SEC Approves Final "Clawback Rule" for Executive Bonuses

Accounting Errors to Cost Executives Their Bonuses Under SEC RuleRegulators will make public companies take back executives’ incentive pay if they find significant errors in financial statements, aiming to improve corporate accountability at a time of rising shareholder discontent over pay practices.

The Securities and Exchange Commission voted 3-2 Wednesday to complete the so-called clawback rule, with all Democrats approving and Republicans dissenting. Required by the 2010 Dodd-Frank Act to discourage fraud and accounting mischief, the rule’s implementation has been delayed for years.

The approved rule will apply clawback provisions broadly to public companies, extending a practice that has become widespread in compensation agreements set by corporate boards in recent years. However, those voluntary policies sometimes set a high bar for recouping previously awarded compensation and can be difficult to enforce. That has led some companies to withhold executives’ incentive pay for longer periods to avoid the hassle of having to get it back after the fact.

Musk Says $50 Billion Tesla Pay Deal Is Justified by Electric-Car Maker’s Surge

Tesla Inc.’s decision to give Chief Executive Officer Elon Musk a pay package that could be worth more than $50 billion wasn’t excessive given the electric-car maker’s stratospheric rise in value over the last decade, his lawyers said in a court filing.

Musk, the world’s richest person, must face a Delaware judge at a trial Nov. 14 to counter accusations he steamrolled Tesla directors in 2018 to award him what may turn out to be one of the corporate world’s biggest pay deals ever.

Private Funds Remain a Top Priority for the SEC in 2022: A Review of Recent Cases and Their Implications for Private Fund Managers

Late last year, Securities and Exchange Commission (SEC) Chair Gary Gensler warned private fund managers that they should be prepared for increased regulatory scrutiny. Shortly thereafter, in February 2022, the SEC announced a historically sweeping set of rule proposals focused on the private fund industry. These proposals have coincided with a wave of enforcement actions impacting private fund managers, which made good on Chair Gensler’s promise. The cases run the gamut, involving scienter-based allegations of fraud and breach of fiduciary duty to strict liability violations of technical rules. Below is a summary of a selection of these cases, which provide a roadmap to the agency’s enforcement priorities as we wrap up 2022 and head into the new year.

SEC Commissioner Peirce Continues To Object To Various Aspects Of Nearly Every FCPA Enforcement Action

All told, as an SEC Commissioner, Peirce has voted on 42 corporate FCPA enforcement actions. In 10 of the actions (approximately 25%) Peirce voted not to approve. In 25 of the actions (approximately 60%), Peirce objected to certain aspects of the enforcement action. In other words, Peirce has objected (in whole or in part) to approximately 85% of corporate FCPA enforcement actions during her tenure as an SEC Commissioner.

What Bloomberg’s Crypto Opus Means for the Next Bull Market

O.K., so this new crypto story is by the most important financial writer of the day, writing in probably the most important financial publication, at a length that indicates serious commitment. But what does the story actually say?

Perhaps the most emblematic bit of the piece is an image caption early on which reads simply: “Bitcoin is a Big Thing.” The content as a whole offers the same takeaway as the fact of its publication: that crypto Really Matters – for better or for worse.

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What Levine does say is something both more moderate and more important: Crypto is interesting.

“I don’t have strong feelings either way about the value of crypto,” Levine makes clear. “I like finance. I think it’s interesting. And if you like finance – if you like understanding the structures that people build to organize economic reality – crypto is amazing.”