KMK Law Corporate & Securities Blog

On March 14, 2023, DXC Technology Company (“DXC”) settled with the Securities and Exchange Commission (“SEC”) for $8 million regarding alleged misleading disclosures in DXC’s public filings. The SEC claimed DXC made misleading disclosures related to its non-GAAP financial performance between 2018 and 2020.

On February 22, 2023, the New York Stock Exchange (NYSE) and on February 24, 2023, Nasdaq filed proposed listing standards with the U.S. Securities and Exchange Commission (SEC) to adopt executive compensation recovery rules. These proposed listing standards implement SEC Rule 10D-1 (the “Clawback Rule”) mandated by Section 954 of the Dodd-Frank Act. The SEC’s final rule directed U.S. stock exchanges to adopt listing standards requiring all listed companies to develop, implement, comply with and disclose a written policy providing for the recovery of incentive-based compensation received by executive officers where that compensation is based on erroneously reported financial information. The stock exchanges will prohibit the initial or continued listing of any security of an issuer that is not in compliance.

On December 14, 2022, the Securities and Exchange Commission amended insider trading rules by adopting new trading restrictions and disclosures to address potential abuses by executives. According to SEC Chair Gary Gensler’s statements in the SEC’s press release these amendments are needed to fill “potential gaps” where insiders trade “opportunistically on the basis of material nonpublic information.” The new rules amend Rule 10b5-1’s affirmative defense provisions to insider trading liability, create new reporting requirements for issuers, and update beneficial ownership reporting requirements for insiders.