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Internal Control Reports: The Next New Thing
Many public companies have already begun to prepare for compliance with Section 404 of the Sarbanes-Oxley Act of 2002 (the Act). Management and directors may not be clear on the framework for Section 404. Although Section 404 does not require disclosure in Annual Reports for the calendar year-end 2003, requisite lead times suggest that by now companies must be working diligently on compliance planning.
The Securities and Exchange Commission (SEC) issued final Section 404 rules on June 5, 2003. The rules require each public company's Annual Report to contain an internal control report:
- Stating management's responsibility for establishing and maintaining adequate internal control over financial reporting; and
- Containing an assessment as of the end of the fiscal year of the effectiveness of the company's internal control over financial reporting.
These rules apply to all companies regardless of size. Under the new compliance schedule, a company that is an “accelerated filer” as defined in Exchange Act Rule 12b-2 (generally, a U.S. company that has equity market capitalization over $75 million and has filed at least one annual report with the Commission), must begin to comply with these amendments for its first fiscal year ending on or after Nov. 15, 2004 (originally June 15, 2004). A non-accelerated filer must begin to comply with these requirements for its first fiscal year ending on or after July 15, 2005 (originally April 15, 2005). The Commission similarly has extended the compliance date for related requirements regarding evaluation of internal control over financial reporting and management certification requirements, including certification and related requirements applicable to registered investment companies. Even for non-accelerated filers, prompt action is important, since many will have less well-developed internal controls and thus may need more time to implement improvements.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
'Insurable Interest' and the Scope of First-Party Coverage
This article reviews the fundamental underpinnings of the concept of insurable interest, and certain recent cases that have grappled with the scope of insurable interest and have articulated a more meaningful application of the concept to claims under first-party property policies.