Public Company Advisory HighlightsSEC Chairman Atkins Testifies Before Congressional Oversight Committees
On February 11 and 12, 2026, Paul Atkins, Chairman of the Securities and Exchange Commission (SEC) testified at oversight hearings before the U.S. House of Representatives Committee on Financial Services and the U.S. Senate Committee on Banking, Housing and Urban Affairs, respectively. In his statement provided to the House Committee (and the similar statement provided to the Senate committee), Chairman Atkins addressed “regulatory creep” that has made “the path to public ownership narrower, costlier, and saddled with rules that can create more friction than benefit.” He also discussed modernizing oversight of digital assets, developments with the Public Company Accounting Oversight Board and recent Enforcement Division activity. In responding to questions from Representatives in the hearing on his approach to reforming disclosure regulations and pursuing fraud in cryptocurrency markets, he largely echoed the themes in the statement. He also indicated the SEC is reviewing the practices of proxy advisory firms such as Institutional Shareholder Services (ISS) and Glass Lewis. The Senate committee hearing discussion covered, among other things, access to more investment opportunities for smaller investors, the SEC’s enforcement program and proxy advisory firms. SEC’s New Director of Division of Enforcement Articulates Enforcement Priorities in First Speech in Role
On February 11, 2026, Judge Margaret Ryan, Director of the SEC’s Enforcement Division, delivered a speech to the Los Angeles County Bar Association. Noting that these were her first public remarks since taking on the role, Judge Ryan stated that her guiding principles as Director are “integrity, honor, fidelity to the law, and an unwavering commitment to the fair and judicious use of the formidable power and resources the federal government.” While emphasizing that that the Enforcement Division has limited resources, she made clear that reports that enforcement had been pushed to the “wayside” were overblown and incorrect. She went on to articulate key priorities of the enforcement program, with protecting everyday retail investors from fraud being the principal focus. In particular, Judge Ryan cited preventing and redressing accounting frauds, insider trading, wash trading and other market manipulation schemes. Notably, Judge Ryan emphasized that the Enforcement Division would not turn a blind eye to non-fraud securities law violations. Specifically, she highlighted the need for public companies to live up to their obligations to maintain adequate books and records and devise and maintain systems of internal accounting controls to ensure compliance with their reporting obligations. In these non-fraud situations, Judge Ryan expressed an interest in working with companies to enter “resolutions that recognize wrongdoing while rectifying the violation or charting a firmer path toward compliance.” Nasdaq Proposes Immediate Delisting for Companies Below $5 Million Market Value
In January, the Nasdaq Stock Market (Nasdaq) filed a rule proposal with the SEC that would permit the immediate suspension and delisting of a company listed on the Nasdaq Global Market (including the Global Select Market) or the Nasdaq Capital Market if its market value of listed securities remains below $5 million for 30 consecutive business days. Nasdaq states that a sustained market value at this level typically reflects fundamental, non-temporary business challenges and that such companies are unlikely to regain and maintain compliance with continued listing standards. Nasdaq further notes that very low-value securities present liquidity challenges and make it more difficult to maintain fair and orderly markets. Unlike most Nasdaq continued listing deficiencies, the proposed rule would allow for suspension and delisting to take effect without a prior hearing and without any automatic stay. SEC Staff Issues Interpretive Letter on “Group” Status in Derivatives Transactions
In January, the Staff of the Office of Mergers and Acquisitions of the SEC’s Division of Corporation Finance released an interpretive letter to Bank of America and its affiliates that provides guidance on when counterparties to derivative contracts entered into in the ordinary course and involving public company securities will not be deemed to be a “group” under Sections 13(d)(3) or 13(g)(3) of the Exchange Act.
As noted in the request for guidance, there previously existed substantial uncertainty as to whether parties to a derivative contract would be considered to be “acting as” a “group” and be required to make Schedule 13D or 13G or Section 16 Form 3, 4 and 5 filings.
SEC Issues New and Updated C&DIs on Tender Offers, Going Private Transactions and Registration of Resale of Shares on Form S-4
On February 11, 2026, the Staff of the SEC’s Division of Corporation Finance issued several new or amended Compliance and Disclosure Interpretations (C&DIs) related to tender offers, going private transactions and the registration of the resale of shares on Form S-4. With respect to Form S-4, the updated guidance indicates that, where an issuer has filed a Form S-4 registration statement in connection with a business combination transaction and also seeks to register for resale on the Form S-4 certain securities which had previously been offered and sold pursuant to an exemption from Section 5 to insiders of the target company in connection with the same business combination, those securities may be registered for resale on the Form S-4 because they were issued in connection with the same business combination transaction. Further, once the business combination transaction is completed, the registrant may file a post-effective amendment to the Form S-4 on a form for which it is eligible (e.g., Form S-1 or S-3), for the purpose of maintaining an updated resale prospectus. The new C&DIs on tender offers and going private transactions provide clarity on exemptions from registration available for securities issued in those transactions; when mini tender offers may commence; and parent tender offers for securities of majority-owned subsidiaries.
Wells Fargo Wealth & Investment Management Launches Internal Proxy Voting System
In late January 2026, Wells Fargo Wealth & Investment Management (WIM) announced the launch of a proprietary proxy voting service for client assets where it has both investment discretion and proxy voting authority. With the new approach, the firm will direct proxy voting for impacted assets based on its own custom policy and voting instructions focused on clients’ long‑term economic interests, bringing increased independence to this important investment service. Reuters has reported that the introduction of the new service also means that WIM has severed its ties with the proxy advisory firm ISS, similar to the recent approach taken by JP Morgan Asset Management upon the launch of its own internal artificial intelligence platform.
SEC Appoints New Chairman and Board Members to PCAOB
On January 30, 2026, the SEC announced the appointment of Demetrios (Jim) Logothetis as Chairman, and Mark Calabria, Kyle Hauptman, and Steven Laughton as Board members, of the Public Company Accounting Oversight Board (PCAOB). George Botic will continue his service as a Board member. The Sarbanes-Oxley Act of 2002 established the PCAOB to oversee the audits of public companies and broker-dealers in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB accomplishes these goals through registering public accounting firms, setting auditing standards, conducting inspections, and pursuing disciplinary actions. The PCAOB is subject to oversight by the SEC. |
