized /0 Comment Read More