Saturday, November 13, 2004

SEC Proposal to Overhaul Securities Offerings - Paul, Weiss Comments

SEC Proposal to Overhaul Securities Offerings - Paul, Weiss Comments



My alma mater law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP has a recent publication online entitled SEC Proposes to Overhaul Various Aspects of the Securities Offering Process in the United States.



See the recent October 27, 2004 SEC press release on that reform.



Paul, Weiss writes:



"The SEC has proposed major modifications to the offering process for raising capital under the Securities Act of 1933. The proposals address communications related to registered offerings of securities, delivery of information to investors and registration and other procedures in the offering and capital formation process.



The proposals are the most recent initiative in a long line of attempts to modernize the offering process and to refocus the registration process on the disclosure regime under the Securities Exchange Act of 1934. The proposals represent incremental changes in the regulatory structure and offering process, and are designed to further integrate the Securities Act and the Exchange Act (in part by taking advantage of the recent enhancements to Exchange Act disclosure, thus allowing the SEC to rely on these reports to a far greater degree as a cornerstone of reforming the offering process)"....




See the Paul, Weiss site for a detailed discussion (a 48 page .pdf). The Law Pundit sees that Richard S. Borisoff, with whom the Law Pundit used to work, is one of the authors of the publication. In case he should see this posting, greetings.



The LawPundit used to write SEC registrations so that we understand well what is involved in these regulations and proposals. Hence, it is certain that all corporate attorneys involved in SEC work should take a look at this publication.

To Every Man his Colt (or should we say) Smith & Wesson

To Every Man his Colt (or should we say) Smith & Wesson



Gun politics is an issue worldwide.



Via Keith Devens,

Dave Kopel has published the draft of his forthcoming law review article on THE LICENSING OF CONCEALED HANDGUNS FOR LAWFUL PROTECTION: SUPPORT FROM FIVE STATE SUPREME COURTS.



Former US President Theodore Roosevelt is often quoted as having used the West African proverb "speak softly and carry a big stick".... although that could be amended in our day, according to the above article, to "speak softly, because the man you are talking to may be carrying a big stick...."



Actually, the LawPundit is for the granting of permission to carry concealed handguns for protection because it seems to work against crime and criminals. See here. However, we support gun control worldwide on military weapons beyond handguns and hunting rifles - there is a substantial difference as to the use for which such weapons are designed. On the other hand, if every man had his own personal armored tank in his backyard, we might be a bit more civil to one another ....

Sarbanes-Oxley (SOX) Deadline on Monday

Sarbanes-Oxley (SOX) Deadline on Monday



Alan Meckler, CEO of Jupitermedia, has a blog posting entitled Sarbanes Oxley Is Kafka's Dream complaining about the company costs caused by SOX, the Public Company Accounting Reform and Investor Protection Act (the "Sarbanes-Oxley Act of 2002" summarized inter alia at the AICPA and SEC FAQS), which was passed in response to corporate scandals such as Enron and MCI.



Via Real Corporate Lawyer we are directed to two news articles at the Business Week Online and the New York Times indicating that many public companies are nowhere near meeting SOX deadlines. As noted in the November 12, 2004 InternetNews.com article by Sean Micheal Kerner:



"Monday [November 15, 2004] is the day that Section 404 of Sarbanes-Oxley, "Management Assessment of Internal Controls," comes into effect for U.S.-based companies with market capitalization greater than $75 million....



Section 404 demands that companies put in place an adequate internal control structure and procedures for financial reporting, and holds corporate management accountable for inadequate controls. To ensure compliance with Section 404, enterprises must have data retention and retrieval processes in place, as well as solid documentation of all financial records."




As that article indicates, SOX also has the advantage of bringing better business practices to regulated companies:



"In the view of vendors, SOX has actually served to bring to the fore priorities that should have been at the forefront to begin with.



'Things like cleaning up your files, consolidating, backup and protection was kind of on the back burner and was not a high priority from the business side,' said HDS's Hu. 'This now gives IT people the opportunity to implement those types of procedures. All this really adds up to better IT practices.'



'This will actually help end users in the near term by putting in place some critical infrastructure that will make managing and accessing electronic records in a secure way much easier and more effective,' said EMC's Lair. 'Properly leveraging a corporation's information assets is definitely a 'win' for end users.'"


The European Constitution and the EU Referendum blog

The European Constitution and the EU Referendum blog



A poll by EOS Gallup Europe, FLASH EUROBAROMETER 159/2 “ The Future European Constitution ”, shows that 79% of EU citizens are favorable to an adoption of a Constitution for the European Union, including 81% in Ireland (IE) but only 51% in the United Kingdom (UK). 69% of EU citizens are of the opinion that a Constitution is essential for EU institutions to function well and not to end in deadlock.70% favored a Minister of Foreign Affairs for the EU. 80% of those questioned preferred regional and local debates on the EU Constitution.



The blog EU Referendum was founded "To discuss issues arising in relation to the UK referendum on the constitutional treaty".(See also Prof Anthony Coughlan).



One major posting in this regard is found at the EU Referendum blog at

The constitution - an analysis.



Although the EU Referendum blog is anti-Constitution (whereas the LawPundit is definitely pro-Constitution), their quite lengthy and detailed legalistic analysis is of substantial interest to the international legal community.



One example of information value - useful for legal commentators - is:



"Protocols: The 36 Protocols or agreements on particular topics attached to the Treaty now become part of the EU Constitution and are as legally binding as its substantive text. They include Ireland's Abortion Protocol (No.31), which generated controversy at the time of the 1992 Maastricht Treaty. They also include the Eurotom [sic] Protocol (No.36). The Euratom Treaty, which supports nuclear power, was due to end in 2007 after being in existence 50 years. It is now given an indefinite lease of new life by being made part of the EU Constitution. In addition there are 48 Declarations, which are not legally binding but are statements of political intention by the States making them."



The blog posting identifies as follows:

"ELEVEN KEY FEATURES OF THE CONSTITUTION OF THE NEW EU



1. PROVIDING THE NECESSARY CONSTITUTIONAL BASIS FOR AN EU STATE....

2. EU POWERS AND COMPETENCES ... THE EU COURT DECIDES THE BOUNDARIES BETWEEN EU AND NATIONAL POWERS....

3. EU LAWS TO BE BASED MAINLY ON POPULATION SIZE, WHICH ADVANTAGES THE BIG STATES....

4. MEMBER STATES TO HAVE NO EU COMMISSIONER FOR ONE-THIRD OF THE TIME....

5. A NEW POLITICAL PRESIDENT, AN EU FOREIGN MINISTER AND DIPLOMATIC CORPS, AND AN EU PUBLIC PROSECUTOR'S OFFICE....

6. AMENDING THE EU CONSTITUTION WITHOUT NEED OF FURTHER TREATIES OR REFERENDUMS....

7. "LOYAL" SUPPORT FOR EU FOREIGN AND SECURITY POLICY... EU DEFENCE MOVES FROM "MAY" TO "WILL"....

8. THE EU CHARTER OF FUNDAMENTAL RIGHTS GIVES THE ECJ POWER TO DECIDE OUR RIGHTS....

9. THE EURO TO BE CONSTITUTIONALLY THE EU CURRENCY....

10. EXTENSIVE EXTRA POWERS FOR THE EU....

11. AN IDEOLOGICAL CONSTITUTION...."




Read the EU Referendum blog for their analysis of those eleven features.



Although we see the legal analysis of the EU Referendum blog as quite useful, we find the conclusions made therefrom to be politically flawed. The LawPundit would opine that the EU Referendum blog does not place sufficient emphasis on the already visible and inevitable globalization taking place in a world of 6 billion people and a continuously growing world population, which presents global problems never before faced on our planet, problems that are hardly solvable by mini-states.



Whereas countries such as the United States unified their States long ago, creating the tremendous political, economic and military advantages which come through economies of scale, the nation-states of Europe have not advanced sufficiently beyond the days when every provincial baron had his own customs and tax collectors in his own little kingdom - and the arguments that the EU Referendum blog raises against the new European Constitution are not substantially different in tenor than the arguments raised by the local barons in ancient days to try to prevent the creation of those European nation-states.



Especially the British Isles have been the target for attacks and invasions of all kinds - and, without global US military might - the British Isles would today probably be a province of Germany. The United Kingdom and Ireland do not exist as free countries today by the grace of God, but by the grace of the "United" States of America, with the key emphasis on the word "united".



Whatever else the United States may stand for, it most certainly stands for the idea that political, economic and military unification of large geographic areas and populations is the key to world power and security. The history of modern Europe, by contrast, is marked by constant war and struggle for hegemonial domination - all without any long term success. Obviously, the political solution now being followed by European nation-states is the correct road to achieving the long due unification of Europe, which in the long term promises a more potent and powerful union with greater security for all.



That there are problems to this unification - as the EU Referendum blog emphasizes - is clear, but these problems are and indeed must be surmountable if Europe is not to sink into provincial impotence on the world scene, sacrificing economic welfare and military security for old-fashioned notions. And it most surely can not be the case that cheap labor or European monies are allowed to benefit Member States - see also here - who would otherwise be unwilling to fulfill their responsibilities in strengthening the European Union.



United we stand and divided we fall. The principle is universally applicable, but especially to Europe, which must be able to compete against rising world powers in other regions of the globe. In the modern era, "Big Brother" USA has been the only thing standing between a free Europe and an enslaved Europe. It is time that Europe began to act with the responsibility of an adult among nations, and this means the timely ratification of the European Constitution by ALL Member States.



Then Europe can move forward, as indeed it MUST.

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