SEC role attributed to critic of weak corporate governance


Dive brief:

  • Renee Jones, professor at Boston College Law School, had been named lead the Ssecurities and the foreign exchange commission the corporate finance division and its rule making for Special Purpose Acquisition Companies (SPACs), climate change disclosure, cyber risk and other hot issues.
  • Jones, who criticized the weak corporate governance of private companies valued at over $ 1 billion in a 2017 article, has represented public and private companies on corporate and securities matters at Hill & Barlow . At Boston College, she teaches courses in financial regulation, startup governance, and securities regulation.

  • “Renee brings in-depth corporate governance and securities law expertise” to the corporate finance division, SEC Chairman Gary Gensler said in a statement.

Dive overview:

Since taking office as head of the SEC in April, Gensler has affirmed a strong set of regulatory and investor protection goals on issues ranging from crypto assets, fintech, and stock trading. by company executives to share buybacks, disclosure of short sales and mandatory electronic filings.

As the head of the corporate finance division, Jones will lead the development of the SEC’s rules on some of these and other matters. described by the agency June 11, including advice on proxy voting, market transparency, board diversity and SPACs.

Gensler, while warning of potential fraud, said last month that the SEC would “take a close look” at how SPACs raise funds from the public and merge with target companies.

The SEC received 700 filings this year from these shell companies seeking to go public, and 300 have been finalized, Gensler said in Congress testimony, calling the number of deposits an “unprecedented surge”.

The SEC slowed down the SPAC market earlier this year when personnel accountants issued a memo saying mandates attached to the PSPC stocks should be treated as liabilities rather than equity. The agency only approved 13 PSPCs in April compared to 109 in March.

A SPAC – or what Gensler has called a “blank” initial public offering – offers private companies a faster, cheaper alternative to traditional IPOs. A SPAC raises funds by selling shares that it lists on the stock exchange. It then merged with a private company.

Criticism of weak governance

In his 2017 article “The Unicorn Governance Trap,” Jones said weak corporate governance and regulation of private companies valued at over $ 1 billion has exposed investors to misconduct or mismanagement from the founders of the companies.

“The governance structures of the unicorns deviate significantly from those of traditional venture-backed start-ups,” she said, noting that founders, not investors, retain control over the board of directors. ‘administration.

“Investors and policymakers must take action to address the problem of irresponsible unicorns,” Jones said.


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