🇺🇸 Doomscroll News

Tag: Governance

  • Just for Fun: Urgent Recommendation to the Securities & Exchange Commission (SEC): Enhanced Specificity for Use of Proceeds Disclosures

    MEMORANDUM

    FOR: The Honorable Chair, U.S. Securities and Exchange Commission

    Director, Division of Corporation Finance

    Director, Division of Enforcement

    FROM: David Gross

    DATE: April 4, 2025

    SUBJECT: Urgent Recommendation: Enhanced Specificity for Use of Proceeds Disclosures

    1. Purpose: This memorandum recommends immediate action (rulemaking or interpretive guidance) to prohibit public companies from using vague terms like “other general corporate purposes” as the primary descriptor for the intended use of capital raised via registered direct offerings, private placements, or shelf registrations.

    2. Problem Statement & Background: Current Regulation S-K allows non-specific “general corporate purposes” disclosures. This flexibility is being exploited, contributing to significant retail investor harm. We’ve observed a troubling pattern, particularly acute during the Biden administration, where companies, especially in FDA-regulated sectors like biotech (e.g., Lucira Health, Cue Health) and other industries (e.g., Applied UV, Virgin Orbit, Rockley Photonics, Pacific Coast Oil Trust), raise substantial funds citing vague purposes shortly before collapsing into bankruptcy. This frequently results in devastating losses for individual investors (often $50,000+), while employees lose jobs.

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  • The MADC ‘Defense Pact’: A Playbook for Evading Accountability

    Universities, nudged by faculty groups and unions primarily within the Big Ten, are floating a plan for a “Mutual Academic Defense Compact” (MADC). The idea is to create an alliance where member schools pool resources to defend each other against what they term “political attacks.” While presented as a shield for academic freedom and institutional autonomy, the MADC looks more like a coordinated strategy to sidestep accountability to elected governments, taxpayers, and the public, particularly regarding controversial programs and policies.

    Breaking Down the Goals: A Pattern of Evasion

    Examining the stated aims reveals a consistent thread of trying to avoid oversight and consequences:

    1. “Collective Defense”: This isn’t about protection in the usual sense. It’s about creating a shared war chest—funded by tuition, endowments, or potentially taxpayer money—to fight back against governmental investigations, audits, or legislative actions. It’s a mechanism designed explicitly to resist accountability measures imposed by elected bodies.
    2. “Resisting Political Interference”: This frequently serves as code for resisting laws, regulations, and oversight that university administrations or faculty dislike. It suggests an attempt to operate outside the normal democratic process where institutions are subject to political (i.e., governmental) direction, especially public universities. Shielding specific research agendas or programs, like contested DEI initiatives, from scrutiny under the guise of fighting “interference” is a direct dodge of public and governmental accountability.
    3. “Protect Academic Freedom”: While crucial, this principle can be misused. In the context of the MADC, there’s a risk it becomes a justification for insulating specific, often left-leaning, ideological viewpoints or controversial scholarship from legitimate criticism and external review, thereby evading intellectual and public accountability.
    4. “Support Vulnerable Communities / Uphold DEI”: The push to use pact resources to defend DEI programs is particularly telling. These programs face significant legal challenges and public criticism as discriminatory, promoting division, and chilling speech. The MADC aims to provide a financial and legal shield to prevent these programs from facing accountability through courts or legislatures, essentially using collective power to protect contested initiatives from consequences.
    5. “Mitigate Financial Pressure”: This goal is perhaps the most blatant attempt to avoid accountability. If a university faces funding cuts due to legislative decisions, declining enrollment, or public disapproval of its policies, the MADC seeks to use funds from other (potentially out-of-state) universities to cushion the blow. This undermines the basic principle that institutions should be accountable for the consequences of their actions and policies, including financial ones.
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