June 2025 One-Minute Reads

SEC withdraws proposed Rule 14a-8 amendments along with 13 other rulemaking proposals

The Securities and Exchange Commission (SEC) formally withdrew certain notices of proposed rulemaking issued between March 2022 and November 2023, including the Substantial Implementation, Duplication, and Resubmission of Shareholder Proposals Under Exchange Act Rule 14a-8 proposed rule. The SEC does not currently intend to issue final rules with respect to these proposals. See this Governance Beat article and this list of the 13 other withdrawn rules.

SEC publishes concept release on foreign private issuer eligibility

On June 4, following observation of the significant increase in the foreign private issuer (FPI) population between 2003 and 2023, the SEC published a concept release soliciting public comment with respect to potential changes to the definition of “foreign private issuer” and also issued this fact sheet. For more information, see this June 10 Cooley alert and this Governance Beat article. See also comments from each of Chair Paul Atkins, Commissioner Mark Uyeda, Commissioner Caroline Crenshaw and Commissioner Hester Peirce.

SEC updates legal proceedings C&DIs

The SEC’s Division of Corporation Finance updated compliance and disclosure interpretations (C&DIs) for Item 103 of Regulation S-K (legal proceedings):

• Withdrawn: Question 105.02, which had interpreted “local provisions” as sufficiently broad enough to require disclosure of environmental actions by foreign governments.
• Revised: Question 105.03, which removed references to Item 103 instructions and added citations to the rule directly.

See these redlined versions of the updates on the SEC’s website.

SEC hosts roundtable on executive compensation disclosure

The SEC hosted a roundtable to discuss the current landscape of executive compensation disclosure. As detailed in this June 27 Cooley alert, “The SEC commissioners who spoke appeared uniform in their conviction that the existing rules are unduly complex, repetitive and overly inclusive, and have lost sight of their ultimate purpose of providing investors with appropriate information about corporate decision-making without imposing compliance costs out of proportion to the investor benefit, as they believe is presently the case.” Read the remarks of Atkins, Uyeda, Peirce and Crenshaw. The webcasts also are available on the SEC’s website.

Founder faces 42-month prison term for novel insider trading

Terren Peizer, founder of Ontrak, was recently sentenced to 42 months in prison after being convicted of insider trading in 2024. Peizer’s case was the first guilty verdict based solely on an executive’s use of a Rule 10b5-1 trading plan. See the Department of Justice (DOJ) press release.

DOJ releases updated FCPA enforcement guidelines

On June 9, the DOJ announced updated Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act (FCPA). In a speech, Matthew Galeotti, head of the DOJ’s Criminal Division, summarized the updated guidelines, noting that they “provide evaluation criteria and a non-exhaustive list of factors to balance when deciding whether to pursue an FCPA case.” The factors include whether the alleged misconduct:

1. Deprived specific and identifiable US entities of fair access to compete.
2. Involves key infrastructure or assets.
3. Bears strong indicia of corrupt intent tied to particular individuals and serious misconduct.
4. Is associated with the criminal operations of a cartel or transnational criminal organization.

Galeotti went on to say that:

The through-line is that these Guidelines require the vindication of U.S. interests… It is not about the nationality of the subject or where the company is headquartered. In plain terms, conduct that genuinely impacts the United States or the American people is subject to potential prosecution by U.S. law enforcement. Conduct that does not implicate U.S. interests should be left to our foreign counterparts or appropriate regulators.

Per a statement from Deputy Attorney General Todd Blanche:

We are shifting prosecutorial resources toward cases that clearly implicate U.S. national security and economic competitiveness rather than penalizing legitimate business operations abroad. Under this Administration, the FCPA will be enforced firmly but fairly, targeting misconduct that undermines American companies and our global standing, while eliminating unnecessary burdens.

For more information, see this June 10 Reuters article.

Glass Lewis updates 2026 pay-for-performance assessments

Glass Lewis issued a client communication previewing changes to its quantitative pay-for-performance (P4P) model that will become effective for shareholder meetings starting in 2026. The announcement signals significant revisions to the structure and scope of the Glass Lewis P4P assessments for US and Canadian companies. Glass Lewis also indicated it will be expanding its services to cover companies listed on major exchanges in the UK, Europe and Australia. For additional information on this upcoming change, see this June 30 Cooley alert.

CARB holds workshop on climate disclosure laws

The California Air Resources Board (CARB) held a virtual public workshop on May 29 to support the development of California’s Corporate Greenhouse Gas Reporting Program, authorized by Senate Bill (SB) 253, and the Climate-Related Financial Risk Disclosure Program, authorized by SB 261.

SB 253 requires US companies with total annual revenues in excess of $1 billion that do business in California to:

• Annually disclose their Scopes 1, 2 and 3 greenhouse gas emissions for the prior fiscal year.
• Begin disclosures in 2026 for Scopes 1 and 2 emissions (covering fiscal year 2025).
• Include third-party limited assurance for Scopes 1 and 2 emissions in the initial disclosures.
• Include Scope 3 emissions in subsequent years.

SB 261 applies to both public and private US companies that do business in California with annual revenues of $500 million and requires them to:

• Publish biennial climate-related financial risk reports.
• Submit the first report by January 1, 2026.

Despite it becoming clear during the workshop that the July 1, 2025, deadline for final regulations would not be met – and with no specific timeline for final regulations provided – CARB staff confirmed that there would be no changes to the statutory reporting deadlines for SB 261 and SB 253 (Scopes 1 and 2 due in 2026, and Scope 3 due in 2027).

Unfortunately, the workshop also provided very limited details on the content of any future CARB guidance, including important questions, such as when SB 253 disclosures will be due in 2026 or how much alignment with external frameworks is expected for SB 261 disclosures.

CARB has posted a recording of this workshop.

Director’s Corner – Guidance from Beth Sasfai, leader of Cooley’s ESG and sustainability advisory practice

Director tenure

Long-tenured directors are regularly viewed as out of touch, beholden to management or resistant to change. Proxy advisors and institutional investors often use nine+ years on a board as a red flag to invite deeper scrutiny of director contributions and independence. But in light of recent regulatory and geopolitical disruptions, there’s a growing recognition that one or two long-tenured directors can bring valuable continuity, historical insight and independent judgment to a board – especially in times of crisis or in industries with long investment cycles.

Companies should reimagine how they communicate the value of their long-tenured directors. Governance leaders should proactively enhance proxy disclosures and director biographies to highlight director-specific contributions, along with robust director assessment and refreshment processes. Be prepared to articulate in investor engagement how a long-serving director who has led through a CEO transition or a major strategic shift serves as an independent, engaged steward. Investors may still scrutinize long-tenured directors, but many are open to thoughtful explanations that show how independence, tenure and refreshment are being actively managed.

Read more about director tenure.

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