Something new and significant is taking shape. For a variety of reasons—the impact of the JOBS Act, the growing popularity of equity private placements, the appearance of new trading markets for venture capital and other non-reporting companies—a new tier of companies is growing rapidly that is composed of issuers that are not "reporting" companies, but that do have a significant number of shareholders. In terms of the size of their shareholder class, these companies overlap with public companies, but they trade in the dark—and actively. More importantly, as their number grows, it is predictable that existing and new trading venues will begin to compete to attract and capture the trading interest in these stocks. This column will call these firms "semi-public companies" to reflect their intermediate status, midway between truly private firms (such as early stage venture capital startups and family-held firms) and public companies.
One of the highest-profile provisions of the Dodd-Frank Act is Section 922. That provision provides protection and monetary awards for whistleblowers. To qualify, the whistleblower must provide information to the Securities and Exchange Commission that leads to the recovery of …
“Ring-fencing” is often touted as a potential regulatory solution to problems in banking, finance, public utilities, and insurance. However, both the precise meaning of ring-fencing, as well as the nature of the problems that ring-fencing regulation purports to solve, are …
In the paper, “Management Influence on Investors: Evidence from Shareholder Votes on the Frequency of Say on Pay”, which was recently made publicly available on SSRN, my co-author (David Oesch of the University of St. Gallen) and I …
Plaintiffs’ attorneys have continued to bring, or threaten, litigation against U.S. companies following the filing of their annual proxy statements. These complaints generally allege disclosure deficiencies in connection with the approval of equity compensation plans and/or the advisory shareholder “say-on-pay” …
Empirical scholars of corporate law are uncovering a rapidly changing and depressing pattern in M&A litigation. This new research dates from a series of articles in 2012 by Professors John Armour, Bernard Black and Brian Cheffins, which announced that Delaware …
Chancellor Strine’s December 17, 2012 bench ruling in In re Ancestry.com Inc. Shareholder Litigation attracted immediate attention from M&A practitioners and scholars regarding the Chancellor’s comments on so-called “Don’t Ask, Don’t Waive” standstill provisions.[1] That attention, however, overshadowed the …
This week, New York State Comptroller Thomas P. DiNapoli and New York City Public Advocate Bill de Blasio urged the Securities and Exchange Commission to respond to a petition I co-authored with my colleagues John Coffee, Ronald Gilson and …
In the turmoil created by the decision of the Cyprus Government to impose a 6.75% levy on deposits up to 100,000 euros and 9% above, it might be useful to look at the legal aspects of this decision. The issue …
Increasingly, companies are using social media, such as Facebook, Twitter, YouTube and other platforms, to engage with clients, customers, employees, shareholders and other key constituents. Promising a fast and low-cost means of disseminating information, social media also offers the potential …
Virtually all brokerage firms’ customer agreements require arbitration of disputes in the Financial Industry Regulatory Authority (FINRA) forum. FINRA regulates the contents of these predispute arbitration agreements (PDAAs) and prohibits broker-dealers from requiring customers to give up the right to …
On February 28, 2013, Chancellor Leo E. Strine, Jr. of the Delaware Chancery Court issued a rare bench ruling rejecting a disclosure-only, negotiated settlement of an M&A stockholder lawsuit. The decision, in In re Transatlantic Holdings Inc. Shareholders Litigation, …
In our paper, The Evolution of Shareholder Voting Rights: Separation of Ownership and Consumption, which was recently made publicly available on SSRN, we show how the ownership patterns of early business corporations shaped their peculiar governance structure. While the …
The following post comes to us from Trevor Norwitz, a partner at Wachtell, Lipton, Rosen & Katz in New York and a lecturer-in-law at Columbia Law School:
In the upcoming proxy season, shareholders at several major corporations will be asked …
On February 21, United States District Court Judge Jed S. Rakoff, federal prosecutor Reed Brodsky, and defense attorney Gary Naftalis, came together to discuss the Gupta insider trading case with Columbia Law School students in a seminar called Corporations in …
In a 2010 article in the Texas Law Review entitled “Embattled CEOs”, Professors Marcel Kahan and Ed Rock argued that, over the past decade or so, CEOs of US public companies have gradually been losing power to their boards and …
In Kallick v. SandRidge Energy, Inc., the Delaware Court of Chancery, in an opinion by Chancellor Strine, enjoined the incumbent board of SandRidge Energy, which faced a consent solicitation initiated by a large stockholder seeking to de-stagger and replace …
In three relatively low profile decisions issued by the Delaware Court of Chancery in February 2013, the court reached seemingly atypical results given the issued involved and the procedural postures of the respective cases. The first decision was on February …
On March 1, Davis Polk & Wardwell LLP released its March 2013 Dodd-Frank Progress Report, which can be found here. Davis Polk issues these Progress Reports monthly to update the market on the progress of the rulemaking required under …
With the recent increase in activism, some on Wall Street are blaming shareholders for the short-term mentality of corporate boards.
But many of these activists represent a small subset of investors in publicly held companies. As a result, corporate boards …
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