The Delaware Delusion

Delaware dominates the incorporation market, with approximately 60% of publicly traded companies in the United States incorporated there, including 63% of the Fortune 500 companies. Over 90% of companies that incorporate outside of their principal state of operations make Delaware their state of incorporation. The unresolved question is why corporate lawyers and their clients are drawn to Delaware when most companies have little more than a P.O. Box based in the state.

In The Delaware Delusion, we set out to empirically assess whether there is an economic basis for Delaware’s appeal in the market for company incorporations. We set out … Read more

Downgrading Rating Agency Reform

The financial crisis starkly exposed the need for rating agency reform, yet the most important questions of how to enhance rating agency competition, accuracy, and accountability remain largely unanswered.  My article,  Downgrading Rating Agency Reform, assesses the shortcomings in the design and implementation of the Dodd-Frank Act reforms.  It suggests how regulators can promote competition and heighten rating agency accountability by using regulatory incentives to break up the three leading rating agencies that account for 96% of the market.  It argues exposing rating agencies to investor suits for grossly negligent conduct coupled with caps on damages would balance the … Read more