Quarterly versus semiannual reporting is a hot topic in the world of SEC reporting.  While there has been no official regulatory action, semiannual reporting has been mentioned and discussed by SEC officials in a number of settings.

The discussion today, however, is not the first focused on this issue.  In the 1950s and 1960s, U.S. public companies reported semi-annually.  It was not until 1970 when quarterly reporting was first required.  In 2018 and 2019, as part of a process to consider returning to semiannual reporting, the SEC issued a formal Request for Comment and received a number of comment letters.  These documents provide a bit of context and enumerate a number of considerations that will likely be relevant for this current discussion.

As always, your thoughts and comments are welcome!

While the SEC did not issue formal press releases to announce them, on July 16, 2025, the Commission issued three whistleblower awards totaling over $7,500,000.  You can find the details of the awards here.

As always, your thoughts and comments are welcome!

On April 21, 2025, the SEC’s Office of the Whistleblower announced a joint award of approximately $6 million.  You can read more in this Press Release.  You can find background about the whistleblower process along with the program’s 2024 annual report to Congress here.

As always, your thoughts and comments are welcome!

Since the two clawback related check boxes were added to the Form 10-K cover page, there has been a fair amount of confusion concerning when companies should check the boxes.  The wording for the check boxes involves interpreting phrases such as “the correction of an error” and a “required recovery analysis”:

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

While the staff made some comments about the check boxes in public forums, including PLI’s The SEC Speaks conference, there was no formal instruction about how to complete these two check boxes.  On April 11, 2025, the staff addressed this situation with new Compliance and Disclosure Interpretations to provide clarity about when and how to use the check boxes.

Question 104.20 addresses the first check box concerning the correction of an error:

Question 104.20

Question: When a listed issuer reports a change to its previously issued financial statements in an annual report, how should the issuer determine whether “the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements” for purposes of determining whether the check box indicating such correction of an error should be marked on the cover of its annual report?

Answer: The listed issuer should look to the guidance under the generally accepted accounting principles applicable to its financial statements in determining whether the change represents the correction of an error. When the financial statements of the registrant included in the filing have been revised to reflect the correction of an error to previously issued financial statements, regardless of whether those restatements are required or not, the listed issuer must mark the check box.

A required restatement includes (1) an accounting restatement to correct an error in previously issued financial statements that is material to those financial statements (commonly referred to as a “Big R” restatement) and (2) an accounting restatement to correct an error that is immaterial to those financial statements but would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period (commonly referred to as a “little r” restatement).

The correction of an immaterial prior period error that is recorded in the current year (commonly referred to as an “out-of-period adjustment”) does not require the listed issuer to mark the check box because the previously issued financial statements are not revised. [April 11, 2025]

Question 104.21 addresses the second check box concerning a required recovery analysis:

Question 104.21

Question: In 20X4, a listed issuer reports a “Big R” restatement to the 20X3 financial statements in an amendment to its 20X3 annual report and marks the check box on the cover to indicate that the financial statements reflect the correction of an error to previously issued financial statements. After applying its recovery policy pursuant to Exchange Act Rule 10D-1(b), the listed issuer determines that no recovery of erroneously awarded compensation is required.

Is the listed issuer also required to mark the check box on the cover of the amended 20X3 annual report to indicate that the restatement “required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period” pursuant to Exchange Act Rule 10D-1(b) and explain in that amended report why application of the recovery policy resulted in no recovery?

Answer: Yes, the listed issuer must mark the check box indicating that the restatement required the recovery analysis. This would include circumstances when:

• • • no incentive-based compensation was received by any executive officers at all during the relevant time frame, or
    • incentive-based compensation was received by an issuer’s executive officers during the relevant time frame, but that incentive-based compensation was not based on a financial reporting measure impacted by the restatement.

Further, the listed issuer should briefly explain why application of its recovery policy resulted in no recovery. [April 11, 2025]

The remaining C&DIs address issues including whether the boxes should be checked in years after the restatement and the restatement of interim periods.  One other C&DI addresses a SPAC issue related to co-registrant reporting.

As always, your thoughts and comments are welcome!

Following a February 11, 2025, Statement announcing that Acting Chairman Uyeda had directed the SEC staff to request that the Eighth Circuit not schedule arguments for the consolidated litigation challenging the SEC’s climate-related disclosure rules, on March 27, 2025, the Commission formally voted to end its defense of the rules.

In the Press Release announcing the Commission action, Acting Chairman Uyeda said, “The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules.”

Commissioner Crenshaw issued a Statement disagreeing with the Commission’s action.

As always, your thoughts and comments are welcome!

As a step to facilitate capital formation, on March 3, 2025, the SEC announced that the Division of Corporation Finance will expand its confidential review process for draft registration statements.  The confidential review process was established as part of the 2012 JOBS Act.  CorpFin expanded the process to all issuers in 2017.  According to the Announcement, this next group of changes includes:

• • “Expanding the availability of the nonpublic review process for the initial registration of a class of securities under the Exchange Act to include both Section 12(b) and Section 12(g) registration statements on Forms 10, 20-F, or 40-F.
  • Permitting issuers to submit draft registration statements regardless of how much time has passed since they became subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange Act.
  • Expanding the availability of the nonpublic review process for a de-SPAC transaction in situations where the SPAC is the surviving entity (i.e., SPAC-on-top structure) as long as the target is eligible to submit a draft registration statement.
  • Permitting issuers to omit the name of the underwriter(s) from their initial draft registration statement submissions, when otherwise required by Items 501 and 508 of Regulation S-K, provided that they include the name of the underwriter(s) in subsequent submissions and public filings.”

In the Press Release announcing these changes Cicely LaMothe, Acting Director of CorpFin said:

“Over the years, staff have observed companies seeking to raise capital are taking advantage of the nonpublic review process when available. Expanding these popular accommodations will provide new and existing companies greater flexibility to explore and plan public offerings.”

As always, your thoughts and comments are welcome!

On February 11, 2025, Acting SEC Chairman Mark T. Uyeda issued a Statement announcing that he has directed the SEC staff to request that the Eighth Circuit not schedule arguments for the consolidated litigation challenging the SEC’s climate-related disclosure rules.  According to the Statement this will “provide time for the Commission to deliberate and determine the appropriate next steps in these cases.”

You can read more, including concerns about the lack of statutory authority for the Commission to promulgate these rules, in the Statement.

As always, your thoughts and comments are welcome!

Recent U.S Supreme Court decisions have addressed how the SEC can use its administrative court processes for fraud cases and ended the Chevron doctrine, which had created a presumption that courts must rely on an agency’s interpretations of ambiguous statutes.  In this episode of the inSecurities podcast, hosts Chris Ekimoff and Kurt Wolfe provide an understandable, inciteful and thorough discussion of the issues in both these areas and how the Court’s decisions may affect practice.

As always, your thoughts and comments are welcome!

In a long-anticipated development, on March 6, 2024, the SEC adopted final rules requiring climate-related disclosures.  The rules add:

• • Non-financial disclosures about climate-related risks, how such risks are managed and related board oversight;

• • Scope 1 and Scope 2 greenhouse gas (GHG) emission disclosures along with phased-in attestation requirements for large-accelerated and accelerated filers;

• • Financial statement disclosures about “capitalized costs, expenditures expensed, and losses incurred as a result of severe weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise, subject to applicable one percent and de minimis disclosure thresholds”;

• • Disclosures about carbon offsets and renewable energy credits or certificates (RECs) if material; and

• • Information about the impact on the estimates and assumptions used to produce the financialstatements from risks and uncertainties associated with severe weather events and other natural conditions and other related issues, if material.

To help companies and advisors implement these new requirements, PLI’s SEC Institute will offer several programs.

We will present two One-Hour Briefings delving into the final rules at 1 p.m. and 3 p.m. on April 18, 2024.  The first briefing will focus on governance related disclosures and the second briefing will focus on GHG emission and financial statement disclosures.  We will put links to the briefings in this blog as soon as they are available.

Our Midyear Forums will include in-depth discussion of the details of the rules.

We will also have a special conference in the early fall focused on understanding and implementing these extensive new disclosures.  We will put a link to this conference in this blog as soon as it is available.

You can read more in the related Fact Sheet and the Final Rule Release.

As always, your thoughts and comments are welcome.