Inside Business Law

The Business Law Section held its 2013 Fall Meeting on November 22 and 23 in Washington, D.C. The meeting featured 12 separate CLE programs and numerous additional meetings, roundtable discussions, and dinners. The materials from and recordings of those CLE programs are all available now, through the Business Law Section website. Here are a few of the highlights from the meeting: 

Bankruptcy for Breakfast 

The Bankruptcy Litigation Subcommittee of the Business and Corporate Litigation Committee presented another round of “Bankruptcy for Breakfast” at the Fall Meeting. Sarah Loomis Cave and Carolyn Richter co-chaired the program, with a panel consisting of the Honorable Frank J. Bailey, the Honorable Philip H. Brandt, the Honorable Elizabeth S. Stong, and Michael D. Rubenstein. Ms. Cave moderated the program. The presentation began with the judges’ view of the current state of bankruptcy filings. The panel then discussed current issues in municipal bankruptcies, updated attendees on issues arising from Stern v. Marshall, and touched on issues relevant to Chapter 11 cases. 

Examination of the Financial Expert Witness at Trial 

John Levitske and Stuart Riback co-chaired the panel “Examination of the Financial Expert Witness at Trial,” moderated by Mark Gallagher, with panelists the Honorable Audrey Carrion, the Honorable Alvin W. Thompson, William D. Johnston, Gerald A. Klein, Vincent J. Love, and Adam Warren. The panel examined the presentation of financial expert witness testimony in federal and state courts at the voir dire, direct examination, and cross examination stages of a case from the perspectives of judges, lawyers, and experts. Kristopher McGrew coordinated the materials for the panel. 

Invest in this Offering! The Brave New World of General Solicitation in Rule 506 Offerings 

The Federal Regulation of Securities Committee, the Middle Market and Small Business Committee, and the Law Practice Management Section collaborated to present the panel “Invest in this Offering! The Brave New World of General Solicitation in Rule 506 Offerings.” The panel was chaired by David M. Lynn and included speakers Jack Bostelman, Meredith B. Cross, Jonathan Ingram, Annemarie Tierney, and Gregory C. Yadley. It addressed emerging practices for private offerings that were consistent with the Rule 506 changes. 

A Tour of the Ivory Tower: Important Developments in the U.S. Supreme Court for Business Lawyers and their Clients 

The Business and Corporate Litigation Committee presented another installment of its perennially popular panel analyzing U.S. Supreme Court decisions, titled “A Tour of the Ivory Tower: Important Developments in the U.S. Supreme Court for Business Lawyers and Their Clients.” Kendyl T. Hanks, moderated the panel, which included Thomas Hungar and Robert Barnes. 

Governance Meets Sustainability 

Nancy S. Cleveland and Katayun I. Jaffari co-moderated the panel of Brad A. Molotsky, Leah Seligmann, and John Walen to discuss how “Governance Meets Sustainability,” presented by the Sustainability Initiatives and Related Governance Matters Subcommittee of the Corporate Governance Committee and the Federal Regulation of Securities Committee. The panel discussed the evolving understanding of sustainability, which includes both environmental and economic longevity. The panel went on to discuss the role that a board of directors has in the governance and oversight of a corporation’s efforts with respect to sustainability. 

Dialogue with the Director of the Division of Corporate Finance 

SEC Division of Corporation Finance Director Keith Higgins provided a lively 90-minute update during the ever-popular “Dialogue with the Director” program (PDF) (Audio), hosted by the Federal Regulation of Securities Committee (moderated by Cathy Dixon, Chair, and Vice-Chairs Dave Lynn and David Sirignano), on the wide array of division rulemaking projects and other work. In particular, the Director focused on the status of various pending – and impending – SEC proposals to implement the Dodd-Frank Act (risk retention in asset-backed securities offerings, CEO versus median employee pay-ratio disclosure) and the JOBS Act (crowdfunding, Reg A+, and Regulation D amendments). In addition, he discussed the division’s experience under the SEC’s recently adopted amendments to Regulation D under the Securities Act of 1933 mandated by the JOBS Act (new Rule 506(c), effective in September 2013, which now permits the use of general solicitation and general advertising in private placements) and the Dodd-Frank Act (the “bad actor” disqualification provisions now applicable to all private placements under Rule 506 of Regulation D). 

The SEC’s Renewed Focus on Financial Fraud 

The Law and Accounting and Federal Regulation of Securities Committees co-sponsored a program on the SEC’s heightened enforcement focus on financial reporting fraud and audit failures (“The SEC’s Renewed Focus on Financial Fraud” (Audio)). Moderated by Law and Accounting Committee Chair Michael Scanlon, the panelists included Margaret McGuire, Senior Counsel to the Co-Directors of the SEC’s Division of Enforcement and Vice-Chair of that division’s new Financial Reporting and Audit Task Force, Mark Kronforst, Chief Accountant of the Division of Corporation Finance, and Morgan, Lewis & Bockius partners Linda Griggs (the previous Chair of Law and Accounting, and a member of the Federal Regulation of Securities Committee) and Christian Mixter (former Chief Trial Counsel of the SEC’s Division of Enforcement). Ms. McGuire discussed the multi-disciplinary task force’s mission, and its use of advanced technology to detect “red flags” signaling potential accounting irregularities and fraud in corporate financial statements, with the aid of staff in the Division of Corporation Finance, the SEC’s Office of the Chief Accountant, and the Division of Economic and Risk Analysis. Mr. Kronforst in turn discussed how new review software developed by DERA (the Accounting Quality Model) might be used in his division’s review of corporate filings that include financial statements, and highlighted various staff accounting and financial reporting “hot buttons” drawn from the division’s reviews. Ms. Griggs and Mr. Mixter presented their perspectives on these issues from the vantage points, respectively, of corporate/securities counsel and defense counsel.

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