| WASHINGTON, July 24
WASHINGTON, July 24 A U.S. lawmaker will
pressure the U.S. Securities and Exchange Commission on Thursday
to consider a raft of reforms, after William Ackman's aggressive
efforts to take over Allergan Inc raised concerns about
loose rules governing disclosure and shareholder voting.
Republican Representative Edward Royce of California plans
to grill SEC Corporation Finance Director Keith Higgins at a
House Financial Services hearing.
Among his top concerns is a rule that lets investors such as
Ackman delay publicly reporting when they have amassed a large
stake in a company for days.
"I am especially interested in the SEC's process when looking
at novel or creative deals like the announced joint-bid by
Valeant Pharmaceuticals and Pershing Square for Allergan," Royce
said in a statement.
"Mr. Higgins' appearance before the committee is an
opportunity to make sure that the Commission is making robust
reviews of these sorts of deals to ensure strong investor
protections and market transparency."
Saat Alety, Royce's spokesman, said that Royce is prepared
to take legislative action if the SEC fails to fix the problem
on its own.
In recent months, Royce has been writing letters to the SEC
to express concerns about some unusual maneuvers that Ackman's
company Pershing Square Capital Management has used in its joint
effort with Valeant Pharmaceuticals International Inc
to win a $53 billion hostile takeover of Allergan, which is
headquartered near Royce's California district.
In one May letter, Royce said he was concerned about early
efforts by Ackman to call a non-binding shareholder vote outside
of Allergan's typical election procedures as a way to pressure
Allergan to negotiate a deal.
Royce said he feared this "shadow" election would make it
tough for shareholders to "truly understand what is going on."
Pershing Square dropped plans for a shareholder referendum
in May and has since pursued a more traditional proxy battle.
In a July 2 letter to Royce, SEC Chair Mary Jo White said
that the Corporation Finance division will "continue to consider
issues raised by the filing related to the abandoned shareholder
referendum" and "issues raised by any future filings of a
Ackman's tactics have raised a number of regulatory
questions, both about his actions and about hostile takeover
It has renewed calls to fix a SEC rule that affords large
investors a 10-day delay before they must report when they have
amassed more than a 5 percent stake in a company.
The 2010 Dodd-Frank law authorized the SEC to shorten the
reporting period, but so far the SEC has not taken up the
Higgins' division is in charge of reviewing financial
statements of public companies and corporate governance matters.
In that role, his division would oversee a rule-writing on
the reporting period and also review proxy filings and related
Royce's questions on Thursday will touch on just one of what
is expected to be a wide-ranging list of topics at the hearing.
Lawmakers also plan to ask Higgins about other matters, from
rulemakings required by the Dodd Frank and JOBS Act laws, to how
the SEC oversees proxy advisory firms.
(Reporting by Sarah N. Lynch; Editing by Lisa Shumaker)