SEC Adopts Final Climate Disclosure Rules, Lawsuits Fly

SEC Adopts Rules to Enhance and Standardize Climate-Related Disclosures for Investors

The Securities and Exchange Commission today adopted rules to enhance and standardize climate-related disclosures by public companies and in public offerings. The final rules reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules.

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Specifically, the final rules will require a registrant to disclose:

—Climate-related risks that have had or are reasonably likely to have a material impact on the registrant’s business strategy, results of operations, or financial condition;

—The actual and potential material impacts of any identified climate-related risks on the registrant’s strategy, business model, and outlook;

—If, as part of its strategy, a registrant has undertaken activities to mitigate or adapt to a material climate-related risk, a quantitative and qualitative description of material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities;

—Specified disclosures regarding a registrant’s activities, if any, to mitigate or adapt to a material climate-related risk including the use, if any, of transition plans, scenario analysis, or internal carbon prices…

‘Sued on both sides’: SEC braces for lawsuits from supporters and critics of climate rule

“I’ve been a securities lawyer for three decades,” said Allison Herren Lee, a former SEC commissioner. “I am unaware of a rule where the SEC was sued on both sides of it. But I think that is a likely outcome here.”

Republicans and business groups argue the regulator does not have the authority to issue climate-related rules, which they warn will burden market participants.

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The agency’s rollbacks could trigger challenges from climate groups. The Sierra Club and Earthjustice said they were weighing up taking legal action against the SEC for not going far enough to protect investors but added that they would also take action to defend its authority to implement the rule.

Meanwhile, the US Chamber of Commerce said it would use tools “including litigation if necessary, to prevent government over-reach and preserve a competitive capital market system”.

Dissent: Today’s Episode of As the Crypto World Turns: Statement on ShapeShift AG

This enforcement action underscores the adverse consequences of the Commission’s approach to regulation in the crypto space and adds to the ambiguity that hangs over the crypto world. It is entirely unclear how ShapeShift was to discern that the Commission would consider crypto assets generally—and any crypto asset in particular—a security in the form of an investment contract. Even now, ten years on, it is hardly more discernable. But perhaps that ambiguity is exactly the result the Commission wants. Now the next person who comes up with an idea for building something to help other people buy or sell crypto will think twice. Why spend time and effort creating something only to face an enforcement action ten years later? The Commission’s mantra in such situations—“Just come in and register”—is manifestly unsatisfying. One can imagine the dialogue for that scene in a future episode….

Private Funds Accuse SEC of ‘Wildly Inconsistent’ Rules Approach

Private funds took their opening swing in a legal fight with the Securities and Exchange Commission, telling an appeals court that rules forcing investors to reveal more about short selling and stock lending are arbitrary and capricious.

Trade groups including the National Association of Private Fund Managers and MFA—formerly known as the Managed Funds Association—said the SEC adopted two rules last year that are interconnected yet “wildly inconsistent,” violating the Administrative Procedure Act.

“The Commission’s conduct is about as arbitrary and capricious as agency action gets,” the trade groups said in Tuesday’s filing….

Binance made crypto perfume in a baffling attempt to woo women

You might guess that the “CRYPTO” scent — which is also referred to as “Eau de Binance” — would smell like the final day of a tense hackathon where no one has had time to take a shower. Or maybe it smells like Sam Bankman-Fried’s jail cell. But that’s the stereotype that Conlan is trying to work against to make the crypto space seem more inclusive.

The actual scent is described as follows: “This fragrance opens with refreshing notes of ozone, salt, and moss, evoking the essence of a crisp and invigorating breeze. The heart notes reveal a luxurious blend of Oud, Mandarin, and precious woods, while the base notes of Amber, Woody, and Musk provide a warm, musky-sweet, and earthy aroma, exuding sophistication.”

2023 Delaware Corporate Law and Litigation Year in Review

In 2023, the Delaware courts issued many decisions addressing an array of important topics, including director and officer oversight obligations, the role of boards in navigating environmental, social, and governance (ESG) issues, dual-class stock structures and controlling stockholder conflicts of interests, structuring and process considerations for mergers and acquisitions, the enforceability of advance notice bylaws in the face of stockholder activism, and governance matters in the venture-backed company context. The Delaware General Corporation Law (the DGCL) was also updated in certain significant ways. Our 2023 Delaware Corporate Law and Litigation Year in Review surveys the cases and developments that should be of most interest to boards, management, and investors for both public and private companies, and highlights important takeaways from them.

”Ask a Recruiter”: I’m ready to get in front of law firms. Now what?

Last week, I provided an overview of what partners looking to make a lateral move need to do before launching a search. This week, we get into the exciting (and sometimes dramatic) stuff: what happens once all of the info you and your recruiter painstakingly prepared is actually in front of your target firms?

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The day we confidentially submit a candidate’s materials to law firms is known as “launch day,” or “D-1” in Macrae parlance. An initial submission is typically reviewed by a firm’s Office Managing Partner (OPM), the relevant practice group leader, and/or head of lateral partner recruiting. While I’ve had candidates hear back from a firm within a few days, it more often takes a firm 2-3 weeks to way in. Very. Long. Weeks. Which leads us to…

The Slog

Lawyers are not particularly good at waiting. (Recruiters – many of us former lawyers – aren’t, either. Which is why it helps to work with a recruiter who will hustle to get firms to respond to your submissions.) But, rest assured, once firms begin indicating interest, your calendar will quickly fill up with in-person and virtual interviews.

The word “interview” doesn’t quite fit the bill, though, because at this stage in your career what you’ll really be having are business meetings. Both you and the firm will engage in candid conversations about the viability of going into business together….