Pledged securities – shares of a public company pledged by their owner as collateral – present a potentially serious risk to a company’s governance and share price if those shares are ever called as collateral. These risks include forfeitures of … Continue reading
Category Archives: Pledged Securities
AQRM Red Flags: Insiders
The Audit Analytics Accounting Quality + Risk Matrix (AQRM) makes it easy to identify accounting, audit, and governance red flags for public companies. This blog series breaks down the risks associated with specific firm-level events included in the AQRM. Red … Continue reading
Pledged Securities in SPACs Pose Double Risk
Pledging securities, when a beneficial owner pledges their company shares as collateral, poses significant risks to corporate governance and share price. This risk is heightened when securities related to a special purpose acquisition company (SPAC) investment are pledged, due to … Continue reading
Risk of Pledged Securities for Public Companies
Pledged securities – shares of a public company that are pledged by their owner as collateral – present a potentially serious risk to a company’s governance and share price. When a major owner of a company pledges their shares, it exposes the company … Continue reading
The Problem With Pledging, Part II
We recently wrote about the perils of directors and officers pledging shares in their own company. We highlighted some examples and discussed possible ramifications. In this post, we will take a deeper dive into some of the data we’ve compiled with respect … Continue reading
The Problem with Pledging
Last fall, at its annual meeting, FedEx (NYSE: FDX) shareholders and the Board of Directors debated the issue of pledging. FedEx policy prohibits share pledging, but allows the company’s general counsel to grant exceptions on a case-by-case basis. A sole but … Continue reading