Category: Corporate Disclosures


MD&A-Related Claims against Corporate Execs Reinforce Recent SEC Enforcement Trends

Posted on June 22nd, by in Accountants, Corporate Disclosures, Enforcement, Individual Liability, Settlements. Comments Off on MD&A-Related Claims against Corporate Execs Reinforce Recent SEC Enforcement Trends

A June 15, 2017 settlement with two former executives of a publicly-traded, multinational freight forwarding and logistics company provides the most recent example of two emerging SEC enforcement initiatives in financial reporting and accounting-based actions that we spotlighted recently – a non-reliance on financial statement materiality and an absence of fraud-based allegations. Exchange Act Rel. No. 80947 (Jun. 15, 2017). According to the SEC, Eric W. Kirchner and Richard G. Rodick, the former chief executive officer and chief financial officer of UTi Worldwide, Inc. (“UTi”), purportedly were responsible for inadequate Management’s Discussion & Analysis (“MD&A”) disclosures in a Form 10-Q that UTi issued during fiscal year 2013. Without admitting or denying the findings, both agreed to settle purported violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-13, and 13a-14, thereunder, and to pay a $40,000 civil penalty.

According … Read More »


Recent Charges Against China-Based Companies Demonstrate SEC’s Efforts to Bring More Financial Fraud Cases

Posted on April 23rd, by and in Corporate Disclosures, Financial Fraud, SEC Guidance. Comments Off on Recent Charges Against China-Based Companies Demonstrate SEC’s Efforts to Bring More Financial Fraud Cases

SEC Chair Mary Jo White and Enforcement Director Andrew Ceresney have repeatedly said that financial fraud would be a priority of the SEC’s enforcement program. Two recent cases involving companies with China-based operations may signal a new trend in this area.

On March 11, 2014, the SEC charged animal feed company AgFeed Industries Inc. in a massive accounting fraud scheme. According to the SEC, four company officials–executive chairman Songyan Li, CEO Junhong Xiong, CFO Selina Jin, and controller Shaobo Ouyang–engaged in several tactics to artificially inflate revenue, including creating fake invoices for sales that did not occur and misrepresenting the weight of hogs which resulted in falsely amplified revenues. The SEC alleged that to perpetuate the scheme, the executives kept two sets of company books–an “outside” set that the company provided to its auditors and an “inside” real set that contained … Read More »


D.C. Circuit Court of Appeals Issues Ruling on Conflict Minerals

Posted on April 22nd, by and in Appellate Decision, Corporate Disclosures, Dodd-Frank. Comments Off on D.C. Circuit Court of Appeals Issues Ruling on Conflict Minerals

On April 14, 2014, the U.S. Court of Appeals for the District of Columbia Circuit issued its opinion in the conflicts minerals case, National Association of Manufacturers, et al., v. Securities and Exchange Commission. The Court of Appeals upheld most aspects of the statute and the rule, but found that the statute and rule violate the First Amendment “to the extent that the statute and rule require regulated entities to report to the Commission and to state on their website that any of their products have not been found to be ‘DRC conflict free.’” The Court of Appeals remanded the case to the U.S. District Court for the District of Columbia for further proceedings consistent with its opinion. As of this time, there is no reprieve for issuers from the requirement to file a Form SD or conflict minerals report with the … Read More »




From the Blog:

D.C. Circuit Split on Constitutionality of SEC’s Administrative Judges

We previously blogged about the D.C. Circuit’s decision in Raymond J. Lucia Cos v. SEC, which rejected the petitioner’s constitutional challenges to the SEC’s...

MD&A-Related Claims against Corporate Execs Reinforce Recent SEC Enforcement Trends

A June 15, 2017 settlement with two former executives of a publicly-traded, multinational freight forwarding and logistics company provides the most recent example of...

SEC Names Co-Directors of Enforcement

Last week, the Securities and Exchange Commission (SEC) announced that Acting Enforcement Director Stephanie Avakian and former federal prosecutor Steven Peikin had been named...