Trump Secures Electric Power System

Washington, D.C. - May 1, 2020 - (The Ponder News) -- In an effort to better protect the electric grid from attacks from foreign adversaries, President Trump has signed an Executive Order, "Securing the United States Bulk Power System," banning the purchase and installation of some equipment for power plants and the transmission system, according to the U.S. Department of Energy.

In response, Jim Cunningham, executive director of Protect Our Power, issued the following statement:

"This Executive Order is an important first step -- one that Protect Our Power supports -- to address dangerous cyber-related vulnerabilities in the electric sector supply chain. The order highlights a looming threat that Protect Our Power and other security experts have identified for some time now.

"In November 2018, Protect Our Power and security firm Ridge Global issued a report that assessed our nation's increasing dependence on foreign suppliers. More recently, in conjunction with Ridge Global, we released a report in late February that examined cybersecurity risks in the power industry's supply chain and called for a collaborative effort among buyers, sellers and regulators to build an acceptable supply chain protocol to assure the integrity of the industry's supply chain. We continue to work on this project and today's action highlights the importance of that effort.

"And only weeks ago, the Cyberspace Solarium Commission issued a report with recommendations aimed at better securing our nation's critical infrastructure, including the electric grid which is vital to the ability of so many other critical sectors to continue functioning. The commission's report specifically stated the United States 'can limit market access to untrusted or high-risk vendors where the risk of supply chain compromise is unacceptable.'

"The president's Executive Order appropriately empowers the Energy Secretary to act with input from the new Task Force established in the order. This should allow for needed coordination between our intelligence agencies and Homeland Security to implement timely and informed actions. This also highlights the pressing need to establish in-depth protocols to guide the actions of buyers, sellers and regulators to assure the cyber integrity of our nation's electric sector supply chain.

"While we should be sensitive not to dramatically increase costs to consumers, we absolutely must work more urgently and comprehensively to better secure the supply chain and protect Americans from the consequences of a high-impact cyberattack."

Shuttered by COVID-19, Restaurants, Businesses Fighting Back Against Insurance Company Claim Denials

Dallas, TX - April 29, 2020 - (The Ponder News) -- Businesses across a range of sectors are starting to fight back against insurance companies, charging that insurers are operating in bad faith by rejecting claims for damages caused by the COVID-19 pandemic and shelter-in-place orders that have shut down their businesses, according to two new federal bad-faith insurance lawsuits filed by the Fears Nachawati Law Firm.

According to lawsuits filed on behalf of Dallas-based Salum restaurant and Houston-based Frosch International Travel, Travelers Indemnity Company rejected their damages and business-interruption claims without investigating.

In defending its denial to Salum's claim, Travelers wrongly stated that language in the restaurant's policy specifically excludes losses caused by "bacteria and viruses," according to the lawsuit. However, Salum's "Deluxe Coverage" policy contains no such language. Travelers also claims that the restaurant has not suffered because restaurants are allowed to sell food to-go, even though it has never offered takeout service.

Based in Houston, Frosch has offices in 40 cities and employs more than 2,200 people. The company's policy states that it would "pay for [T]he actual loss of Business Income … sustain[ed] due to the necessary 'suspension' of your 'operations.'" The policy also promises to pay for additional coverages, including damages that occur when a business is closed by civil authorities, as happened across the United States during the pandemic. In its denial, Travelers claimed that Frosch had not suffered a "cessation of business" because it was still open and had not sustained property damage.

"This is the definition of bad faith," said Fears Nachawati trial lawyer Matthew McCarley. "Insurance companies like Travelers have systematically taken advantage of loyal policy holders, promising coverage but backing out when businesses need them the most."

Mr. McCarley says these two businesses are not unique. Across the country, businesses affected by the pandemic are finding that business interruption claims are being denied as the insurance industry's powerful lobby pressures lawmakers to change the rules after-the-fact and exempt the industry from pandemic-related liability.

The lawsuits seek declaratory judgments that Travelers must honor the policies and cover the damages claims. They also seek damages for breach of contract, violation of the Texas Insurance Code, and breach of Travelers' duty of good faith and fair dealing. Insurance statutes provide for up to triple the amount of punitive awards for insurance companies found to have operated in bad faith.

The cases are Salum Restaurant LTD v The Travelers Indemnity Company, case No. 3:20-cv-01034 in the U.S. District Court for the Northern District of Texas; and Frosch Holdco et al. v The Travelers Indemnity Company, et al., case No. 4:20-cv-0148 in the U.S. District Court for the Southern District of Texas.

Conservation Groups Challenge EPA's Gutting of Clean Water Protections in Federal Court

Charleston, SC - April 29, 2020 - (The Ponder News) -- Conservation groups challenged in federal court the administration's effort to gut clean water protections from wetlands and streams that feed drinking-water sources for 200 million Americans and 32 million people in the South, or seven out of ten Southerners. The legal challenge, filed in the U.S. District Court for the District of South Carolina, opens a major court battle over the U.S. Environmental Protection Agency's and U.S. Army Corps of Engineers' re-definition of what waters are protected under the Clean Water Act that leaves many waterways unprotected as well as the communities and wildlife that rely on them.

The Southern Environmental Law Center filed today's challenge on behalf of American Rivers, Charleston Waterkeeper, Chattahoochee Riverkeeper, Clean Water Action, Defenders of Wildlife, Environment America, Friends of the Rappahannock, James River Association, National Wildlife Federation, North Carolina Coastal Federation, North Carolina Wildlife Federation, Public Employees for Environmental Responsibility (PEER), Roanoke River Basin Association and South Carolina Coastal Conservation League.

The lawsuit contends that the agencies' wholesale stripping of protections was an unlawful departure from decades of bipartisan practice. Among other things, the agencies failed to explain or evaluate the impact of their actions on the nation's water quality or give Americans a meaningful opportunity to comment on the elimination of scientifically-based protections for streams and wetlands.

The lawsuit contends the rule is contrary to the Clean Water Act's central aim to protect the integrity of America's waterways and ignores basic science – a point underlined by EPA's own Science Advisory Board, which warned that the proposed rule flew in the face of established studies and research.

The challenged rule ignores the intent of the Clean Water Act, which a bipartisan Congress passed in 1972 because state-by-state efforts to clean the nation's waters failed.

The agencies' bid to dramatically reduce water protections was met with overwhelming opposition, with the bulk of more than 600,000 comments submitted from across the country opposed to the stripping away the Clean Water Act's reach.

Comments from the groups who filed in federal court today to protect clean water follow.

"Every family and community across America relies on clean water, but these agencies ignored all that to facilitate unlimited water pollution across the nation," said Blan Holman, senior attorney and leader of the Clean Water Defense Initiative at the Southern Environmental Law Center which is representing the conservation groups in court. "This unlawful rule puts the water used by hundreds of millions of Americans for drinking, bathing, fishing, and business at risk as well as countless communities that deal with floods and hurricanes. You don't have to be a rocket scientist to know that pollution dumped upstream flows downstream, but the agencies shut their eyes to science and common sense. That violation of the law is why we're going to court to protect clean water."

"The Trump administration's Dirty Water Rule would reverse 50 years of progress protecting clean water in our country," said Bob Irvin, president and CEO of American Rivers. "It ignores science and threatens the health and safety of hundreds of millions of people who depend on rivers and streams for clean water. We will continue standing up against this administration's reckless rollbacks to our clean water safeguards because our nation's health, security and future depend on it."

"It's hard to imagine a worse idea," said Andrew Wunderley, Charleston waterkeeper. "Aggressive growth is threatening our freshwater wetlands and there are no state or local protections to fall back on in South Carolina. Removing these protections now means more flooding and more pollution--that's not good for anyone.

"As surely as water flows downstream, the Dirty Water Rule endangers the waterways where millions of Americans swim, fish, boat, and draw our drinking water," said John Rumpler, clean water program director for Environment America. "Revoking Clean Water Act protections for streams and wetlands defies common sense, sound science, and the law."

"The administration's new rule completely undermines the core purpose of the Clean Water Act, which is to restore and maintain the integrity of our nation's waters. It will put the health of communities throughout the country at risk," said Jennifer Peters, national water programs director at Clean Water Action. "Even kids understand we all live downstream and that small streams and wetlands are vital to overall health of our drinking water sources. Instead of acting like drinking water matters, EPA is prioritizing polluter profits with this illegal and unscientific rule and standing its mission to protect human health and the environment on its head."

"The Trump administration's reversal of protections for clean water is reckless and irresponsible. Wetlands, streams and freshwater bays provide important habitat diversity to many imperiled species like the southern bog turtle, Florida manatee, Eastern hellbender, Rio Grande cutthroat trout and more. We are heading to court to fight the administration's rollback that threatens thousands of streams, wetlands, and bays in the U.S. and the wildlife that call them home," said Lindsay Dubin, staff attorney, Defenders of Wildlife.

"Clean drinking water, a fishable and swimmable James River, increased river-based tourism and economic development – all of these we owe to the protections of the federal Clean Water Act. The EPA's rule puts our local waterways at risk and threatens to erode decades of progress to restore the health of the James River," said Jameson Brunkow, riverkeeper and senior advocacy manager with the James River Association. "We are speaking up to defend protections for critical headwater streams and wetlands, which science shows support downstream water quality and healthy waterways."

"This rule effectively guts the Clean Water Act by permanently removing protections for approximately half the nation's streams and wetlands," said Jim Murphy, director of legal advocacy for the National Wildlife Federation. "It should be shocking, but it isn't, that the EPA did not examine the impacts of this rule on water quality or public health. The agency has openly admitted it did not do a substantive analysis of which streams and wetlands would lose protections and which pollution permits would be invalidated as a result. We think the courts will agree that federal rules should be based on sound science and that this one is not."

"The repeal of Clean Water Act protections would put North Carolina's water resources at risk by removing protections from smaller headwater streams and tributaries, and would undermine our state's resiliency during flooding events by eliminating protections on millions of acres of wetlands that safeguard our communities," said Tim Gestwicki, CEO of the North Carolina Wildlife Federation. "As North Carolina continues to rebuild from the past two years of hurricanes and historic flooding, the rollback repeals are especially egregious. We need restored wetlands, streams, and floodplains, not less protections.

"Wildlife need clean water and hunters and anglers know that without it, there won't be ducks to hunt or fish to catch," added Gestwicki. "Folks who love our streams, rivers, and wetlands deserve better, which is why this grievous repeal must be fought in court."

The agencies have 60 days to respond to the lawsuit.

For more than 30 years, the Southern Environmental Law Center has used the power of the law to champion the environment of the Southeast. With over 80 attorneys and nine offices across the region, SELC is widely recognized as the Southeast's foremost environmental organization and regional leader. SELC works on a full range of environmental issues to protect our natural resources and the health and well-being of all the people in our region.

Study Predicts: with Fast Re-Opening of State Economies, America's Recession Will End by Late Summer, Swift Recovery in Fall, Data Does Not Point to Great Depression Era Scenario

Washington, D.C. - April 29, 2020 - (The Ponder News) -- Nationally-renowned economists Dr. Arthur B. Laffer and Stephen Moore, both members of President Donald J. Trump's Economic Recovery Task Force, have released a study predicting a swift economic recovery if states reopen quickly.

"We are advising the White House and many governors across the country, there is a big difference in the swiftness and size of the recovery based on the speed at which states reopen,' says Stephen Moore. "Connecticut, Michigan, New Jersey and New York would be wise to follow the leads of the states in the south and mountain states, or they could see a deep recession through the end of 2020."

Countering many predictions of economic doom, Moore and Laffer find that "with the right national policy prescriptions and most states reopening their economies next week, we will see a very sharp contraction this summer with high unemployment followed by a strong recovery will arrive within three to six months."

The authors compared the sharp economic contraction from the coronavirus with other sharp economic collapses, including the Great Depression, and found that the key market indicators, such as the stock market and the gold price, point to a fast pick-up in growth when the economy gets back on its feet.

"There is just no indication of anything like a Great Depression, says Dr. Laffer, who has advised several presidents and recently was awarded the Presidential Medal of Freedom from President Trump.

The study also predicts a "very uneven" recovery "with some states and regions of the country advancing at a much faster pace than others." Because states are taking the lead in opening up the economy, some regions of the country will do much better than others. States such as New York, Connecticut, and Illinois in the northeast and Midwest are expected to lag because the governors in those states aren't opening right away. "The recovery will be led by states in the south like Florida, Georgia and South Carolina and western states like Arizona and Colorado – all of which are starting to open immediately."

Lawsuit Filed Against Real Estate Company for Firing Employee Who Asked to Work Remotely During 'Shelter-in-Place' Orders

Dallas, TX - April 25, 2020 - (The Ponder News) -- The former general counsel for Frisco, Texas-based real estate investment and development company Tekin & Associates has filed suit against her former employer, claiming wrongful dismissal in response to her request to work from home during the current COVID-19 outbreak.

As a resident of Dallas County subjected to the county's shelter-in-place orders designed to stem the transmission of the coronavirus, Amy Reggio had sought permission to work from home to avoid violating the county orders. Among her concerns was the risk of legal repercussions for driving to the company's Collin County office, which was not included among "essential" businesses under the Dallas County order.

Ms. Reggio's requests were systematically denied by company president Mark Tekin, culminating with Mr. Tekin firing her on March 27 "within minutes" of receiving an email she had sent him outlining her concerns, and reiterating her refusal to violate Dallas County law and her ability to work from her home, according to the lawsuit.

"We are in unprecedented times and the last concern any of us should have is that our employer will flatly refuse to concede that health concerns and complying with the law are viable reasons to work remotely," said Ms. Reggio's attorney Joshua Iacuone of the Dallas-based litigation law firm of Rogge Dunn Group PC.

"Not only did Mr. Tekin repeatedly refuse to consider Amy's requests, he proved to be increasingly belligerent in expressing his anger over the fact that she shared her concerns, refused to violate the law, and asked to work from home," added attorney Rogge Dunn, who also represents Ms. Reggio.

Rogge Dunn Group has built a well-deserved reputation for aggressive litigation, outstanding results and attentive client service. Led by founding partner Rogge Dunn, the firm is well-known for successfully trying high-profile business and employment disputes. This trial experience fosters innovative strategies to obtain effective settlements and minimize litigation risks for corporate and individual clients. Based in Dallas, the firm tries cases in state and federal courts in Texas and throughout the United States.

Papa John's Founder Contributes $1,000,000 to Small Business Survival (See how YOU can help!)

Louisville, KY - April 25, 2020 - (The Ponder News) -- John Schnatter, the founder of Papa John's Pizza, announced that the John H. Schnatter Family Foundation will be contributing $1,000,000 towards the survival of small businesses in America. Contributions from the foundation will be used to help businesses survive the coronavirus stay at home orders that have shuttered millions of companies across America, and as state economies begin to re-open in the coming weeks.

The funds will be contributed from Schnatter's private foundation and distributed as charitable contributions to nonprofit organizations focused on economic recovery for small businesses and workers, as well as through aid that the foundation will provide to some small business owners directly. Schnatter, the iconic founder of Papa John's Pizza who built the 5,400-store business in 1984 from the broom closet in the back of his dad's tavern, has begun offering survival tips to small businesses through commentary in recent media interviews and social media posts.

Also, Schnatter is today launching a new webpage that offers custom merchandise – made in the USA – in exchange for contributions to his charity. The products include personal face masks, bandanas, t-shirts, hats, and mugs. All net proceeds from these sales will be matched by Mr. Schnatter and contributed to charities focused on small business survival and workers.

"I'm pleased to announce that I'm donating $1,000,000 from my private foundation to help small businesses survive right now," said Papa John Schnatter. "Times have never been harder for so many business owners, and I understand what it takes to come back from tough financial times. As economies begin to re-open over the next month, I'm privileged to play a small part in the recovery of small businesses as they struggle to survive and return to normal. As a nation, we're all in this together. Now it's time to get small businesses and workers in America back on their feet so we can be better than ever as one nation," he added.

Gallego & House Dems Urge New PPP Rules Requiring Equitable Lending from Banks

Phoenix, AZ - April 18, 2020 - (The Ponder News) -- Rep. Ruben Gallego (D-AZ) joined Rep. Judy Chu (D-CA), chair of the House Small Business Subcommittee on Investigations; Oversight and Regulations Committee Chairwoman Nydia M. Velázquez, and Democratic Members of the House of Representatives in a letter to U.S. Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza urging new rules for the Paycheck Protection Program (PPP).

Congress established the PPP to help small businesses avoid staff reductions during the coronavirus crisis. However, SBA and Treasury expanded lending participation to all federally insured banks without including rules to prohibit exclusionary and inequitable practices. As large banks limited applications to high-value existing business customers, many small businesses were denied service by the largest lenders, and as a result, small banks and community lenders have been overwhelmed with applicants denied by other banks.

The letter, signed by 38 members, urges the SBA and Treasury to immediately issue new rules requiring PPP lenders to treat all applications equally and forbidding the imposition of any application restrictions not specified by Congress or the Administration.

“It’s clear that underserved small businesses aren’t getting a fair shake, and this needs to be remedied immediately,” said Rep. Gallego. “Congress established the Paycheck Protection Program (PPP) to help keep employees paid – but the SBA and Treasury’s system has left out too many of the small businesses that make up the backbone of our community and nation. Before Congress puts more money into this program, we need to make sure that money will go to the businesses that need it most and that banks aren’t allowed to siphon those funds only to their biggest customers.”

The full letter can be found here.

830 Groups Urge Congress to Halt Broadband, Electricity and Water Shutoffs in Next COVID-19 Relief Bill

Washington, D.C. - April 17, 2020 - (The Ponder News) -- On Monday, 830 utility-justice, environmental, faith, digital-rights and civil-rights groups sent a letter to Congress calling for the next congressional COVID-19 relief package to include a moratorium on broadband, electricity and water shutoffs.

The letter also calls for stimulus funds to address the systemic issues that lead to shutoffs. These issues include racial and economic inequities that can be addressed with improved affordable broadband programs including Lifeline; distributed solar energy; and percentage-of-income water-affordability initiatives.

The coronavirus crisis has triggered unemployment to levels that are unprecedented in U.S. history, and this has disproportionately harmed low-income households and communities of color. These households are facing disconnections and unaffordable rates for utility services that are first lines of defense during this national health emergency.

Congress failed to include any utility-service protections in earlier coronavirus-relief packages despite vast public support for such measures. Today’s letter calls for a nationwide moratorium on all utility disconnections. The letter also advocates for reconnections for lost services and forgiveness of late fees and bill payments for economically distressed people. The letter, led by the Center for Biological Diversity, Food & Water Action, Free Press Action and Partnerships for Southern Equity, calls on Congress to extend these protections for six months after the emergency ends, allowing people to recover economically without the burden of debt.

“Unfortunately, millions of families each year are cut off from their utility services, and the coronavirus emergency exacerbates and highlights the urgency of these chronic issues,” the letter reads. “These utility services must be retained to ensure basic family survival and to fight the health pandemic at ground zero.”

“Right now, an affordable broadband connection can mean the difference between being employed or unemployed, healthy or sick, connected with the outside world or trapped in isolation,” said Dana Floberg, policy manager at Free Press Action. “As the pandemic forces people out of work, millions more people, especially low-income families and communities of color, will find themselves unable to pay for broadband. No one should lose access to lifesaving and necessary communications tools during this crisis. Congress must act swiftly. We must end the shutoffs that leave vulnerable families digitally stranded and fund the emergency broadband-connectivity programs to get and keep impacted communities online.”

“It’s unconscionable that Senate Republicans chose to protect corporate America over families in the last rescue package,” said Jean Su, director of the Center for Biological Diversity’s energy justice program. “Families are facing impossible choices between paying for food or electricity, water or health care. Congress should ensure that all utilities are kept on and should invest in long-term solutions like community solar that aren’t dependent on dirty corporate-utility power that can be cut off in a crisis.”

“Our nation is in crisis and we are once again woefully underprepared to address the systemic injustices exacerbated by this pandemic head on,” said Chandra Farley, just energy director at the Partnership for Southern Equity. “Low-income households, particularly Black and Latino households that already spend a larger portion of their income on home-energy costs, need a national moratorium on utility shutoffs now. As bills continue to rise due to utility-rate hikes and expensive, dirty-energy infrastructure, Congress should invest in the economic engine of energy efficiency and pollution-free, clean energy that we know can lower utility bills and improve the overall health of historically marginalized communities.”

“There is absolutely no excuse left for Congress to exclude basic human needs from the next coronavirus stimulus package, or in general,” said Rianna Eckel, senior national water organizer at Food & Water Action. “People are facing the reality of living through a summer without running water right now. We need national action to protect every single person in this country from inhumane utility shutoffs, nothing less.”

BREAKING: New Right-to-Carry Case Filed; Second Amendment Advocates Seek Injunction Against Georgia Governor Brian Kemp, Public Safety Commissioner Gary Vowell, Cherokee County, and Probate Judge Keith Wood

Atlanta, GA - April 16, 2020 - (The Ponder News) -- In a new right-to-carry lawsuit brought by Firearms Policy Coalition (FPC) and Second Amendment Foundation (SAF), the advocacy organizations joined individual Lisa Walters in seeking an injunction against State of Georgia Governor Brian Kemp, Georgia Department of Public Safety Commissioner Gary Vowell, Cherokee County, and Cherokee County Probate Judge Keith Wood. The case filings can be accessed from FPC’s website, FPCLegal.org.

The State’s ban on carrying loaded handguns in public, and the Cherokee County defendants’ closing down their Georgia Weapons Carry License program, “are unconstitutional and violate the right to bear arms for self-defense and the privileges or immunities of citizenship,” the lawsuit says. George Code § 16-11-126 and the defendants enforcement of it, claim the plaintiffs, “are a prior restraint upon and violate the fundamental, individual right to keep and bear arms of all persons not prohibited from acquiring and possessing firearms under federal and state laws…”

“The State of Georgia’s statutory scheme flips the exercise of rights and the presumption of liberty on their head,” the plaintiffs say in their request for an injunction. “Rather than allowing people to exercise their right [to carry handguns] unless they are prohibited from possessing firearms and punishing specifically dangerous conduct, the State and its law enforcers take the opposite approach: they ban most all law-abiding citizens from carrying handguns in public on pain of criminal liability, and then provide a few narrow, limited exceptions—including the possession of a valid [Georgia carry license], which Plaintiff Walters cannot today acquire because of Defendants Wood and Cherokee County.”

“The natural right to armed self-defense does not cease to exist when a person steps over the threshold of their home and into the outside world,” observed Adam Kraut, FPC’s Director of Legal Strategy. “By their elimination of access to Georgia Weapons Carry Licenses, Judge Keith Wood and Cherokee County have destroyed the right to carry handguns outside the home for Lisa Walters and others like her. This is not acceptable and shows the inherent and terminally unconstitutional defects of the State’s license requirements.”

“This is the most recent in a series of legal actions we’ve had to file around the country,” noted SAF founder and Executive Vice President Alan M. Gottlieb, “because we’ve discovered that some officials have arbitrarily decided the COVID-19 crisis allows them to suspend the Constitutional rights of the citizens they serve. We’ve been stunned by this pattern because such actions are not permitted by the Constitution. Authorities may not, by decree or otherwise, enact or enforce a suspension or deprivation of constitutional liberties.”

“The Constitution explicitly protects the fundamental human right to keep and bear arms, especially for self-defense, inside and outside the home” said FPC President Brandon Combs. “Governments cannot eliminate the right of law-abiding adults to carry handguns for self-defense in public, which is all the more pertinent in these troubled times. As the Supreme Court has already explained, the Constitution's guarantee of the right to bear arms is especially important for self-defense in case of confrontation, and individuals must be allowed to exercise their rights outside their home.”

Individual firearm or ammunition purchasers, retailers, and ranges affected by ‘stay-home’ or shutdown orders are encouraged to report their concerns and potential civil rights violations to FPC’s COVID-19 Issue Hotline at www.FPChotline.org.

Firearms Policy Coalition (www.firearmspolicy.org) is a 501(c)4 grassroots nonprofit organization. FPC’s mission is to protect and defend the Constitution of the United States, especially the fundamental, individual Second Amendment right to keep and bear arms, advance individual liberty, and restore freedom.

Securities and Exchange Commission Working to Provide Relief During COVID-19 Crisis

Washington, D.C. - April 13, 2020 - (The Ponder News) -- The Securities and Exchange Commission announced on Wednesday that it is providing temporary, conditional exemptive relief for business development companies (BDCs) to enable them to make additional investments in small and medium-sized businesses, including those with operations affected by COVID-19. BDCs were created to provide capital to smaller domestic operating companies that otherwise may not be able to readily access the capital markets. Today’s relief will provide additional flexibility for BDCs to issue and sell senior securities in order to provide capital to such companies, and to participate in investments in these companies alongside certain private funds that are affiliated with the BDC. Today’s relief is subject to investor protection conditions, including specific requirements for obtaining an independent evaluation of the issuances’ terms and approval by a majority of a BDC’s independent board members.

“Many small and medium-sized businesses across the country are struggling due to the effect of COVID-19, and today’s temporary, targeted action will enable BDCs to provide their businesses with additional financial support during these times,” said Chairman Jay Clayton. “The method for calculating the level of permitted financing and the other important conditions included in the order are designed to ensure that this temporary relief will both protect and benefit investors in the BDCs.”

This relief is the latest in a series of steps the Commission has taken to assist financial market participants in addressing the impacts of the coronavirus. The Commission’s website provides additional information regarding its response. The Commission and its staff continue to assess impacts relating to the coronavirus on investors and market participants, and will consider additional relief from other regulatory requirements where necessary or appropriate. Firms and financial professionals affected by the coronavirus are encouraged to contact the staff with questions and concerns.

The Securities and Exchange Commission voted to adopt rule amendments to implement certain provisions of the Small Business Credit Availability Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act relating to business development companies and other closed-end funds.

Business development companies—or BDCs—are a type of closed-end fund established by statute that primarily invest in small and developing companies. As directed by Congress, the rules will allow business development companies and other closed-end funds to use the securities offering rules that are already available to operating companies. The amendments are designed to streamline the registration, offering and investor communications processes for BDCs and registered closed-end funds and will provide important benefits to market participants and investors, including advancing capital formation and modernizing and streamlining disclosures. The Commission’s reforms will allow eligible funds to engage in a streamlined registration process that has long been available to operating companies, including modernized communications and prospectus delivery procedures and requirements. As a result, they will be better able to respond to market opportunities.

“The amendments we are adopting will modernize the offering process for eligible funds in a way that, as borne out by our experience with operating companies, will benefit both investors in these funds and the companies in which they invest,” said SEC Chairman Jay Clayton. “This is another example of our staff’s laudable efforts to modernize our rules in a manner that furthers all aspects of our mission. It is my hope, particularly when many of our small and medium sized businesses are facing profound challenges not of their own making, that these and other modernization efforts will provide those businesses more efficient access to financing.”

The reforms include changes that supplement the specific amendments mandated by Congress. These changes are designed to better align the modern immediately-effective or automatically effective offering process long available to other types of funds with the structures of the newly eligible funds. They also include disclosure requirements and new structured data requirements that will make it easier for investors and others to analyze fund data.

Most of the amendments will become effective on Aug. 1, 2020.

Representative Trey Hollingsworth (R-IN) released the following statement after the Securities and Exchange Commission (SEC) voted to adopt amendments to provide relief to small public companies with less than $100 million in annual revenue from Sarbanes-Oxley 404(b) requirements.

“Last Congress we passed a bipartisan bill to ensure smaller companies can invest in cures, not excessive compliance; I’m happy to see the SEC is carrying this forward and enabling American firms to continue leading the world in groundbreaking research,” said Rep. Hollingsworth.

Rep. Hollingsworth and Rep. Ben McAdams (D-UT) introduced the Fostering Innovation Act in 2019 to allow small emerging growth companies to keep capital working to fund business needs, rather than on costly and unnecessary regulatory filings. The bill would extend the Sarbanes-Oxley Section 404(b) exemption for an additional five years for a small subset of emerging growth companies with an annual average revenue less than $50 million and less than $700 million in public float. The House previously passed the Fostering Innovation Act in the 115th Congress in both the CHOICE Act and the JOBS Act.

“This timely action by the SEC comes at a critical time for many growing companies, including those in the bioscience sector, to keep vital capital working in research and development, rather than costly regulatory requirements. America has long been a leader in scientific and medical innovation, and this move by the SEC helps ensure that will continue,” said McAdams.

“These amendments allow small biotech companies in Indiana and across the country to focus their scarce resources on developing life-saving therapies. We are grateful to Rep. Hollingsworth for his leadership on the “Fostering Innovation Act” and to the SEC for adopting these changes, which will positively impact patients,” said Kristin Jones, President of the Indiana Health Industry Forum.

The SEC adopted amendments to the “accelerated filer” and “large accelerated filer” definitions. This action tailors regulatory issues for these start-ups that had no revenues or low annual revenues in the most recent fiscal year. The amendments adopted by the SEC do not change key protections from the Sarbanes-Oxley Act of 2002.