john coates financial disclosure

Nothing in law suggests that uncertainty, however reasonable, legally forbids rulemaking. EPA has authority over private companies, while the Commissions proposed rule covers only public companies. When Congress passed the PSLRA, the path to becoming a public company was fairly simple and standardized. Anyone who argues that the Commission should leave the job of climate disclosure to the EPA has to have an answer to how the EPA could possibly protect US investors with information about the large amount of activities of US public companies that are located beyond the reach of the EPAs jurisdiction. It is true that many companies are spending money to do thisfurther evidence of the importance of the information. SEC Issues Guidance in Light of Ongoing Surge in SPAC IPOs The PSLRA was passed by Congress in 1995 to stem what was considered to be a rising tide of frivolous or unwarranted securities lawsuits aimed at operating companies filing routine annual and quarterly reports under the Exchange Act. Introduction. This demonstrates that the broader direction was consciously added during the legislative process. Immediate Disclosure of Body-Worn Cameras Related to Death or Serious Mar. SEC.gov | John Coates Regardless, as long as the disclosures are fairly designed for the protection of investors, a factual assessment of the kind commonly delegated by Congress to regulatory agencies, they would fall within the clear limiting principle of that law. View the profiles of people named John Coates. If a major shift in owners is in fact occurring in most or all SPACs as they progress through a de-SPAC, it is the de-SPAC as much as any other element of the process on which we should focus the full panoply of federal securities law protections including those that apply to traditional IPOs. In closing, I want to make three final points. Regulation -- the Investment Company Act is one of the most successful disclosure laws . Rec. With that overview, I would like to focus on legal liability that attaches to disclosures in the de-SPAC transaction. 2020) (breach of duty of candor due to failure to disclose conflict of interest in merger); Chester County Emp.s Ret. The Helpful Hand Guiding Brisbane's Olympic Victory. Overturning this rule as unauthorized on that basis would wipe out most of the Commissions disclosure rulebook. If arguments of that kind could limit rulemaking authority, the Commission could never have adopted any disclosure rules. The fact-finding for this rule, and the financial and accounting expertise on which it is based, is in keeping with the long tradition in which the Commission and its staff have applied expert knowledge about general risk/return, accrual and related concepts to an array of different source of risk and potential liability. All those sources here align with the 1933 Acts plain, ordinary meaning, and so confirm the above conclusions. Harvard Law School Professor John C. Coates spoke at a briefing on Oct. 30 in Washington, D.C., to urge the Securities and Exchange Commission to require publicly traded companies to disclose their political spending. If the Commission or staff pursue that route, however, it would be important to keep the practicalities of SPACs in mind, in addition to other aspects of SPAC structures, relative to conventional IPOs as well as to other forms of achieving dispersed ownership, such as direct listings. Where and how can disclosures be aligned with information companies already use to make decisions. The United States Securities and Exchange Commission has focused increasingly on SPACs in recent months, and is particularly concerned with conflicts of interest that incentivize a SPAC's sponsors, directors, officers, and affiliates to close a de-SPAC transaction even when doing so is not in the best interests of SPAC shareholders, and whether [5] Initial investors also commonly obtain warrants to buy additional stock as at a fixed price, and sponsors of the SPAC obtain a promote greater equity than their cash contribution or commitment would otherwise imply and their promote is at risk. This statement creates no new or additional obligations for any person. Harvard Law's John Coates, Now at SEC, Reveals Consulting Income Even if some may find resistance to the rule (or new regulation generally) to be appealing from a policy standpoint, doing that here has no basis whatsoever in the statutes text.. Cost-Benefit Analysis of Financial Regulation: Case Studies and Women, Influence & Power in Law UK Awards 2023, Legalweek Leaders in Tech Law Awards 2023, WORKERS COMPENSATION ATTORNEY - Hartford, CT, Offering an Opportunity of a Lifetime for Personal Injury Lawyers, What Does Your Business Agreement Really Mean? SPACs, IPOs and Liability Risk under the Securities Laws And to be yet more clear, the Commission has not simply expanded or added to required disclosures over timeit has cut, compressed, and consolidated as well, in step with the needs of investors over time. As discussed in Point I, critics of the rule cannot plausibly attack premise one. But companies will not be limited by the rule itself in how they and their investors respond to climate change. People often think of mandatory disclosure in a way that suggests that there is nothing more than an on/off switch between mandatory and voluntary disclosure. John Coates may be the most influential figure in the Olympic movement after I.O.C. John C. Coates is the Acting Director of the SEC's Division of Corporation Finance. But beyond academic research, hardest for any neutral observer to challenge as evidence of the financial risks related to climateand the reasonableness of climate-related financial disclosures to protect investorscomes from public companies themselves. [15] The PSLRAs exclusion for blank check companies overlaps the exclusion for penny stock issuers. The legal authorities cited by the Commission in the proposing release are the conventional authorities for disclosure rules over nearly a century. General Motors announced it plans to sell only electric passenger vehicles by 2035. Although Congress gave the Commission power to conduct temporary testing programs to evaluate the effectiveness of disclosures in the Dodd-Frank Act, in neither that statute nor the original 1933 and 1934 Acts did it suggest the Commission use polling or surveys to establish the content of disclosures appropriate to protect investors. The Commissions authority is plain in its organic statutes, legislative history, in long-standing precedent, in both court decisions and its own rules, and repeatedly accepted by Congress through amendments of the statutory bases for those rules. John Coates - Keynote Speaker | London Speaker Bureau Statement (PDF) . Authority for disclosure under the 1934 Act addressed more than the need for protection of the initial investor acquiring securities. The SEC should help lead the creation of an effective ESG disclosure system so companies can provide investors with information they need in a cost effective manner. And she is right: environmental compliance costs and risks from non-compliance have been required by the basic business description line item in Regulation S-K, which ultimately traces back to Schedule A in the 1933 Act itself, and MD&A and risk factor requirements that would encompass known climate-related risks and uncertainties were first adopted in 1968. This heightened scrutiny for a companys first introduction to the public market applies in other contexts as well such as a companys first registration of a class of securities under the Securities Exchange Act of 1934 or an A/B exchange offer. 'What Are We Fixing? SEC Regulation of ESG Disclosures - The Harvard Law School Forum on The legislative history includes statements that the safe harbor was meant for seasoned issuers with an established track-record.[16]. During my tenure as Acting Director of Corporation Finance, I experienced firsthand the unwavering commitment of the SEC staff, and I look forward to serving in a new role as the Commissions General Counsel., STAY CONNECTED Currently, EPA does not purport to require disclosures about greenhouse gas emissions from facilities located outside the US, even if they are owned by US companies. Our existing system contains some mandatory ESG disclosure requirements (e.g., disclosure of how a companys board considers diversity in identifying director nominees). John Coates, acting director of the SEC's Division of Corporation Finance, similarly stated in a recent speech that the "SEC should help lead the creation of an effective ESG disclosure system so companies can provide investors with information they need in a cost effective manner," noting in particular the task of adapting existing rules and It is also not a rule the EPA or any other regulatory agency has adopted or could legally adopt. See also Rodriguez v. Gigamon Inc., 325 F. Supp. John Coates Named Acting Director of the Division of Corporation Finance FOR IMMEDIATE RELEASE 2021-19 Washington D.C., Feb. 1, 2021 The Securities and Exchange Commission announced today that John Coates will serve as Acting Director of the agency's Division of Corporation Finance. Asbestos-related disclosure is a great example. The same could be said of most existing disclosure requirements. Indeed, the actual proposed rule requires disclosure about subject matters long covered by indisputably authorized disclosure requirementsthe first point made by Commissioner Peirce in her dissent. About ten percent of SPACs have liquidated between 2009 and now.[6]. John Coates Profiles | Facebook 2021 Financial Disclosure Statements. 1 The housing and financial crises of 2008 led to the Dodd-Frank Act, 2 which restructured the financial regulatory agencies, mandated more than 200 new rules, and required changes to many older rules. [2] Item 407(c)(2)(vi) of Regulation S-K. (Disclosure required of whether, and if so how, the nominating committee (or the board) considers diversity in identifying nominees for director and if the nominating committee (or board) has a policy with regard to the consideration of diversity in identifying director nominees, describe how the policy is implemented, as well as how the nominating committee (or the board) assess the effectiveness of its policy.), STAY CONNECTED So, instead, like a cuckoo putting its eggs into anothers nest, critics have resorted to mischaracterizing the proposal, and inventing their own, fictional rulenot actually proposedto attack premise two, and claim the Commission lacks authority for their fictional new rule. 3 of 1970, nowhere mentions the Securities and Exchange Commission. Numerous other disclosure requirements adopted by the Commission over the years are similar in applying to specialized areas of expertise primarily existing outside the agency. Mar. Would it have resulted in more timely, clear and useful information for investors about asbestos manufacturers, sellers and insurance companies? In the last 25 years, companies have been able to raise increasingly large sums privately, and even provide some liquidity to shareholders while remaining private. John, Joel. They argue that because the fictional new rule requires disclosure of environmental impact, the Commissions authority was silently removed when Congress authorized the Environmental Protection Agency (EPA) to address that impact. Those involved should be accountable to relevant constituencies, including investors and companies. The creation of an entire new agency (the Commission) to implement and enforce the laws. 2021 Financial Disclosure Statements | Arizona Secretary of State - AZ SOS The purpose of the disclosure was also to protect markets and market pricing, and improve the resulting allocation of capital. John Coates: The Helpful Hand Guiding Brisbane's Olympic Win - The New The status quo is costly for companies, and increasingly so over time. The directive consolidated authorities and activities spread across six different departments and agencies, ranging from the Department of Agriculture to the Atomic Energy Commission. The requirements have included disclosures about risks and uncertainties generally, and of information both qualitative (business segments; competitive conditions; management, environmental and other litigation; and contracts) and quantitative (mineral reserve estimates, loan performance statistics, coverage ratios, material transactions, and compensation). In addition to being limited and calibrated to U.S. public companies, the rule does not require disclosure related to non-investor impacts. from Harvard University. John C. Coates, Cost-Benefit Analysis of Financial Regulation: Case Studies and Implications, 124 Yale Law Journal 882 (2014-2015). The Commissions proposed rule relies upon a traditional role for regulatory agenciesto find facts and use the facts so found to implement Congresss direction to require disclosures for a stated purposethe protection of investors. Nor does the proposal purport to be authorized by a newly discovered power in the securities lawsthe power is disclosure, as it has been for nearly a century. 1 Twitter 2 Facebook 3RSS 4YouTube SPAC shareholders typically have a vote on the so-called de-SPAC transaction, and many investors who purchased securities in the first stage SPAC either sell on the secondary market or have their shares redeemed before or shortly after the de-SPAC. Tokyo 2020: John Coates response to Annastacia - dailytelegraph Many ESG-related issues are similar to ones we have faced before. One of the primary purposes of the 1934 Act was to augment the 1933 Act by giving the Commission authority to require ongoing reports by companies whose securities were traded on stock exchanges. 2003) (holding that statements encompassing forward-looking and present or historical components were not entitled to safe harbor protection where the [c]omplaint alleges that the Defendants had no basis for their optimistic statements and already knew (allegedly) that certain risks had become reality and notably where plaintiffs adequately pled scienter). In adopting mandatory risk factor disclosures, for example, which had previously been made by many companies, but not by all; in adopting disclosure requirements for derivative contracts, which many companies had disclosed in detail, but others had not; and in codifying thresholds for disclosure of environmental liabilities, which many companies had been previously disclosing, but not all, or consistently, or reliably. The title of the 1933 Act states its purpose as creating a regime of full and fair disclosure.. I am unaware of any relevant case law on the application of the IPO exclusion. For years, asbestos-related risks were invisible, and information about asbestos would likely have been called non-financial. Over time, those risks went from invisible to visible to extremely clear, and clearly financial. The proposed rule does not itself restrict or limit environmentally harmful activity. Proposal on Climate-Related Disclosures Falls Within the SEC's Authority Companies either do or do not have property, plant and equipment in flood plains. In the context of legislation that does not implicate fundamental rights or a suspect class, faithful enforcement of the Constitution requires a court to hew as closely as possible to the norm of faithful agency by enforcing the text unadulterated by judicial tweaking.. Reflected in the PSLRAs clear exclusion of initial public offerings from its safe harbor is a sensible difference in how liability rules created by Congress differentiate between offering contexts. Liability risk is an important feature of the conventional IPO process. The claim that the proposed rules requirements are so unrelated to investor protection as to altogether fall outside the Commissions obligation to specify financial risk disclosures is without merit. "The staff at the Securities and Exchange Commission are continuing to look carefully at filings and disclosures by SPACs and their private targets," John Coates, the SEC's acting director of corporate finance, said in an April 8 statement . Even as to the financial system, it does not set out comprehensive climate policy. No case is the contrary, and critics of the Commissions proposed rule cite none. 23, 2013) (citing Sawant v. Ramsey, 3:07-CV-980 VLB, 2010 WL 3937403 (D. Conn. Sept. 28, 2010) (holding that otherwise forward-looking statements that contain misrepresentations of current facts are not protected by the safe harbor provision of the PSLRA or the bespeaks caution doctrine); In re Nortel Networks Corp. Sec. What disclosures do investors need to make informed investment and voting decisions? Coates, Lindsey. Congress created the Commission as an expert agency with the capacity to address significant problems affecting the nations securities markets. John F. Cogan, Jr. Although some are reluctant to consider legislative history or expert contemporaneous commentary in interpreting statutes, it is useful to do so briefly here for a simple reason.

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