Securities & Capital Markets

Since the early days of the pandemic, Mintz’s COVID-19 Compliance & Enforcement Defense Task Force has closely monitored and advised clients on the evolving COVID-19 relief programs, including those created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act provided for over $2 trillion in relief funds, which is the largest emergency assistance package in American history. The numerous CARES Act programs have continued to develop through, among other things, the passage of the Paycheck Protection Program and Health Care Enhancement Act, the Paycheck Protection Program Flexibility Act of 2020, and rapidly changing regulatory guidance and FAQs. As one example, the government recently wrestled with whether to make public the list of about 4.6 million entities that received more than $500 billion from the Paycheck Protection Program (PPP) under the CARES Act. After initially refusing to disclose PPP loan recipients, the Small Business Administration and Treasury Department decided to make public the names of entities that received loans larger than $150,000, as well as the dollar range of each loan.

For many U.S. public companies, June 30 is the end of the second fiscal quarter, which means it’s time to evaluate their filer status, with any changes taking effect as of the next fiscal year.

This advisory discusses regulatory and investment community developments related to human capital management and provides suggestions for companies newly focused on HCM.

On May 14, 2020, the Securities and Exchange Commission (“SEC”) approved changes to the NYSE Listed Company Manual to provide a temporary exception to the shareholder approval rules for certain capital raising transactions as a result of the coronavirus (“COVID-19”) pandemic.

The American Securities Association (“ASA”), a financial industry trade association representing regional and small financial services companies, has sued the Securities and Exchange Commission (“SEC”) to prevent the SEC from using the Consolidated Audit Trail (the “CAT”) initiative to gather personal data of retail investors.

Today the Small Business Administration (SBA) issued additional guidance with respect to the “necessity” certification required under the CARES Act in connection with the Paycheck Protection Program (PPP). The relevant guidance appears in FAQ 46, and it is very good news for borrowers who received PPP loans under $2 million (together with PPP loans to affiliates, if any). The SBA, in consultation with the U.S. Department of Treasury, has determined that a safe harbor will apply with respect to SBA’s review of the certification of necessity in connection with respect to such loans. Specifically, “[a]ny borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”

Read about the SEC’s approved changes affecting shareholder approval rules for certain capital raising transactions.

Read about the SEC’s FAQs, released on May 4, 2020, providing guidance on the agency’s COVID-19 order giving certain issuers more time to file disclosure reports.

The coronavirus pandemic continues to have profound effects on the U.S. and global economies. Investor concerns about the impact of COVID-19 and government-imposed restrictions on individuals and businesses have led to unprecedented market volatility. Further material volatility is anticipated. In this environment, publicly traded companies may want to evaluate the adequacy of their corporate defenses to protect their stockholders from such predatory activities.

In what will likely be the first of many, the SEC brought an action against a company for false and misleading press releases related to the COVID-19 pandemic.

This advisory reviews the SEC Division of Corporation Finance’s statement of April 23, 2020, including what forms it covers and how filers can submit typed signatures on documents submitted by email.

This advisory covers the SEC’s April 21, 2020 approval to allow NYSE-listed companies to regain compliance with stockholders equity/market capitalization and minimum price continued listing standards by tolling applicable compliance periods through June 30, 2020 due to COVID-19.

Due to the economic impact of COVID-19, especially on smaller broker-dealers, FINRA will allow small firms more time to pay their Annual Assessment (comprised of the Gross Income Assessment and the Personal Assessment).

This article covers SEC changes, made in response to the COVID-19 pandemic, that give Nasdaq listed companies additional time to regain compliance with certain continued listing requirements regarding the bid price and market value of publicly held shares. Nasdaq Temporarily Extends Compliance Periods for Certain Continued Listing Requirements as a Result of Coronavirus (COVID-19)

Several State Securities Regulators continue to warn investors of investment scams involving COVID-19.

Read about the temporary suspension of NYSE's $15 million minimum market capitalization requirement and shareholder approval rules for certain capital raising transactions.

Read about SEC C&DIs that provide guidance on its COVID-19 Order, which gives certain issuers relief from deadlines as a result of the coronavirus pandemic.

The SEC’s Office of Compliance Inspection and Examinations (OCIE) issued two risk alerts relating to Regulation Best Interest (Reg. BI).