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

Some companies have begun to disclose pay ratios in their proxy statements in advance of the SEC requirement. We have included a sample below. Of course, you’ll want to compare the samples to the rules before relying on them.

Novagold Resources Inc.

CEO Pay Ratio – 13.5:1

We believe our executive compensation program must be consistent and internally equitable to motivate our employees to perform in ways that enhance shareholder value. We are committed to internal pay equity, and the Compensation Committee monitors the relationship between the pay of our executive officers and the pay of our non-executive employees.  The Compensation Committee reviewed a comparison of our CEO’s annual total compensation in fiscal year 2015 to that of all other Company employees for the same period.  The calculation of annual total compensation of all employees was determined in the same manner as the “Total Compensation” shown for our CEO in the “Summary Compensation Table” on page 45 of this Circular.  Pay elements that were included in the annual total compensation for each employee are:

–salary received in fiscal year 2015

–annual incentive payment received for performance in fiscal year 2015

–grant date fair value of stock option and PSU awards granted in fiscal year 2015

–Company-paid 401(k) Plan or RRSP match made during fiscal year 2015

–Company-paid ESPP match made during fiscal year 2015

–Company-paid life insurance premiums during fiscal year 2015

–Auto allowance paid in fiscal year 2015

–Reimbursement for Company-paid executive physical during fiscal year 2015

Our calculation includes all employees as of November 30, 2015. We applied a Canadian to U.S. dollar exchange rate to the compensation elements paid in Canadian currency.

We determined the compensation of our median employee by: (i) calculating the annual total compensation described above for each of our employees, (ii) ranking the annual total compensation of all employees except for the CEO from lowest to highest (a list of 12 employees), and (iii) since we have an even number of employees when not including the CEO, determining the average of the annual total compensation of the two employees ranked sixth and seventh on the list (“Median Employee”).

he annual total compensation for fiscal year 2015 for our CEO was $5,207,257, and for the Median Employee was $386,962. The resulting ratio of our CEO’s pay to the pay of our Median Employee for fiscal year 2015 is 13.5 to 1.

Adams Resources & Energy, Inc.

Pay Ratio Disclosure Rule

In August 2015 pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd – Frank Act”), the Securities and Exchange Commission adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (‟PEO”). The Company’s PEO is Mr. Smith.  Registrants must comply with the pay ratio rule for the first fiscal year beginning on or after January 1, 2017.  The purpose of the new required disclosure is to provide a measure of the equitability of pay within the organization.  The Company believes its compensation philosophy and process yield an equitable result and is presenting such information in advance of the required disclosure date as follows:

Median Employee total annual compensation   $ 60,052

Mr. Smith (‟PEO”) total annual compensation   $ 400,000

Ratio of PEO to Median Employee Compensation 6.7:1.0

In determining the median employee, a listing was prepared of all employees as of December 31, 2015. Employees on leave of absence were excluded from the list and wages and salaries were annualized for those employees that were not employed for the full year of 2015.  The median amount was selected from the annualized list.  For simplicity, the value of the Company’s 401(k) plan and medical benefits provided was excluded as all employees including the PEO are offered the exact same benefits and the Company utilizes the Internal Revenue Service safe harbor provision for 401(k) discrimination testing.  As of December 31, 2015 the Company employed 809 persons of which 557 are professional truck drivers.

First Trinity Financial Corporation

2015 Compensation Disclosure Ratio of the Median Annual Total Compensation of All Company Employees to the Annual Total Compensation of the Company’s Chief Executive Officer

The 2015 compensation disclosure ratio of the median annual total compensation of all Company employees to the annual total compensation of the Company’s chief executive officer is as follows:

Category                                                                     2015 Total Compensation

and Ratio

Median annual total compensation of

all employees (excluding Gregg E. Zahn)                                  $ 87,538

 

 

Annual total compensation of Gregg E. Zahn,

Chief Executive Officer                                                           $ 716,780

 

Ratio of the median annual total compensation

of all employees to the Annual total compensation

of Gregg E. Zahn, Chief Executive Officer                               12.21 %

 

NorthWestern Corporation

CEO Pay Ratio and Wealth Accumulation

For several years, we have voluntarily disclosed our CEO to median employee pay ratio in our proxy statement. To determine the median for our prior calculation, we considered only full-time employees as of the last day of the calendar year. Our prior calculation of the ratio included all components of compensation available to our CEO and other employees – base salary, annual cash incentive (at the targeted level), and long-term incentive awards (at the targeted level) – and excluded any benefits (which do not differ materially between executives and employees generally) and any overtime pay that employees received.

As a result of the recently adopted rules under Dodd-Frank Act, beginning with our 2018 proxy statement, the SEC will require disclosure of the CEO to median employee pay ratio for 2017 compensation. The method of calculating the required disclosure for 2017 compensation will differ from the method we previously used in calculating our ratio. Among other differences, we will be required to include: (i) part-time and full-time employees to determine the median employee; and (ii) overtime pay and the value of benefits in the calculation of total compensation.

Accordingly, in the pay ratio table below, we have presented two calculations of our CEO to median employee pay ratio. The first ratio is calculated using the methodology we have used in our prior proxy statements. We will refer to this ratio as the NorthWestern Calculation. The second ratio is calculated in accordance with what the SEC will require in the future pursuant to Item 402(u) of Regulation S-K. We will refer to the second ratio as the Dodd-Frank Calculation. We believe presentation of these two ratios this year will provide an informative bridge from our practice of voluntarily disclosing our CEO to median employee pay ratio using the NorthWestern Calculation these past several years to the required disclosure of such ratio in the future using the Dodd-Frank Calculation.

 

With respect to the Dodd-Frank Calculation, we identified the median employee by examining the 2015 total cash compensation for all individuals, excluding our CEO, who were employed by us on December 18, 2015, the last day of our payroll year (whether employed on a full-time, part-time, or seasonal basis). For such employees, we did not make any assumptions, adjustments, or estimates with respect to total cash compensation, and we did not annualize the compensation for any full-time employees that were not employed by us for all of 2015. After identifying the median employee, we calculated annual total compensation for such employee using the same methodology we use for our named executive officers as set forth in the 2015 Summary Compensation Table later in this proxy statement.

 

As illustrated in the table below, our CEO to median employee pay ratio is 19:1 when calculated using the Dodd-Frank Calculation and 26:1 when using the NorthWestern Calculation.

    NorthWestern Calculation   Dodd-Frank Calculation
 

President

and CEO

   Median Employee   President and CEO   Median Employee
Base Salary   $ 578,231   $ 79,539   $ 573,567   $ 86,838
Annual Cash Incentive                
  Percent of base salary   80 %   6 %        
  Targeted annual cash incentive   $ 462,585 $ 4,772        
Non-Equity Incentive Plan Compensation           $ 370,068   $ 1,703

Performance Unit Awards under

Long-Term Incentive Program

                
  Percent of base salary   150 %   — %        
  Targeted long-term incentive   $ 867,347   $ —        

Restricted Share Grants under

Executive Retention / Retirement Program

                
  Percent of base salary   50 %   — %        
  Targeted executive retention / retirement incentive   $ 289,116   $ —        
Stock Awards           $ 1,131,121   $ —
Change in Pension Value and Nonqualified Deferred Compensation Earnings (1)           $ 39,285   $ 2,755
All Other Compensation           $ 41,564   $ 22,734
TOTAL   $ 2,197,279   $ 84,311   $ 2,155,605   $ 114,030
                 
CEO Pay as Multiple of Median Employee   26 : 1   19 : 1
(1) These amounts are attributable to a change in the value of each individual’s defined benefit pension account balance and do not represent earned or paid compensation. Pension values are dependent on many variables including years of service, earnings, and actuarial assumptions.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

The CFTC has proposed guidance that certain capacity contracts in electric power markets and certain natural gas peaking supply contracts should not be considered “swaps” under the Commodity Exchange Act. The guidance does not provide a precise definition of the excluded contracts but identifies their common characteristics as follows:

“[T]he natural gas and electric power contracts discussed above are all entered into by commercial market participants, who contemplate physical settlement of the transactions, in response to regulatory requirements, the need to maintain reliable supplies, and practical considerations of storage or transport. In each case, the particular commodities covered by the contract are needed by at least one of the parties for the normal operation of its business, and the specific identity of the counterparty is an important consideration because of, for example, concerns about reliability or the practicability of supply.”

In addition, the Commission identified that the contracts are “not traded on an organized market or over-the-counter, and do not have severable payment obligations,” and are entered into “by commercial or non-profit entities to assure availability of a commodity, not to hedge against risks arising from a future change in price for the commodity or to serve a speculative or investment purpose.”

The CFTC requested comments on the guidance within 30 days after its publication in the Federal Register.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

On March 29, 2016, the Consumer Financial Protection Bureau (CFPB) released its latest Monthly Complaint Report for March 2016, which provides an overview of three-month trends in consumer complaints.  This Monthly Report also highlights consumer complaint related to debt collection and complaints from Florida.

Debt Collection Spotlight

The CFPB has received more complaints related to debt collection products and services than any other financial product or service.  As of March 1, 2016, the CFPB handled a total of 834,400 consumer complaints and 219,200 were related to debt collection.  Some of the debt collection complaints relate to:

  • Companies allegedly collecting debts that are not owed from consumers;
  • Debt collectors allegedly repeatedly calling consumers in an effort to collect debts; and
  • Debt collectors allegedly unable to verify debts.

According to the Monthly Complaint Report, the two most complained about debt collection companies have been Encore Capital Group and Portfolio Recovery Associates, Inc.

National Complaint Overview

As of March 1, 2016, the CFPB has handled 834,400 consumer complaints nationally across all financial products and services.  The Monthly Complaint Report includes the following statistics about those complaints:

  • Debt collection complaints represented 26 percent of the total number of complaints, surpassing mortgage related complaints for the first time since the CFPB began accepting consumer complaints in July 2011;
  • Complaints related to credit reporting rose 13 percent between January and February 2016;
  • Of the five most populous states, New York experienced the greatest month-to-month complaint volume percentage increase and Texas experienced the greatest month-to-month complaint volume decrease; and
  • The most complained about companies between October and December 2015 were Equifax, Experian, and TransUnion.

Florida Area Complaints

In addition to providing national consumer complaint trends, the Monthly Complaint Report also highlights complaints originating from Florida.  Of the 834,400 complaints that have been submitted to the CFPB, 80,200 have originated from Florida.  Consumer complaints submitted by Florida consumers revealed the following:

  • Florida consumer complained the most about mortgage related products and services;
  • Florida debt collection complaints—24 percent of total complaints submitted—are only slightly lower than the national average at 26 percent of total complaints; and
  • Florida consumer complained the most about Equifax, Bank of America, and Experian.

CFPB’s Consumer Complaint Database

In June 2012, the CFPB launched its Consumer Complaint Database, which permits consumers to submit complaints about consumer financial products and services.  Once the CFPB receives a complaint it forwards the complaint to the relevant company for a response.  Companies generally have 15 days to respond to the complaint, unless an extension is secured in the meantime.  The consumer complaint and company’s response, if one is provided, is published on the public facing Consumer Complaint Database, which can be accessed and viewed by the public.  The information provided on the database can be valuable to not only consumers, but also to companies.  For example, it provides a valuable tool for companies to understand how consumers view the quality of the company’s products and services.  It also provides companies with an opportunity to evaluate whether complaint trends suggest that problems exist with certain products and services that need to be addressed to avoid or minimize regulatory action.  As such, although the Consumer Complaint Database is not generally viewed favorably by financial industry companies, it can provide valuable information.

For more information on the CFPB’s consumer complaint process go here.

You can view the CFPB’s Monthly Complaint Report here.

You can view the CFPB’s Consumer Complaint Database here.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

Zane Gilmer is a member of the firm’s litigation practice group.  His practice focuses on business litigation and compliance and he is a member of the firm’s CFPB taskforce.  Zane works out of the firm’s Denver office and he can be reached at zane.gilmer@stinson.com or 303.376.8416.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

 

 

On March 30, 2016, the Consumer Financial Protection Bureau (CFPB) announced an enforcement action against student debt relief company Student Aid Institute, Inc., and its chief executive officer, Steven Lamont, for allegedly engaging in deceptive acts and practices in connection with student debt relief services offered to consumers.

The CFPB alleges that Student Aid Institute deceived customers about the benefits of its services and misrepresented that payment of fees were required to participate in federal student loan programs, when no such fees were required.  Specifically, the CFPB alleges that Student Aid Institute:

  • Charged illegal upfront fees for debt relief services, prior to the company actually negotiating or settling any consumer debts;
  • Deceived consumers about the amount of money they would save by using the company’s services, whether they were eligible for loan forgiveness, whether they had been preapproved for specified programs, and whether the fees were required to participate in the federal programs;
  • Failed to provide consumers with privacy notices; and
  • Falsely represented an affiliation with the Department of Education in its marketing materials.

As part of the consent order entered by the CFPB, Student Aid Institute and Lamont must:

  • Shut down their debt relief operations and cease any further debt relief services;
  • Cancel all contracts with consumers and stop charging them for services;
  • Ensure that consumers do not miss repayment deadlines; and
  • Pay a civil penalty of $50,000.

The CFPB has made it clear that one of its enforcement priorities is to take action against companies that are engaging in allegedly illegal practices within the student debt relief industry.  This enforcement action simply underscores that ongoing priority and it should also serve as a reminder to participants in that industry to review their policies, procedures, and practices to ensure compliance with relevant law and the CFPB’s expectations.

You can view the CFPB’s consent order here.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

Zane Gilmer is a member of the firm’s litigation practice group.  His practice focuses on business litigation and compliance and he is a member of the firm’s CFPB taskforce.  Zane works out of the firm’s Denver office and he can be reached at zane.gilmer@stinson.com or 303.376.8416.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

 

The DOJ has announced a one-year pilot program in its Fraud Section’s FCPA Unit. The program provides guidance to DOJ prosecutors for corporate resolutions in FCPA cases, and is designed to motivate companies to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs.

The pilot program describes what the DOJ means by “voluntary self-disclosure,” “full cooperation,” and “remediation.” It also explains the credit available to companies that in fact voluntarily self-disclose FCPA misconduct, fully cooperate with investigations, and remediate. The pilot program builds on the Yates Memorandum issued in September 2015.

The guidance provides that if a company chooses not to voluntarily disclose its FCPA misconduct, it may receive limited credit if it later fully cooperates and timely and appropriately remediates – but any such credit will be markedly less than that afforded to companies that do self-disclose wrongdoing. By contrast, when a company not only cooperates and remediates, but also voluntarily self-discloses misconduct, it is eligible for the full range of potential mitigation credit. That means that if a criminal resolution is warranted, the Fraud Section may grant a reduction of up to 50 percent below the low end of the applicable U.S. Sentencing Guidelines fine range, and generally will not require appointment of a monitor. In addition, where those same conditions are met, the Fraud Section’s FCPA Unit will consider a declination of prosecution.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

The CFTC announced that a federal court in New York issued a Consent Order imposing a permanent injunction against CFTC Defendants Heet Khara and Nasim Salim, residents of the United Arab Emirates (UAE), prohibiting them from engaging in spoofing in violation of the Commodity Exchange Act.

The Order requires Khara to pay a $1.38 million civil monetary penalty and Salim to pay a $1.31 million civil monetary penalty to settle CFTC charges of spoofing in the gold and silver futures markets. The Order also imposes permanent trading and registration bans on Khara and Salim.

According to the Order, between February 2015 and April 28, 2015, Defendants Khara and Salim, both individually and in a coordinated fashion, regularly placed larger aggregate orders for gold and silver contracts on the Commodity Exchange, Inc. (COMEX) opposite smaller orders, and cancelled the larger orders after the smaller orders were executed. The CFTC stated the Defendants placed the larger orders with the intent to cancel them before execution.

The Defendants did not admit nor deny the allegations of the complaint or the findings of fact and conclusions of law contained in the Order.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

 

FinCEN, a bureau of the Department of the Treasury, has proposed amendments to the definitions of “broker or dealer in securities” and “broker-dealer” under the regulations implementing the Bank Secrecy Act. This rulemaking would amend those definitions explicitly to include funding portals that are involved in the offering or selling of crowdfunding securities pursuant to section 4(a)(6) of the Securities Act of 1933. The consequence of those amendments would be that funding portals would be required to implement policies and procedures reasonably designed to achieve compliance with the Bank Secrecy Act requirements currently applicable to brokers or dealers in securities. The proposal to specifically require funding portals to comply with the Bank Secrecy Act regulations is intended to help prevent money laundering, terrorist financing, and other financial crimes.

It may be necessary, but it is a further complication to the already unwieldy crowdfunding structure under the JOBS Act.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

 

Apple has filed its Form SD for the year ended December 31, 2015. It includes this disclosure:

The combination of training, public reporting and a ticking clock drove the number from 82 smelters and refiners participating in a Third Party Audit program by the end of 2013 to 242 participating smelters and refiners by the end of 2015. Of these 242 participating smelters and refiners, 86% had already completed a Third Party Audit by the end of 2015, while the other 14% were in the process of undergoing such a Third Party Audit as of December 31, 2015.

That’s impressive.

How did it do it? By spending enormous time and energy, and a non-negotiable policy:

Still, some smelters and refiners chose not to take advantage of Apple’s assistance programs, while others refused to take part in any Third Party Audit entirely. Neither pressure nor incentives for help were enough to persuade them to comply. Accordingly, Apple directed the removal of 35 smelters and refiners not willing to participate in a Third Party Audit, and as of December 31, 2015, these 35 smelters and refiners are no longer reported in Apple’s supply chain. In addition, Apple has notified its suppliers that it has recently required the removal of another refiner from its supply chain for its failure to satisfy requirements in connection with its Third Party Audit and its subsequent delisting by the LBMA after December 31, 2015. Apple has had no choice but to remove these smelters and refiners from its supply chain, as Apple views compliance as non-negotiable.

The following disclosure is also interesting:

Based on the reports reviewed by Apple and additional information provided by iTSCi, Apple has received confirmation that three incidents linked to smelters reported in Apple’s supply chain have occurred in which individuals identified as members or potential members of organizations within the meaning of “armed groups,” as defined in Item 1.01(d)(2) of Form SD, in particular the police in the DRC and the DRC national army, were alleged to be involved. Each incident appears to have involved no more than a few individuals in isolated theft, illegal tax or similar criminal activity, potentially for personal gain, and, based on information received to date, the alleged perpetrators have been sanctioned or the specific incident has otherwise received some level of official redress by the local authorities. Apple continues to actively investigate the follow-up actions that have been taken to address these incidents. However, with respect to these three incidents, Apple has not, to date, been able to determine whether specific minerals were included in Apple’s products. The challenges with tracking specific mineral quantities through the supply chain currently prevent the traceability of any specific mineral shipment through the entire manufacturing process.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

lululemon athletica inc.’s Form 10-K includes the following risk factor:

Our business could be negatively affected as a result of actions of activist stockholders, and such activism could impact the trading value of our securities.

Responding to actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of management and our employees. Such activities could interfere with our ability to execute our strategic plan. In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our board of directors. The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.

It’s an interesting idea, but I doubt it will become universal. And many will claim an activist investor might improve the business.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.

A GAO study found the U.S. financial regulatory structure is complex, with responsibilities fragmented among multiple agencies that have overlapping authorities. As a result, financial entities may fall under the regulatory authority of multiple regulators depending on the types of activities in which they engage. While the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) made a number of reforms to the financial regulatory system, it generally left the regulatory structure unchanged.

GAO noted U.S. regulators and others have noted that the structure has contributed to the overall growth and stability in the U.S. economy. However, it also has created challenges to effective oversight. The GAO study found fragmentation and overlap have created inefficiencies in regulatory processes, inconsistencies in how regulators oversee similar types of institutions, and differences in the levels of protection afforded to consumers.

In the study GAO recommended that Congress should consider whether changes to the financial regulatory structure are needed to reduce or better manage fragmentation and overlap. Congress should also consider whether legislative changes are needed to align FSOC’s authorities with its mission to respond to systemic risks.

ABOUT STINSON LEONARD STREET

Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.