CorpFin Archives - Securities Law Blog

Disclosures On Offerings And Registrations Of Securities In The Crypto Asset Markets

On April 10, 2025, the SEC Division of Corporation Finance (“CorpFin”) issued a statement on disclosurs in offerings and registrations of securities in the crypto asset markets. This is the third statement issued by CorpFin on various topics dealing with cryptocurrencies and digital assets in a matter of weeks. For a review of CorpFin’s statement on certain proof of work mining activities see HERE and on stablecoins, see HERE.

The statement is meant to give guidance related to specific disclosure topics when either registering crypto assets or when filing a registration statement for an issuer in the crypto asset business. The guidance cuts across all Regulation S-K disclosures whether in a Securities Act form (S-1; F-1; etc..) or an Exchange Act form (10-K; 20-F etc..).

Description of Business – Item 101 of Regulation S-K

Item 101 of Regulation S-K – Description of Business – requires an issuer to provide detailed background information material to understanding the general development

June 17, 2025

SEC Statement On Stablecoins

On April 4, 2025, the SEC’s Division of Corporation Finance (“CorpFin”) issued a statement on stablecoins. In Particular, the statement addresses stablecoins that are designed to maintain a stable value relative to the United States Dollar (“USD,”) on a one-for-one basis, can be redeemed for USD on a one-for-one basis (i.e., one stablecoin to one USD), and are backed by assets held in a reserve that are considered low-risk and readily liquid with a USD-value that meets or exceeds the redemption value of the stablecoins in circulation (“Covered Stablecoins”).

Stablecoins Generally

A stablecoin is a type of crypto asset designed to maintain a stable value relative to a reference asset, such as USD, another fiat currency, a commodity like gold, or a pool or basket of assets. Stablecoins usually track with the underlying asset on a one-to-one basis (for example, one stablecoin for $1 USD). Stablecoins can maintain their value in different ways, including through a set reserve

June 10, 2025

SEC Statement On Proof-Of-Work Mining Activities

On March 20, 2025, the SEC’s Division of Corporation Finance (“CorpFin”) issued a statement on certain proof-of-work mining activities. Illustrating CorpFin’s evolving understanding of the digital world, the statement drills down to a very specific aspect of the crypto mining industry.

The CorpFin statement “addresses the mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network, and are used to participate in and/or earned for participating in such network’s consensus mechanism or otherwise used to maintain and/or earned for maintaining the technological operation and security of such network.” In the statement, CorpFin refers to these mined crypto assets as “Covered Crypto Assets” and the mining as “Protocol Mining.”

Protocol Mining

Networks utilizing Protocol Mining are governed by computer code eliminating the need for designated trusted intermediaries. The programmed software enforces certain network rules, technical requirements, and rewards distributions. Public, permissionless networks allow anyone to participate in the network’s operation, including the validation

June 3, 2025

New Guidance On Rule 14a-8 Shareholder Proposals And No Action Letter Process

On February 12, 2025, shortly after the inauguration, the SEC Division of Corporation Finance (“Corp Fin”) issued Staff Legal Bulletin 14M (“SLB 14M”) rescinding SLB 14L which had in turn rescinded prior SLBs 14I, 14J and 14K. As an aside, SLB 14L was issued under then new Chair Gary Gensler in 2021 following Biden’s election, and the prior three SLB’s had been issued under then Chair Jay Clayton, following President Trump’s first election. For more on SLB 14L see HERE.

New SLB 14M provides more of a middle ground to the prior 14L which had been designed to make it easier for environmental, social and governance (ESG) advocates to include their various proposals in company proxy materials.

Background – Rule 14a-8

The regulation of corporate law rests primarily within the power and authority of the states. However, for public companies, the federal government imposes various corporate law mandates including those related to matters of corporate governance. While state law

May 20, 2025

SEC Further Expands Ability To File Confidential Registration Statements

The SEC’s Division of Corporation Finance has expanded the ability to file non-public confidential registration statements to include all registration statements.

In 2012, the JOBS Act created a path for emerging growth companies to file draft registration statements (DRS) on a confidential basis when completing an initial public offering. In 2017 the Division of Corporation Finance expanded the DRS filing option to include all Section 12(b) Exchange Act registration statements (but not 12(g) registrations), all registration statements for initial public offerings, and follow on offerings completed within 12 months of an initial public offering, for all class of issuers. See – HERE.

On March 3, 2025, the Division of Corporation Finance announced that it has further expanded the ability to utilize a DRS filing to include:

Initial registrations under the Exchange Act, including both Sections 12(b) and 12(g) including Forms 8-A, 10, 20-F and 40-F;
All Securities Act of 1933 (Securities Act) registration statements regardless of the amount of

March 25, 2025

SEC Division Of Corporation Finance Statement On Disclosure Review

On June 24, 2024, Erik Gerding the Director of the SEC’s Division of Corporation Finance made a statement regarding the SEC’s state of disclosure review. In fiscal year 2023 and continuing into 2024, the top areas of review and comment by the SEC were China-related matters, artificial intelligence, non-GAAP disclosures, management’s discussion and analysis, revenue recognition and financial statement presentation. In addition, disruptions in the banking industry, cybersecurity risks, the impact of inflation and disclosure related to or as a result of newly adopted rules (such as pay versus performance) are gaining attention by SEC review teams.

The director’s statement gives some insight into the SEC’s focus and serves as a reminder to our clients and us practitioners alike to be sure we are staying abreast of the ever-changing capital markets environment.

China Related Disclosures

A few years ago, the SEC enacted the Holding Foreign Companies Accountable Act and approved rules implementing same (see HERE). The SEC continues to

August 6, 2024

Financial Reporting Manual Updated

On January 30, 2023, the SEC’s Division of Corporation Finance updated its Financial Reporting Manual (“Manual”). The latest update is dated as of December 31, 2022. Although we attorneys like to leave the accounting to the accountants, the Financial Reporting Manual is a go to resource for all practitioners and is generally one of the many resources always open on my desktop.

As the preamble to the Manual states, it was originally created as internal guidance to the SEC staff. In 2008, in an effort to increase transparency of informal staff interpretations, the SEC posted a version of the Manual to its website. The SEC continues with its usual disclaimers that the manual is not formal guidance and that they can change their interpretations or views at any time, etc. Regardless, we all use it as a resource and in my years of experience, have never had the SEC take a counter-position to the Manual’s guidance unless there has been

March 21, 2023

Virtual Annual Meetings

As the Covid-19 pandemic continues to disrupt normal business operations and impede a third proxy/annual meeting season, the SEC has issued guidance regarding compliance with the federal proxy rules for upcoming annual meetings considering health, transportation, and other logistical issues raised by the spread of Covid. Layering onto the guidance directed at extra-ordinary circumstances is the growing underlying belief that virtual and hybrid meetings are here to stay and public America must navigate a new road map.

SEC Guidance

On January 19, 2022, the SEC Divisions of Corporation Finance (“CorpFin”) and of Investment Management issued guidance related to meeting the requirements of the federal proxy rules for holding annual meetings in light of Covid disruptions. In addition to the specific guidelines, the SEC strongly encourages all market participants, including broker-dealers, transfer agents, and proxy service providers to be flexible and work collaboratively with one another with the goal of facilitating a company’s obligation to hold an annual meeting.

As I’ve

February 1, 2022

The SEC Has Issued New Guidance On Shareholder Proposals And Updated The Rule 14a-8 No-Action Letter Process

On November 3, 2021, the SEC Division of Corporation Finance (“Corp Fin”) issued Staff Legal Bulletin 14L (“SLB 14L”) related to Rule 14a-8, rescinding prior Bulletins 14I, 14J and 14K and effectively destroying four years of interpretative guidance related to the exclusion of ESG related shareholder proposals from proxy statements. SLB 14L also provides interpretative guidance on the use of images in shareholder proponents’ supporting statements, proof of ownership, and the use of email for notices.

Following the issuance of Bulletin 14L, the SEC announced that it was reversing a 2019 policy change related to providing written responses to no-action letter requests in accordance with Rule 14a-8 in the proxy process. The earlier 2019 policy change provided that the SEC no longer had to provide written responses to company’s that sought to exclude a shareholder proposal. Rather, the SEC could inform the company and the proponent of its position (concurs, disagrees or declines to state a view) orally or

January 25, 2022

SEC Announces It Will Not Enforce Amended Rules Governing Proxy Advisors

On June 1, 2021, SEC Chair Gary Gensler and the SEC Division of Corporation Finance issued statements making it clear that the SEC would not be enforcing the 2020 amendments to certain rules governing proxy advisory firms or the SEC guidance on the new rules.

In particular, in July 2020 the SEC adopted amendments to change the definition of “solicitation” in Exchange Act Rule 14a-1(l) to specifically include proxy advice subject to certain exceptions, provide additional examples for compliance with the anti-fraud provisions in Rule 14a-9 and amended Rule 14a-2(b) to specifically exempt proxy voting advice businesses from the filing and information requirements of the federal proxy rules. On the same day, the SEC issued updated guidance on the new rules. See HERE for a discussion on the new rules and related guidance.

Like all rules and guidance related to the proxy process, the amendments were controversial with views generally falling along partisan lines. On June 1, 2021, Chair

June 15, 2021

SPAC Transactions Continue Amid SEC Cautionary Statements

Since I wrote about the SPAC IPO boom in June 2020 (HERE), the trend has not waned. However, as soon as celebrities like Jay-Z, Shaquille O’Neal, A-Rod and astronaut Scott Kelly jumped in, I knew the tide was shifting, and recent SEC alerts bring that to light. To be clear, SPACs have been used as a method for going public for years and will continue to do so in the future. In fact, I firmly believe that going public through a SPAC will continue and should continue to rival the traditional IPO. With so much SPAC money available in the market right now (an estimated $88 billion raised in 2021 so far already exceeding the estimated $83.4 billion raised in all of 2020) and the Dow and S&P beating historical records, SPACs are an excellent option as an IPO alternative.

However, SPACs should not be viewed as the trendy investment of the day and both investors and

April 13, 2021

ESG Disclosures – A Continued Discussion

In a series of blogs, I have been discussing the barrage of environmental, social and governance (ESG) related activity and focus by capital markets regulators and participants. Former SEC Chair Jay Clayton did not support overarching ESG disclosure requirements. However, new acting SEC Chair Allison Herron Lee has made a dramatic change in SEC policy, appointing a senior policy advisor for climate and ESG; the SEC Division of Corporation Finance (“Corp Fin”) announced it will scrutinize climate change disclosures; the SEC has formed an enforcement task force focused on climate and ESG issues; the Division of Examinations’ 2021 examination priorities included an introduction about how this year’s priorities have an “enhanced focus” on climate and ESG-related risks; almost every fund and major institutional investor has published statements on ESG initiatives; a Chief Sustainability Officer is a common c-suite position; independent auditors are being retained to attest on ESG disclosures; and enhanced ESG disclosure regulations are most assuredly forthcoming.

April 6, 2021

ESG Investing and Ratings

As I mentioned in the last blog in this series on ESG, back in September 2019, when I first wrote about environmental, social and governance (ESG) matters (see HERE), and through summer 2020 when the SEC led by Chair Jay Clayton was issuing warnings about making ESG metric induced investment decisions, I was certain ESG would remain outside the SEC’s regulatory focus.

Enter Chair Allison Herron Lee and in a slew of activity over the past few months, the SEC appointed a senior policy advisor for climate and ESG; the SEC Division of Corporation Finance (“Corp Fin”) announced it will scrutinize climate change disclosures; the SEC has formed an enforcement task force focused on climate and ESG issues; the Division of Examinations’ 2021 examination priorities included an introduction about how this year’s priorities have an “enhanced focus” on climate and ESG-related risks; almost every fund and major institutional investor has published statements on ESG initiatives; a Chief Sustainability

March 30, 2021

ESG Matters – What a Difference A Year Makes

What a difference a year makes – or should I say – what a difference an administration makes! Back in September 2019, when I first wrote about environmental, social and governance (ESG) matters (see HERE), and through summer 2020 when the SEC led by Chair Jay Clayton was issuing warnings about making ESG metric induced investment decisions, I was certain ESG would remain outside the SEC’s disclosure based regulatory regime. Enter Chair Allison Herron Lee and in a slew of activity over the past few weeks, the SEC appointed a senior policy advisor for climate and ESG; the SEC Division of Corporation Finance (“Corp Fin”) announced it will scrutinize climate change disclosures; Corp Fin has called for public comment on ESG disclosures and suggested a framework for discussion on the matter; the SEC has formed an enforcement task force focused on climate and ESG issues; the Division of Examinations’ 2021 examination priorities included an introduction about how this year’s

March 23, 2021

Intellectual Property And Technology Risks – International Business Operations

In December 2019, the SEC Division of Corporation Finance issued CF Disclosure Guidance: Topic No. 8 providing guidance related to the disclosure of intellectual property and technology risks associated with international business operations.

The global and technologically interconnected nature of today’s business environment exposes companies to a wide array of evolving risks, which they must individually examine to determine proper disclosures using a principles-based approach. A company is required to conduct a continuing analysis on the materiality of risks in the ever-changing technological landscape to ensure proper reporting of risks. To assist management in making these determinations, the SEC has issued additional guidance.

The guidance, which is grounded in materiality and a principles-based approach, is meant to supplement prior guidance on technology and cybersecurity matters including the February 2018 SEC statement on public company cybersecurity disclosures (see my blog HERE); Director Hinman’s speech at the 18th Annual Institute on Securities Regulation in Europe in March, 2019; the SEC

December 22, 2020

An IPO Without The SEC

On January 23, 2019, biotechnology company Gossamer Bio, Inc., filed an amended S-1 pricing its $230 million initial public offering, taking advantage of a rarely used SEC Rule that will allow the S-1 to go effective, and the IPO to be completed, 20 days from filing, without action by the SEC. Since the government shutdown, several companies have opted to proceed with the effectiveness of a registration statement for a follow-on offering without SEC review or approval, but this marks the first full IPO, and certainly the first of any significant size. The Gossamer IPO is being underwritten by Bank of America Merrill Lynch, SVB Leerink, Barclays and Evercore ISI. On January 24, 2019, Nasdaq issued five FAQ addressing their position on listing companies utilizing Section 8(a). Although the SEC has recommenced full operations as of today, there has non-the-less been a transformation in the methods used to access capital markets, and the use of 8(a) is just

January 29, 2019

The SEC Has Provided Guidance On Ether and Bitcoin, Sort Of

On June 14, 2018, William Hinman, the Director of the SEC Division of Corporation Finance, gave a speech at Yahoo Finance’s All Markets Summit in which he made two huge revelations for the crypto marketplace. The first is that he believes a cryptocurrency issued in a securities offering could later be purchased and sold in transactions not subject to the securities laws. The second is that Ether and Bitcoin are not currently securities. Also, for the first time, Hinman gives the marketplace guidance on how to structure a token or coin such that it might not be a security.

While this gives the marketplace much-needed guidance on the topic, a speech by an executive with the SEC has no legal force. As a result, the blogs and press responding to Mr. Hinman’s speech have been mixed. Personally, I think it is a significant advancement in the regulatory uncertainty surrounding the crypto space and a signal that more constructive guidance

June 19, 2018

The Division of Corporation Finance’s Disclosure Review And Comment Process

Those that regularly read my blog know that I sometimes like to go back to basics. This blog will revisit and discuss the SEC’s Division of Corporation Finance (“CorpFin”) comment and review process. Back in March 2016, I wrote about the SEC comment and review process, including a description of the internal review process, review levels and breakup of industry sector reviewers. That blog can be read HERE. Since that time, the SEC has eliminated the Tandy Letter requirement. See HERE. Furthermore, on March 22, 2018, CorpFin updated its “Filing Review Process” page on the SEC website.

At the end of each calendar year, the big four accounting firms generally publish studies on CorpFin’s Comment Priorities. Their studies, and other recent publications, uniformly found that the number of comments, especially in a registration process, has dramatically declined. I have noticed this trend as well in my practice.

Also consistent in reports is a list of recent

April 10, 2018

What Does The SEC Do And What Is Its Purpose?

As I write about the myriad of constantly changing and progressing securities law-related policies, rules, regulations, guidance and issues, I am reminded that sometimes it is important to go back and explain certain key facts to lay a proper foundation for an understanding of the topics which layer on this foundation. In this blog, I am doing just that by explaining what the Securities and Exchange Commission (SEC) is and its purpose. Most of information in this blog comes from the SEC website, which is an extremely useful resource for practitioners, issuers, investors and all market participants.

Introduction

The mission of the SEC is to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation. Although each mission should be a priority, the reality is that the focus of the SEC changes based on its Chair and Commissioners and political pressure. Outgoing Chair Mary Jo White viewed the SEC enforcement division and task of investor protection as her

February 14, 2017

SEC Eliminates The “Tandy Letter”

On October 5, 2016, the SEC Division of Corporation Finance (CorpFin) announced that, effective immediately, it would no longer require companies to include “Tandy” letter representations in comment letter response or registration acceleration requests addressed to the SEC.

Background

Beginning in the 1970s the SEC began to require an affirmative statement from the company acknowledging that the company cannot use the SEC’s comment process as a defense in any securities-related litigation. Named after the first company required to provide the affirmations, this language is referred to as a “Tandy” letter. By 2004 the “Tandy” letter was required in all comment letter responses to the SEC as well as registration acceleration requests. The “Tandy” portion of a response was required to be agreed to by the company itself, so if the response letter was on attorney letterhead, a signature line was required to be included for the company or the company could submit a separate letter. The Tandy language for an

December 20, 2016

Responding To SEC Comments

Background

The SEC Division of Corporation Finance (CorpFin) reviews and comments upon filings made under the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”). The purpose of a review by CorpFin is to ensure compliance with the disclosure requirements under the federal securities laws, including Regulation S-K and Regulation S-X, and to enhance such disclosures as to each particular issuer. CorpFin will also be cognizant of the anti-fraud provisions of the federal securities laws and may refer a matter to the Division of Enforcement where material concerns arise over the adequacy and accuracy of reported information or other securities law violations, including violations of the Section 5 registration requirements. CorpFin has an Office of Enforcement Liason in that regard.

CorpFin’s review and responsibilities can be described with one word: disclosure!

CorpFin selectively reviews filings, although generally all first-time filings, such as an S-1 for an initial public offering or Form 10 registration under

March 29, 2016

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CorpFin

Disclosures On Offerings And Registrations Of Securities In The Crypto Asset Markets

SEC Statement On Stablecoins

SEC Statement On Proof-Of-Work Mining Activities

SEC Further Expands Ability To File Confidential Registration Statements

SEC Division Of Corporation Finance Statement On Disclosure Review

Financial Reporting Manual Updated

Virtual Annual Meetings

SEC Announces It Will Not Enforce Amended Rules Governing Proxy Advisors

An IPO Without The SEC

The SEC Has Provided Guidance On Ether and Bitcoin, Sort Of

The Division of Corporation Finance’s Disclosure Review And Comment Process

What Does The SEC Do And What Is Its Purpose?

SEC Eliminates The “Tandy Letter”

Responding To SEC Comments

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