Monthly Archives: April 2016

Freedom to Trade in the Age of Heightened Market Protection

Anthony Candido is a partner in the New York office of Clifford Chance LLP. This post is based on a Clifford Chance publication by Mr. Candido, David Yeres, Robert Houck, and Benjamin Berringer; the complete publication, including footnotes, is available here.

The CFTC is taking a position in enforcement litigation that would lower the bar for proving unlawful price manipulation. By abandoning the requirement of proving that the accused had a specific intent to create an artificial price and replacing it with an intent to influence price, the CFTC would materially ease its burden of proof. While doubtlessly motivated by the desire to enhance price integrity, the CFTC’s position is being strongly questioned from a legal and a policy point of view by the futures industry. A group representing the major futures industry institutions and trade associations is seeking to oppose the CFTC in an amicus brief on grounds that the CFTC’s position deviates from decades of precedent and would blur the line between legitimate trading and manipulation to create inappropriate legal uncertainty, which would act to the detriment of well-functioning markets.

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Rule 144: Resale of REIT Shares in Exchange for OP Units

Daniel P. Adams is a partner in the Business Law Department at Goodwin Procter LLP. This post is based on a Goodwin Procter publication by Mr. Adams, Yoel Kranz, Audrey S. Leigh, and David H. Roberts.

On March 14, 2016, the SEC issued a no-action letter [1] permitting holders of shares of common stock of a publicly traded REIT, or REIT shares, received in exchange for privately placed units of the REIT’s operating partnership, or OP units, to tack the holding period of the OP units to the REIT shares for purposes of Rule 144. This new position is a very significant change from the way Rule 144 has been interpreted historically by the SEC, and may lead to the elimination of registration rights in many OP unit transactions as well as to changes in the way OP unit transactions are structured.

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SEC Enforcement of Internal Control Over Financial Reporting

Avrohom J. Kess is partner and head of the Public Company Advisory Practice and Yafit Cohn is an associate at Simpson Thacher & Bartlett LLP. This post is based on a Simpson Thacher memorandum by Mr. Kess and Ms. Cohn.

On March 10, 2016, the Securities and Exchange Commission (“SEC”) instituted settled cease-and-desist proceedings against the oil company Magnum Hunter Resources Corporation (“MHR”), its Chief Financial Officer (“CFO”), Chief Accounting Officer (“CAO”), audit engagement partner and a consultant, due to alleged failures to “properly implement, maintain, and evaluate” internal control over financial reporting (“ICFR”). [1]

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Weekly Roundup: March 25-March 31


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This roundup contains a collection of the posts published on the Forum during the week of March 25, 2016 to March 31, 2016.


2016 Spin-Off Guide





The Inside Counsel Revolution






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