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The Return of David Becker - and the SEC Staff's "Hair's On Fire"

By broc

The Return of David Becker - and the SEC Staff's "Hair's On Fire"

On Friday, the SEC announced that David Becker would be returning as General Counsel in a few weeks. He also will have the title of "Senior Policy Director," a new position. David served as GC earlier in the decade during Arthur Levitt's tenure. David is a great lawyer and the SEC gets a big boost for his willingness to take the pay cut and return to the public sector.

It's also rumored that Kayla Gillan will be joining the SEC Staff (although I'm not certain in what capacity, the rumors don't say). For the past year, Kayla has been the Chief Administrative Officer for RiskMetrics (she was told to pick her own title) and before that, was one of the PCAOB's founding board members. Given the heat the SEC is taking, it's smart for Chair Schapiro to find investor-protection minded experts willing to get paid relative peanuts to join the embattled agency.

On Friday, Chair Schapiro delivered this speech in which she describes some of her first steps in changing the Enforcement Division's policies & procedures, etc. Here is a good summary of the speech from Gibson Dunn.

I expect this will be the first of many speeches announcing changes. Here's an example of how Mary gets the urgency of change - the title of this article is "SEC chief says agency to act like 'hair is on fire.'"

Economic Downturn Disclosure

In this podcast, Jason Day of Faegre & Benson discusses periodic disclosures relating to the current economic downturn, including:

- Which areas of periodic disclosure might require additional attention due to economic conditions?
- What types of specific economic-related disclosure should companies be focused on in preparing their MD&A?
- What new risk factors might companies consider?
- How else are you seeing the economic conditions influence disclosures?

Audit Committee Charters: May Need to Review Due to New PCAOB Rule

If you haven't been checking out our new "Proxy Season Blog," here is one of the first entries from last month: A recent change to the PCAOB rules on auditor independence may require some companies to revise their Audit Committee charters. Last August, the PCAOB adopted Ethics and Independence Rule 3526, which requires auditors to make independence disclosures before they enter into an initial engagement. Rule 3526 supersedes the PCAOB's Independence Standards Board Standard No. 1.

Effective September 30th, the SEC made a conforming technical change to Item 407 of Regulation S-K, concerning disclosures that companies must make in their audit committee reports included in their annual meeting proxy statements.

As a result, folks should review their audit committee charters to remove any references to superseded ISB Standard No. 1 - and consider instead stating that the committee receive written independence disclosures required by the PCAOB's applicable requirements. I doubt that this affects many companies, probably only those who wrote their charters to specifically refer to PCAOB rules.

- Broc Romanek

Full post as published by The Corporate Counsel.net Blog on February 09, 2009 (boomark / email).