In November 2021, the Court of Appeals weighed in for the second time on the dispute between Bear Stearns and its insurers over coverage for $140 million in disgorgement paid in connection with an SEC settlement. The Court of Appeals again reversed in favor of Bear Stearns, rejecting the First Department’s view that disgorgement by definition constitutes an uninsurable penalty. In this article, of counsel Howard B. Epstein and special counsel Theodore A. Keyes discuss the importance of this ruling, as it provides that disgorgement may be covered in certain circumstances and what those circumstances are will likely be the subject of additional insurer-insured disputes and litigation.

On Nov. 17, 2021, the Securities and Exchange Commission (“SEC”) adopted final rules requiring participants in contested director elections to use universal proxy cards that include all director nominees presented for election at a shareholder meeting (“Rules”). The Rules allow for shareholders voting by proxy to vote for a combination of director nominees from competing slates, just as they could at an in-person meeting. Notably, consistent with the 2016 Proposing Release, the Rules as adopted do not apply to solicitations for contested elections involving registered investment companies registered under Section 8 of the Investment Company Act of 1940 (“1940 Act”) or business development companies as defined by Section 2(a)(48) of the 1940 Act. In this article, associate Shaina Maldonado discuss the SEC’s decision and the implications for regulated funds.