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In this program, we will focus on SEC developments affecting, and practical aspects of preparing for, public companies’ annual meetings and annual reports.

On November 14, 2024, a panel of the U.S. Court of Appeals for the Fifth Circuit affirmed the SEC’s ability to intervene in shareholder proposals under Rule 14a-8 of the Securities Exchange Act of 1934 (“Rule 14a-8 Proposals”).

On November 8, 2024, the U.S. Securities and Exchange Commission (“SEC”) announced a settled enforcement action (the “SEC Order”) against Invesco Advisers, Inc. (“Invesco”), an investment advisory firm, for making misleading statements concerning the company-wide percentage of assets under management (“AUM”) that integrated environmental, social and governance (“ESG”) factors in investment decisions.

In recent months, the Delaware Court of Chancery has decided four significant cases regarding merger agreement earnout provisions.

Welcome to Vinson & Elkins’ Securities and ESG Updates.

On September 16, 2024, the United States Securities and Exchange Commission (“SEC” or the “Commission”) brought charges against Kubient, Inc.’s (“Kubient”) former chairman and chief executive officer (“CEO”) for allegedly fabricating reports that the company had successfully tested its AI-supported software program, causing the company to overstate and misrepresent its revenue in connection with two public stock offerings.

In a pair of orders issued this month, the U.S. Supreme Court signaled plans to provide further guidance in its upcoming Fall term concerning application of the heightened standard for pleading securities fraud claims mandated by the Private Securities Litigation Reform Act of 1995 (“PSLRA”).

For more than a decade, the U.S. Securities and Exchange Commission (the “SEC”) has been able to bring enforcement actions in either federal court or the agency’s internal venue.

E-Trade was considering banning one of its users Keith Gill, known as Roaring Kitty, after he disclosed a significant stock position on social media. To comment on the issue, Rebecca Fike first appeared on CNBC and addressed the legality of publicly sharing stock holdings when followed by millions, which can have a significant impact on the market.

On April 12, 2024, the U.S. Supreme Court unanimously held that, in the absence of an otherwise misleading statement, a failure to disclose information required by Item 303 of Regulation S-K (“Item 303”[i]) does not support a private action under Section 10(b) of the Securities and Exchange Act of 1934 (“Section 10(b)”).

The Securities and Exchange Commission (“SEC”) caught the attention of the corporate and investment world in August 2021 when it filed an insider trading action against biopharmaceutical company employee Matthew Panuwat based on a “shadow trading” theory.

Another Southern District of New York (“SDNY”) court has sided with the Securities and Exchange Commission (“SEC”) in its enforcement campaign against the unregistered sale of cryptocurrency assets.