A new milestone has finally been reached for board gender diversity: there are no longer any companies in the S&P 500 with all-male boards. According to a publication on US Board Diversity Trends in 2019, 45% of new board positions among the Russell 3000 were filled by women in 2019. This is up from 34% in 2018 and a substantial improvement compared with only 12% in 2008. Under the new law, public companies will be required to have at least one woman on their board of directors by the end of 2019.
President Trump recently tweeted that, beginning on 1 September 2019, importers can expect a 10% tariff on $300 billion of Chinese goods. While the Office of the US Trade Representative (USTR) has yet to issue specific coverage for this new 10% tariff, importers should expect to see the goods subject to it on the proposed Section 301 List 4. The USTR has also indicated that a List 4 exclusion request process could come on the heels of the current List 3 exclusion request timetable.
The Financial Accounting Standards Board recently signalled its intent to adopt a new two-bucket approach to stagger the effective dates for new major accounting standards. Under the new approach, the new standards' effective dates would be delayed for entities in bucket two (ie, smaller reporting and private companies, employee benefit plans and not-for-profit organisations) for at least two years after the effective dates for entities in bucket one (ie, other Securities and Exchange Commission filers).
The US State Department recently announced the issuance of another round of sanctions on the Russian government in relation to the Chemical and Biological Weapons Control and Warfare Elimination Act 1991, which will come into effect on 19 August 2019. While this second round of sanctions is unlikely to affect most US companies, it may affect US banks, but only with respect to transactions involving non-ruble bonds and funds from the Russian sovereign issued after 26 August 2019.
The US Treasury Department's Office of Foreign Assets Control (OFAC) recently issued its Iran-Related Civil Aviation Industry Advisory. The advisory seeks to inform the civil aviation industry of potential exposure to US enforcement actions and economic sanctions for engaging in or supporting unauthorised exports to Iran or designated Iranian airlines. While no new restrictions have been announced, the advisory's publication could signal that the OFAC is taking a greater interest in the Iranian aviation sector.
For US employers with 100 or more employees, extensive new information relating to their prior Equal Employment Opportunity-1 filings must soon be submitted. Specifically, in addition to categorising employees by race or ethnicity, gender and job type, employers must now assemble and submit aggregated employee data regarding compensation and annualised hours worked. Assembling the required data may be much more complicated than many employers are expecting, so it is important to begin planning now.
What does it take to plead a Caremark case that can survive a motion to dismiss? A recent case illustrates that a board can help establish one if it simply leaves compliance and risk oversight entirely to the prerogatives of management. However, the case is also a warning that directors should be proactive in conducting risk oversight and could face liability if they fail to make a good-faith effort to implement an oversight system and then monitor it.
The Internal Revenue Service recently released new informal guidelines regarding Section 965 of the Internal Revenue Code. Among other things, the guidelines contain information on making successive instalment payments, filing transfer agreements as a result of certain acceleration or triggering events and other matters relating to S corporation shareholders making the Section 965(i) election.
The tax drag and unsatisfactory options to deal with accumulated income often result in moving an offshore trust to the United States and giving up the tax deferral. However, there is an alternative method, suitable for very long-term trusts, that takes an almost diametrically opposite approach. Rather than restricting the US beneficiaries to the value of the original trust capital and virtually giving up on future tax deferral, this method sacrifices the original trust capital to a final payment of taxes and interest (or a gift to charity) and tries to maximise the duration of the deferral.
In a historic shift, the Department of Justice's Antitrust Division will now consider providing credit to companies in the charging and sentencing stages of an antitrust criminal investigation if they have a robust and effective antitrust compliance programme. While a positive step, significant questions remain regarding the extent to which the opportunity for compliance credit will incentivise companies to self-report criminal antitrust violations and how the guidance interacts with the division's leniency programme.
Blockstack Token LLC, a wholly owned subsidiary of Delaware public benefit corporation Blockstack PBC, recently became the first company to have an offering of digital assets qualified by the Securities and Exchange Commission under Regulation A. Although Blockstack's is the first Regulation A token offering to be qualified, it demonstrates the potential for other blockchain-based companies to use Regulation A as a viable capital-raising tool.
The Financial Accounting Standards Board will consider whether the adoption dates for new accounting standards should be delayed for small public companies and privately held businesses. Small business finance professionals at a recent Financial Accounting Standards Advisory Council meeting indicated that, while they may be comfortable following the same rules, smaller companies do not have the same resources as large public companies and need extra time to implement significant new accounting rules.
The enactment of the Taxpayer First Act brings with it several changes to the procedures and operations of the Internal Revenue Service (IRS). The act touches on (among other things) establishing the IRS Independent Office of Appeals, improving customer service and introducing changes to enforcement. However, it appears that many of the changes to the IRS appeals process are mere guidelines and do not apply to large taxpayers.
US secondary sanctions are sanctions that the United States can apply to wholly non-US actors in wholly non-US transactions of which the US administration disapproves. A sanctioned individual or entity can be put on the Specially Designated Nationals list, but there is no well-defined numerical threshold for imposing sanctions. This article identifies some of the problems with the application of secondary sanctions and offers some potential solutions.
US beneficiaries of foreign trusts are subject to a throwback tax regime and an interest charge when they receive distributions of accumulated income from the trust. To avoid these punitive payments, families often choose to convert or decant the trust to a US domestic trust. However, the easy answer may not be the best answer, as a trust that tries to rebound from an ill-considered move to the United States may face a tax on the way out – a toll charge that precludes returning offshore.
Sutter Health recently filed a motion to dismiss the Department of Justice's (DOJ's) complaint in intervention in a False Claims Act suit which alleged that Sutter had knowingly submitted and caused the submission of unsupported diagnoses codes for Medicare Advantage patients in order to inflate Medicare reimbursements. Sutter's motion reflects the industry's continued resistance to the DOJ's enforcement under the False Claims Act on the basis of potentially unsupported diagnoses codes for Medicare Advantage beneficiaries, without more evidence.
The Securities and Exchange Commission (SEC) recently requested public comment on ways to simplify, harmonise and improve the registration exemptions under the Securities Act. In its concept release, the SEC identified numerous topics to be addressed, such as evaluating the framework and coverage of existing registration exemptions. Any developments in this area will be of interest to the structured products industry.
A compensation consultant recently conducted a spot survey of 135 companies which looked at the prevalence and type of environment, social and governance (ESG) metrics used in incentive compensation plans, including metrics relating to the environment, employee engagement and culture and diversity and inclusion. Efforts to link ESG factors to executive compensation have been a common thread in numerous shareholder proposals.
In a long-awaited decision, the Supreme Court was expected to provide greater clarity on the extent to which litigants can challenge the Federal Communications Commission's Telephone Consumer Protection Act interpretations in private litigation. However, instead of deciding that issue, the court vacated the Fourth Circuit's ruling and remanded the case for further development.
At a recent G20 Summit press conference, President Trump said that he would not lift the existing Section 301 tariffs on China, but would also not add tariffs on any additional Chinese imports "for at least the time being" as part of an agreement to resume negotiations with China. This article summarises the current status of the Section 301 List 4 goods and the List 3 product exclusion process which commenced on 30 June 2019.