Articles Posted in SEC

The Foreign Corrupt Practices Act of 1977 (FCPA) prohibits U.S. companies and individuals from offering or paying bribes to foreign officials in order to obtain or retain business advantages. The law applies to conduct occurring both outside and within the United States and broadly covers the use of mail or any means of interstate commerce in furtherance…

The risks presented by artificial intelligence (AI) are becoming an increasing concern for corporate boards as emerging technologies influence business strategy, operations, and long-term planning. At the same time, regulators are closely examining how accurately companies disclose AI-related risks and the mitigation measures being implemented. The U.S. Securities and Exchange Commission (SEC) has already initiated…

Fair and orderly securities markets depend on the accuracy and honesty of information provided to investors. Public companies and individuals involved in securities transactions are required to ensure that all filings and communications are complete, truthful, and not misleading. There is no tolerance under federal securities laws for inaccuracies—whether negligent or intentional. False or misleading…

Before a company can go public, it must file a registration statement with the U.S. Securities and Exchange Commission (SEC). This filing provides potential investors with critical information needed to make informed investment decisions. Investors expect transparency regarding a company’s history, financial condition, market position, and—importantly—its anticipated future performance. Forward-looking statements are designed to address…

What Is Securities Market Integrity? Securities market integrity refers to the fairness, transparency, and honesty of the U.S. financial markets. Following widespread corruption that led to the stock market crash of 1929, Congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934 to curb abusive practices and restore investor confidence. These laws mandate truthful disclosure…

What Is a Mandatory Arbitration Provision? A mandatory arbitration provision requires investors to arbitrate claims arising under the federal securities laws with the issuer of the securities, rather than pursuing those claims in federal court. In the context of an SEC registration statement, this is commonly referred to as an issuer-investor mandatory arbitration provision. According to…

What Are Pay Versus Performance Disclosure Rules? Public companies are required under U.S. Securities and Exchange Commission (SEC) rules to periodically provide transparent disclosures to investors and the public regarding executive compensation, partcularly when compensation is tied to equity awards such as stock and stock options. These requirements are collectively referred to as equity plan disclosure…

Understanding SEC Subpoenas If you work in any area of the securities industry—such as advising investors, issuing publicly traded securities, or even investing yourself—you may one day face the possibility of receiving a subpoena from the U.S. Securities and Exchange Commission (SEC). The SEC has broad authority to regulate the securities markets by issuing rules…

How Has the QSBS Exemption Changed? Recent amendments to Internal Revenue Code Section 1202, introduced under the One Big Beautiful Bill Act, significantly expand the benefits available under the Qualified Small Business Stock (QSBS) tax exemption. These changes apply only to stock purchased on or after July 4, 2025, and they provide increased exclusion limits,…

How is the definition of an accredited investor being expanded? The proposed rule will amend the definition of an “accredited investor” as follows: With regard to individuals, the proposed rule would add the term “spousal equivalent” to the definition of a spouse, and give accredited investor status to individuals: With regard to entities, the proposed…