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SEC issues $18 million whistleblower award
On April 28, the SEC announced an award of more than $18 million to a whistleblower in an enforcement action. According to the SEC’s press release, the whistleblower’s “significant information prompted an examination that resulted in an important enforcement action.” The formal order also states that the whistleblower, among other things, relayed information that alerted SEC staff to potential securities violations, and repeatedly raised concerns internally “in an attempt to immediately correct the problem,” which led to the whistleblower suffering hardships as a result. The SEC further emphasizes that the enforcement action resulted in millions of dollars being returned to retail investors.
As of April 28, the SEC has awarded 81 individuals a total of approximately $448 million in whistleblower awards since its first award in 2012.
Massachusetts securities regulator extends temporary relief for corporations and financial professionals
On April 30, the Massachusetts Securities Division extended an emergency notice announcing temporary relief from signature and notarization requirements for corporate filings and financial professionals (previously covered here). The extension will be in place until May 31 unless otherwise amended.
District of Columbia Department of Insurance, Securities and Banking issues FAQs
The District of Columbia Department of Insurance, Securities and Banking issued responses to frequently asked questions regarding the effect of Covid-19 on the administration of securities laws and regulations of the District of Columbia. The FAQs respond to questions regarding filings, the processing of licensing or registration applications, and remote work for securities professionals, among others.
District of Columbia Department of Insurance, Securities and Banking issues order providing relief to policyholders
On April 27, the District of Columbia Department of Insurance, Securities and Banking issued an order imposing certain requirements on insurance companies authorized to conduct business in the District of Columbia. Among other things, insurance companies and premium finance companies are prohibited from terminating insurance contracts due to non-payment. Insurance companies must make reasonable accommodations for policyholders during the Covid-19 emergency, such as through waiving installment, late payment, or reinstatement fees, extending billing due dates and premium grace periods, and providing an option to use electronic payment technology. The order also provides guidance concerning premium relief and the department’s review of form and rate filings.
District of Columbia Department of Insurance, Securities and Banking issues bulletin regarding submission of filings
On April 24, the District of Columbia Department of Insurance, Securities and Banking issued a Bulletin 0X-SB-00X 03/20 suspending the procedures established by Bulletin 03-SB-04-03/21 in light of the Covid-19 public health emergency. Required filings and fee payments that would have been submitted pursuant to the procedures outlined in Bulletin 03-SB-04-03/21 must now be submitted to the department via PDF to a specified email address. Further, instead of physical checks, the associated payments must be submitted in electronic form in accordance with the instructions in the bulletin.
District of Columbia Department of Insurance, Securities and Banking issues bulletin to certain insurance companies
On April 23, the District of Columbia Department of Insurance, Securities and Banking issued a bulletin to insurers, captives, and risk retention groups regarding modified regulatory filing requirements during the public health emergency. While companies are still required to make all required electronic filings with the NAIC based on modified filing deadlines, if applicable, the department will allow insurers an additional 30 to 60 days, depending on the filing, to complete filings upon a request to the department on or before the normal deadline. The bulletin sets forth the filings eligible for 30- or 60-day extensions. The bulletin also provides guidance regarding electronic filings and signatures. Further, while the department will not conduct any on-site examination work during the stay-at-home order, the department may still request certain electronic records to track trends arising from the Covid-19 pandemic.
SEC issues multiple whistleblower awards
On April 20, the SEC announced a $5 million award to a whistleblower in an enforcement action. According to the SEC’s press release, the whistleblower “provided critical evidence of wrongdoing, which helped save time and resources in the SEC’s investigation.” The formal order also states that the whistleblower “promptly reported the information” and “suffered a unique hardship” by being terminated shortly after raising concerns internally.
Earlier on April 16, the SEC announced an award of more than $27 million to a whistleblower in an enforcement action. According to the SEC’s press release, the whistleblower provided “critical investigative leads,” tied in part to misconduct occurring overseas, that “advanced the investigation and saved significant Commission resources.” The formal order also stated that the whistleblower, among other things, provided substantial assistance and cooperation, relayed information that “helped the Commission further significant law enforcement interests,” and “repeatedly and strenuously” raised concerns about internal misconduct within the whistleblower’s organization. The award is the sixth largest overall award since the program began.
According to the SEC, as of April 20 it has awarded 80 individuals a total of approximately $430 million in whistleblower awards since its first award in 2012.
Alaska Department of Commerce issues special notice regarding premium finance company contracts
The Alaska Department of Commerce, Division of Banking and Securities (Division), issued a special notice responding to inquiries about premium finance companies’ contracts with a power of attorney to cancel all policies upon default. The division notes that while it does not have the authority over the contract or legal agreement, it encourages premium finance companies to review applicable guidance and recent bills passed by federal and state governments related to the Covid-19 crisis pertaining to late payments.
SEC announces temporary, conditional relief for certain business development companies
On April 8, the SEC announced an order providing temporary, conditional exemptive relief for business development companies (BDCs) to enable them to make additional investments in small and medium-sized businesses, including those with operations affected by Covid-19. Among other things, the relief will provide additional flexibility to BDCs to issue and sell senior securities to obtain capital. The relief is subject to certain investor protection conditions.
SEC issues statement on importance of disclosures for investors, markets, and the fight against Covid-19
On April 8, the SEC issued a statement regarding the importance of disclosure for investors, markets, and the fight against Covid-19. Companies are encouraged to issue disclosures that respond to investor interest in the company’s standing, operationally and financially, describe the company’s Covid-19 response, and discuss how the company’s operations and financial condition may change as efforts to fight Covid-19 progress. The guidance also provides specific considerations for quarterly earnings statements and calls, and forward-looking disclosures.