Sky Blog
In the past few years, investors have begun to embrace the reality that academics have been championing for decades—that a broad-based passive indexing strategy is superior to picking individual stocks or actively managed mutual funds. As a result, millions of …
Cryptocurrency enthusiasts rejoiced when the Securities and Exchange Commission (SEC) approved the listing of bitcoin – and ether-based exchange-traded products (ETPs) – on U.S. stock exchanges earlier this year. There is yet a certain irony in this outcome: Why did …
The Big Three passive fund managers (BlackRock, State Street, and Vanguard) have roughly quadrupled their collective ownership stake in S&P 500 companies over the past two decades (Hirst and Bebchuk, 2019). This enormous increase in ownership by passively …
Shareholder action is restricted to a binary choice, a decision that requires a “yes” or a “no.” For example, shareholders may be asked whether or not to participate in a tender offer, redeem SPAC shares, exercise preemptive rights, or approve …
The Delaware Court of Chancery ruled in In re Appraisal of Panera Bread Company,[1] following a six-day trial, in a 130-page decision issued on January 31, 2020, that the petitioners received more than fair value for each share …
The popularity of index funds, which automatically track an index of stocks, is continuing to grow in the U.S, and, albeit less intensely, in the EU. Due to the high concentration of the index funds industry, the exponential rise of …
One of the hottest antitrust topics of late has been institutional investors’ “common ownership” of minority stakes in competing firms. Writing in the Harvard Law Review, Einer Elhauge proclaimed that “[a]n economic blockbuster has recently been exposed”—namely, “[a] small …
The Securities and Exchange Commission (SEC or Commission) on May 1, 2014 announced a settlement (Settlement) with the New York Stock Exchange LLC and certain of its affiliates (collectively, the NYSE), addressing a variety of practices – including informational disparities …
The amount of assets that passive (index) funds have under management has grown significantly in recent decades. Domestic passive funds and ETFs now manage more than half of all assets under management (AUM) of domestic equity mutual funds and ETFs, …
Our examination of the votes cast by 155 mutual funds on over 6 million corporate election items during 2004-2017 led us to a surprising conclusion: We found that Institutional Shareholder Services’ (ISS) proxy advice did not lead funds to vote …
Despite long-standing efforts to understand the proxy advice market, there is no way to identify the firms that supply specific investors with proxy advice, making claims about market shares conjectural at best. Nevertheless, it is widely believed that ISS and …
This post lays out a new approach to shareholder voting designed to increase the voting power of long-term committed shareholders: adding votes to shares based on both long holding periods and high concentrations. Called quality voting, the approach would …
Institutional ownership of companies has grown to the point that institutions today own approximately 80 percent of the market value of U.S. stocks.[1] Recent academic research explores this rising ownership concentration and debates the growing importance of “passive” or “index” …
The Corporate Practice Commentator is pleased to announce the results of its twenty-fifth annual poll to select the ten best corporate and securities articles. Teachers in corporate and securities law were asked to select the best corporate and securities articles
Proponents of shareholder voting argue that restricting it would reduce the ability of shareholders to hold management accountable. The implication of this argument is that mandating equal voting rights for all shares will benefit shareholders. However, the evidence as to …
In a recent article, we explore the curious case of how regulators in the EU, UK, and United States treat two forms of insider trading — what we call “traditional insider trading” and “shadow trading.” The former, familiar to …
For the month when Paul Atkins was sworn in as SEC Chairman, we examine:
In a new essay, I compare a judicial revolution that is happening with one that is not. Both the change and the status quo are being managed by the current Supreme Court. , When it comes to administrative law, the …
In an era of mounting geopolitical tensions, shifting regulatory landscapes, and intensifying climate risks, the role of institutional investors has never been more important – or more contested. With over $50 trillion in assets under management in the U.S. alone, …