The Securities and Exchange Commission today announced that it voted to adopt amendments to modernize the description of business (Item 101), legal proceedings (Item 103), and risk factor disclosures (Item 105) that registrants are required to make pursuant to Regulation S-K. These disclosure requirements have not undergone significant revisions in over 30 years. The amendments the Commission is adopting today update these items to reflect the many changes in our capital markets and the domestic and global economy in recent decades.

"Today we modernized our public company business disclosure rules for essentially the first time in over 30 years," said SEC Chairman Jay Clayton. "Building on our time-tested, principles-based disclosure framework, the rules we adopt today are rooted in materiality and seek to elicit information that will allow today's investors to make more informed investment decisions. I am particularly supportive of the increased...

The Securities and Exchange Commission today adopted amendments to the “accredited investor” definition, one of the principal tests for determining who is eligible to participate in our private capital markets.  Historically, individual investors who do not meet specific income or net worth tests, regardless of their financial sophistication, have been denied the opportunity to invest in our multifaceted and vast private markets.  The amendments update and improve the definition to more effectively identify institutional and individual investors that have the knowledge and expertise to participate in those markets. 

“Today’s amendments are the product of years of effort by the Commission and its staff to consider and analyze approaches to revising the accredited investor definition,” said Chairman Jay Clayton.  “For the first time, individuals will be permitted to participate in our private capital markets not only based on their income or net worth,...

The Securities and Exchange Commission today charged Super Micro Computer, Inc., a producer of computer servers, and its former CFO, Howard Hideshima, with prematurely recognizing revenue and understating expenses over a period of at least three years.

According to the SEC’s orders, Super Micro executives, including Hideshima, pushed employees to maximize end-of-quarter revenue, yet failed to devise and maintain sufficient internal accounting controls to accurately record revenue. As a result, the orders find, Super Micro improperly and prematurely recognized revenue, including by recognizing revenue on goods sent to warehouses but not yet delivered to customers, shipping goods to customers prior to customer authorization, and shipping misassembled goods to customers. The orders also find that Super Micro misused its cooperative marketing program, which entitles customers to reimbursement for a portion of cooperative marketing costs. According to the orders,...

On Wednesday, August 26 at 1 p.m. (ET), AARP will hold a live telephone town hall event with Erin Schneider, Regional Director with the Securities Exchange Commission; Bill Beatty, Securities Administrator with the Washington Department of Financial Institutions; and Chuck Harwood, Western Region Director with the Federal Trade Commission.

This live Q&A event will provide the latest information about targeted consumer, financial and investor scams which prey upon the fears and uncertainty brought about by the pandemic.

The Check Out Your Investment Professional search tool uses the SEC’s IAPD (Investment Adviser Public Disclosure) database as a one-stop shop to access certain information that SEC- and state-registered investment advisers are required to provide about their businesses and investment advisory representatives. IAPD also provides access to information about brokers and their registered representatives.

The Securities and Exchange Commission today announced that World Acceptance Corporation, a South Carolina-based consumer loan company, has agreed to pay $21.7 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA). 

The SEC’s order finds that from at least December 2010 through June 2017, World Acceptance Corporation’s former Mexican subsidiary, WAC de Mexico S.A. de C.V., paid more than $4 million in bribes to Mexican government officials and union officials to secure the ability to make loans to government employees and ensure that those loans were repaid in a timely manner.  According to the SEC’s order, WAC Mexico paid the bribes in a variety of ways, including by depositing money into bank accounts linked to the officials and by hiring an intermediary to distribute large bags of cash among the officials.  The SEC’s order finds that these bribes were inaccurately recorded in World Acceptance Corporation’s books and...

The Securities and Exchange Commission today announced that Lindsay McCord has been named Chief Accountant in the Division of Corporation Finance.

Ms. McCord has served as Acting Chief Accountant in the Division since March 2020, leading its work to monitor disclosures by companies impacted by COVID-19 and provide targeted regulatory relief and guidance on financial statement and related disclosure requirements. In addition, Ms. McCord has led the Division’s work to assist companies as they prepare to comply with the Commission’s changes to Rules 3-05, 3-14, and Article 11 of Regulation S-X. As the Division’s Chief Accountant, Ms. McCord will continue leading these efforts as well as other ongoing initiatives to make disclosure and financial reporting more effective and relevant for investors and issuers.

“I am delighted and grateful that Lindsay has agreed to serve as the Division’s Chief Accountant,” said Bill Hinman, Director of the SEC’s Division of...

The Securities and Exchange Commission today filed settled charges against affiliated registered investment advisers WBI Investments Inc. and Millington Securities Inc. for making material misrepresentations to clients about compensation Millington received in an institutional payment for order flow arrangement for routing client orders to certain brokerage firms for execution.  As part of the settlement, WBI and Millington agreed to pay a combined total of $1 million in penalties.

According to the SEC’s order, WBI and Millington served as advisers to a series of mutual funds and a series of exchange-traded funds, among other clients.  The order finds that Millington, which also served as WBI’s primary introducing broker, agreed to route WBI’s client orders to certain brokerage firms that agreed to pay Millington amounts they characterized as “payments for order flow.”  According to the order, the payments to Millington were $0.0125 to $0.0150 per...

The Securities and Exchange Commission today announced that Division of Enforcement Co-Director Steven Peikin will leave the agency on Aug. 14, 2020.

During his more than three years serving alongside Co-Director Stephanie Avakian, Mr. Peikin worked to better position the agency’s largest division to address emerging threats, increasing its efficiency and effectiveness in investigating and prosecuting violations of the federal securities laws. 

Upon Mr. Peikin’s departure, Ms. Avakian will remain Director.

Under the Co-Directors’ leadership, the Enforcement Division redoubled its focus on the needs of retail investors and, at the same time, continued to police the broad landscape of the securities markets and vigorously pursue securities law violators.  These efforts are reflected in the results: during the Co-Directors’ tenure, the Commission brought thousands of high-quality enforcement actions, obtained judgments and orders totaling over...

The Securities and Exchange Commission today announced that Division of Enforcement Co-Director Steven Peikin will leave the agency on Aug. 14, 2020.

During his more than three years serving alongside Co-Director Stephanie Avakian, Mr. Peikin worked to better position the agency’s largest division to address emerging threats, increasing its efficiency and effectiveness in investigating and prosecuting violations of the federal securities laws. 

Upon Mr. Peikin’s departure, Ms. Avakian will remain Director.

Under the Co-Directors’ leadership, the Enforcement Division redoubled its focus on the needs of retail investors and, at the same time, continued to police the broad landscape of the securities markets and vigorously pursue securities law violators.  These efforts are reflected in the results: during the Co-Directors’ tenure, the Commission brought thousands of high-quality enforcement actions, obtained judgments and orders totaling over...

The Securities and Exchange Commission today published procedures setting forth a staff-led process to nominate candidates for appointment to the Investor Advisory Committee. Candidates for vacancies on the Committee will be identified by a nominating committee composed of staff from across the SEC’s divisions and offices. The nominating committee will initially be chaired by Robert Marchman, Senior Policy Advisor for Diversity and Inclusion.

The nominating committee will identify candidates based on functional membership categories published on the SEC’s website, and members of the public are encouraged to express their interest in serving on the Committee. The staff-led nomination process is designed to promote a diversity of background, expertise, and perspective to assist the Committee in addressing the wide range of issues affecting investors.

“These procedures bring much needed improvements to the process of appointing members to the Investor Advisory...

The Securities and Exchange Commission today proposed comprehensive modifications to the mutual fund and exchange-traded fund disclosure framework to better serve the needs of retail investors. The proposed disclosure framework would feature concise and visually engaging shareholder reports that would highlight information that is particularly important for retail investors to assess and monitor their fund investments. The proposal is a central component of the Commission’s investor experience initiative and responds to comments the Commission received in response to a 2018 request for comment on retail investors’ experience with fund disclosure.

“The Commission is committed to improving the Main Street investor experience and modernizing information content and delivery,” said SEC Chairman Jay Clayton.  “By encouraging fund disclosures that use modern communication techniques to emphasize clearly and concisely the information investors find most useful,...

The Securities and Exchange Commission today proposed comprehensive modifications to the mutual fund and exchange-traded fund disclosure framework to better serve the needs of retail investors. The proposed disclosure framework would feature concise and visually engaging shareholder reports that would highlight information that is particularly important for retail investors to assess and monitor their fund investments. The proposal is a central component of the Commission’s investor experience initiative and responds to comments the Commission received in response to a 2018 request for comment on retail investors’ experience with fund disclosure.

“The Commission is committed to improving the Main Street investor experience and modernizing information content and delivery,” said SEC Chairman Jay Clayton.  “By encouraging fund disclosures that use modern communication techniques to emphasize clearly and concisely the information investors find most useful,...

Thank you, Carla (Garrett). And thank you to the Committee members for joining us virtually today. In particular, I’d like to welcome new members Kesha Cash and Sue Washer and thank each of you for bringing your unique perspectives, energy and expertise to this Committee.

Thank you as well to our panelists — an impressive group, individually and collectively — for contributing your valuable time and insights on the important issue you will be tackling today.

I am grateful to the Committee for focusing today on how our capital markets are serving underrepresented founders, including minorities and women. The current pandemic has underscored the need for prompt and efficient access to capital for small businesses when remote and unforeseen risks become unfortunate realities. In no area of our multifaceted, interconnected economy is this more clear than in the case of underrepresented founders. The economic impacts of COVID-19 have underscored the obstacles that many...

The new members were appointed following the resignations of Terry McNew, former President and CEO of Mastercraft Boat Holdings, and Karen Mills, President of MMP Group Inc.

“Kesha and Sue each bring a wealth of expertise and fresh perspectives regarding capital raising for emerging companies, and they will be valuable additions to our outstanding Committee,” said Martha Miller, the SEC’s Advocate for Small Business Capital Formation and Committee Member.  “We will miss Terry and Karen, and we thank them for their service and commitment to supporting small businesses and their investors.”

In addition, the Committee recently welcomed Melanie Senter Lubin, Maryland Securities Commissioner, as the representative of the North American Securities Administrators Association, and William Manger, Associate Administrator for the Office of Capital Access, as the representative of the U.S. Small Business Administration, each of whom was appointed by their...

FOR FURTHER INFORMATION CONTACT:  Julie Z. Davis, Senior Special Counsel, Office of the Advocate for Small Business Capital Formation, at (202) 551-5407, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-3628. 

The Securities and Exchange Commission today announced that Scott A. Thompson has been named Associate Regional Director for enforcement in the Philadelphia Regional Office.  Mr. Thompson succeeds Kelly L. Gibson, who became Regional Director of the SEC’s Philadelphia office in February 2020.

Mr. Thompson joined the SEC as a trial attorney in the Enforcement Division in 2007.  In 2013, he was promoted to Assistant Regional Director and supervised investigative staff attorneys, including those in the Market Abuse Unit.  In 2016, Mr. Thompson was awarded the SEC’s Arthur F. Matthews Award.  In his new role, Mr. Thompson will oversee the Philadelphia office’s enforcement efforts covering the Mid-Atlantic region.

During his career with the SEC, Mr. Thompson has litigated, tried, and supervised significant enforcement matters involving a variety of securities law violations, including cases against:

The Securities and Exchange Commission today announced that Bausch Health, formerly Quebec, Canada-based Valeant Pharmaceuticals, agreed to pay a $45 million penalty to settle charges of improper revenue recognition and misleading disclosures in SEC filings and earnings presentations. Three former executives – the chief executive officer, chief financial officer, and controller – also agreed to pay penalties to settle charges against them.

According to the SEC’s orders, when announcing certain GAAP and non-GAAP financial measures, Valeant among other things, misstated revenue transactions and included erroneous revenue allocations. For example, the order finds that, for five consecutive quarters, Valeant, former CEO J. Michael Pearson, former CFO Howard B. Schiller, and former controller Tanya R. Carro, touted double-digit same store organic growth, a non-GAAP financial measure that represented growth rates for businesses owned for one year or more.  Much of that...

As of June 30, registered broker-dealers and registered investment advisers are required to provide a new customer or client relationship summary (also called Form CRS) to retail investors.  SEC staff designed this Investor.gov page to help investors better understand how to use the relationship summary when choosing a financial professional.  This page also provides links to educational resources and a free and simple search tool that can help you research firms and financial professionals.

The Securities and Exchange Commission today charged former Georgia state legislator and former member of the Georgia Board of Regents Clarence Dean Alford with defrauding at least 100 investors in his now-bankrupt energy development company, Allied Energy Services LLC.

According to the SEC’s complaint, from 2017 to 2019, Alford fraudulently raised at least $23 million by selling promissory notes to investors – primarily Indian-American professionals – that he guaranteed would provide high annual rates of return. According to the complaint, Alford presented Allied as a successful business when in fact it was struggling, and claimed that investors’ funds would finance energy projects while using most of the funds to make interest payments to earlier investors and for personal expenses, including building a multmillion-dollar home. In 2019, Alford’s alleged scheme collapsed when he failed to make promised interest payments to several investors and then failed to repay the...