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SEC Casts Its (Unwelcome) Eye on Valley Economy

April 01, 2016

A recent event put on by Stanford’s Rock Center for Corporate Governance and the SEC’s San Francisco regional office was highlighted by SEC Chair Mary Jo White and enforcement chief Andrew Ceresney in their comments about Silicon Valley unicorns and the pre-IPO secondary market.

​Both White and Ceresney talked about the SEC’s growing interest in the market for pre-IPO securities, mainly to prevent fraud. They mentioned that despite the current IPO slowdown and the decision by unicorn companies to stay out of public markets, companies should still be bolstering their internal controls and structures, especially if they anticipate going public someday.

Michael Dicke, co-chair of Fenwick’s securities enforcement group, shared his perspective with The Recorder.

Dicke told The Recorder that he expects the SEC's interest in transactions involving private companies to grow. Dicke believes the SEC will seize on the existence of the functioning secondary market for private company shares to examine the types of disclosures private companies are making to both their employees and investors.

“That could be a hook to more closely police private companies," commented Dicke.

Prior to joining Fenwick, Dicke served as the Associate Regional Director for Enforcement in the SEC’s San Francisco regional office.

The full article is available through The Recorder website (subscription required).

Dicke also spoke with The Recorder about the SEC’s potential interest in recent law firm cyberattacks. The full article is available through The Recorder website.​