Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

The second Form SD and related conflicts minerals report has been filed (our blog on the first one is here).  They are interesting documents but may still not be the holy grail of precedents because of, among other things, the use of terms like “Conflict Free Undeterminable” which drifts from the SEC lexicon of “DRC conflict undeterminable.”

And of course they freely make the “unconstitutional confession,” the downside of which may only exist in the minds of First Amendment lawyers.  I expect many issuers will not follow suit.  Because why do it if you don’t have too?

But it looks like someone with a complex supply chain that tried hard to do the right thing but not wanting to over lawyer the project in the process or add on layers of consultants.  It’s easy to imagine how this exercise taxed the precious resources of this accelerated filer with operational losses in ways not foreseen by the SEC’s cost-benefit analysis.

It does have some interesting statistics:

  • Of the 128 suppliers that are within the scope of the reasonable country of origin inquiry, the issuer received 74 responses to its request for information.
  • According to the filing “As the result of our due diligence survey, we have gathered 209 smelters and refineries names from our supply chain. Of those, 193 smelters and refineries are identified as CFSI’s known smelters and refineries, and 16 smelters and refineries are not validated or verified. Among these 193 smelters and refineries, 68 are on the list of CFSI’s certified Conflict Free Smelters (CFS) list and considered to be conflict free, and with respect to the other 125, the CFSI has not provided an opinion as whether or not the minerals procured from these smelters and refineries originate from the DRC or surrounding countries.”


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