Jay Knight Discusses Impact of Government Shutdown for SEC Filings

January 25, 2019
TheStreet, Compliance Week

Bass, Berry & Sims attorney Jay Knight provided insight for two separate articles covering  the broader economic fallout of the government shutdown on investors. At more than 30 days and counting, the 2018-2019 government shutdown is now the longest in history, with government agencies either shuttered completely or operating on an extremely limited budget until a resolution is reached. Among those agencies impacted by the shutdown is the Securities and Exchange Commission (SEC), charged with overseeing the securities market.

In addition to the potential of delayed IPOs, delayed M&A transactions are possible as the shutdown drags on. “I think securities counsel and their clients are trying to come up with as many creative solutions as they can,” Jay said in an article for TheStreet.  Further, he added, “It’s getting to 10-K filing season and proxy season for companies, and that makes it a particularly troublesome time of year for the SEC to be closed. In connection with that, there’s disclosure issues that may arise – investors are looking for disclosures from companies,” Jay stated. “It’s putting companies in a challenging position.”

The shutdown, Jay stated for an article in Compliance Week, “is progressively becoming more concerning to companies, especially those that are involved in capital market activity or that are in the shareholder proposal process for their upcoming proxy season and deciding whether or not to admit a shareholder proposal. Normally, the SEC staff will weigh in [and, if it sees fit, issue no-action relief for blocking non-qualifying shareholder proposals]. Now, there’s not staff available to process even normal, routine requests.”

The full articles can be accessed online at the links below: