DOJ and FTC leniency for failing to file Hart-Scott-Rodino notifications may be over. The passive investment exception to the Hart-Scott-Rodino Act’s reporting requirements excuses notification when the acquirer will hold not more than 10 percent of the outstanding shares solely for investment purposes. Biglari Holdings, Inc. viewed its investment in Cracker Barrel as passive and did not timely notify the FTC or DOJ. The agencies, however, did not view Biglari’s investment as passive, indicating Biglari’s attempt to attain “a board seat was alone sufficient to show that Biglari was not a passive investor.”  Goodwin Proctor has an analysis of this recent shift in regulatory strategy in a recent client aler.

California has become the third state to regulate employer access to the social media accounts of applicants and employees. The law, A.B. 1844, is set to take effect on January 1, 2013. The law prohibits employers from requesting or requiring employees or applicants to 1) disclose their username or password, 2) access their private information in presence of employer, or 3) divulge any personal social media information. There are some exceptions. In a recent client alert, Wilson Sonsini suggests that the law “contains many undefined and unclear provisions that create potential landmines for California employers.”

On its Words of Wisdom blog, Latham & Watkins has a series on complying with SEC’s XRBL requirement, “part of the family of interactive reporting standards required by the SEC.” The most recent installment covers what types of filings must include an interactive data file and just as important, what to do if you are going to be late.

• Last week, we learned that whistleblowers that use snail mail for disclosing alleged violations to the SEC are still protected. This week, Bingham suggests that three courts have adopted even more relaxed disclosure restrictions, which in some cases, include “internal reports of wrongdoing.” Bingham reviews all three cases here.

• Earlier this year, the SEC directed the national securities exchanges to require listed companies’ compensation committee members to be independent and to implement standards for determining when a compensation committee member is independent.  A few weeks ago, both the NASDAQ and NYSE submitted their proposals. In a recent client alert, Wilson Sonsini has the specifics of these updated requirements, as well as information on when and how the NYSE and NASDAQ will implement them.

• Late last month, the Division of Corporation Finance of the SEC published some additional guidance in Q&A format on who qualifies as an emerging growth company (EGC) under Title I of the JOBS act. Highlights include that while it is acceptable for a non-EGC to spin off a subsidiary that will qualify as an EGC to take advantage of the reduced filing requirements, such efforts will be “questioned” by the SEC.  There is also some guidance on how the SEC will apply the $1 billion annual revenue test.  Katten Muchin Rosen has a summary of the updates here.

Weil has published The 10b-5 Guide: A Survey of 2010-2011 Securities Fraud Litigation. The review crosses topics and circuits with updates on pleading standards, liability issues, and class action mechanisms. The survey also includes a preview of the upcoming Supreme Court term, including Amgen, a case considering whether plaintiffs in a securities fraud class action must prove materiality to invoke the fraud-on-the-market presumption.  

Does an employee qualify as a SOX whistleblower if he sends his tip to the SEC via snail mail instead of one of the statutorily prescribed methods? On a motion to dismiss, Trans-Lux argued that he should not. A federal judge in the District of Connecticut disagreed and allowed the employee’s retaliation claim to proceed. Orrick has the details on their blog.

Last week, President Obama blocked a Chinese company’s purchase of a wind farm in Oregon citing national security concerns. The much-criticized decision was the first by a President in over twenty years. Skadden advises companies “to be aware that transactions that may not appear to be sensitive on their faces — such as the sale of a small wind farm — may indeed raise significant concerns within the CFIUS agencies and at the presidential level.” That, and more advice here.