SEC Relaxing Private Tech Disclosure Rules

The Securities and Exchange Commission is starting to relax financial disclosure requirements for private companies, a sign that the SEC’s new leadership may pull back on plans by former chair Mary Jo White to tighten regulations for Silicon Valley.

Last week an SEC advisory committee recommended easing rules that require private companies granting more than $5 million in stock awards to employees to also reveal details of their financial performance to employees, lawyers say. It's a particular issue for private tech companies, which have long considered the rules burdensome, and some have found ways around them. Last year, under Ms. White’s leadership, the SEC began investigating whether major venture-backed companies were violating the financial disclosure rules.

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“I think it’s still important to heed the message that [Mary Jo White] was delivering,” Ms. McCarthy said. “I do think that companies may be getting a bit of a reprieve from that sort of positioning of the SEC, but it’s not really clear at this point if that’s true.”

Stacey Giamalis and Christine McCarthy commented on this article.
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“I think very clearly the tone set by the new SEC chair is very much a realistic, pro-capital formation agenda… I think it’s a different message.”