Spencer Feldman Quoted in Law360 on How NYSE Companies Could Face Heat If Business Focus Changes and Pens Blog on Trend of Strategic Pivots

Olshan Corporate partner Spencer Feldman was quoted in a Law360 article (subscription required) on how the NYSE American is proposing to obtain the authority to delist companies that enact wholesale business changes after going public. If the proposal is approved by the SEC, the NYSE American would consider delistings if a company adopts a business line "substantially different" than its original plan, examining things like changes to the management, board of directors, voting power, ownership and financial structure of a company. Spencer expressed concerns that the NYSE American's proposal may restrict a director's corporate governance responsibilities: "What if a company's board approves a strategic pivot of a company's primary business focus without any fraud or misleading statements in stockholder communications? The NYSE release properly polices red flags with possible qualitative issues when a company's primary business focus changes, but does not seem to address careful conduct and compliance by directors with their fiduciary duties."

For more information on the NYSE American proposal and the trends (and consequences) of public companies pivoting their businesses, read Spencer's recent Securities Law Blog post, "Reminder on Strategic 'Pivoting' to New and Newly-Acquired Businesses," here.