Sky Blog
The Treasury Department and the Internal Revenue Service have announced (in Notice 2015-59) that they are studying issues related to the qualification of certain corporate distributions as tax-free under Section 355 of the Internal Revenue Code in situations involving …
The question of whether corporate law affects firm value has been a long-standing debate. Some believe corporate laws are trivial and have no effect on firm value, but the dominant view argues that corporate laws do affect firm value. Scholars …
This week, the Federal Trade Commission announced a settlement of charges that Third Point, a well-known activist investor, improperly relied on the “investment-only” exemption to the reporting obligations under the Hart-Scott-Rodino Act. This enforcement action is a harsh reminder of …
In a networked and digital age, we need to rethink the structure of the modern corporation. In order to survive and grow, corporations must operate with a new set of assumptions and principles in order to remain relevant, competitive, and …
The CFTC recently approved a futures contract on a dividend index as a non-security based index futures contract over the SEC’s objection that the dividend index contract could be a security future; the CFTC’s actions may have implications for market …
Recent provocative evidence suggests that a board’s decision to remove a CEO from office is influenced by components of firm performance that have little to do with the CEO’s efforts or abilities. In particular, several authors have suggested that boards …
Since the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”) expanded the authority of the Securities and Exchange Commission (“SEC”) to seek civil penalties through administrative proceedings,1 the SEC has brought, as one court observed, “an …
Companies tell us they buy back stock because it is undervalued. The data, however, tells a different story.
Buybacks peaked in 2007 at $589 billion—the best time to sell. And then fell to $138 billion in 2009—the best time to …
The US Department of Justice (DOJ) is creating a new compliance counsel position in the Criminal Division to assess the effectiveness of an entity’s compliance program and help prosecutors decide whether or how to charge an entity under investigation. Public …
Crown jewel lock-up options, a deal protection device common during the 1980s mergers and acquisitions boom, are back. My forthcoming paper, Fleecing the Family Jewels,[1] is the first scholarly paper to examine the reemergence of crown jewel lock-ups …
As the struggle for corporate control between advocates for long-term, sustainable economic growth and promoters of short-term financial performance rages on, we thought it made sense to highlight the point at which this battle manifests itself most frequently in discussions …
In an administrative enforcement case called Flannery, a bare majority of SEC Commissioners adopted broad positions on primary liability under parts of the two main anti-fraud provisions in the securities laws, Rule 10b-5(a) and (c) and Section 17(a)(1), (2), …
The high-risk business model of large financial conglomerates (frequently called “universal banks”) was an important cause of the financial crisis. Universal banks rely on cheap funding from deposits and shadow banking liabilities to finance their speculative activities in the capital …
A number of public companies have become the target of shareholder books and records inspection demands and litigation related to certain “change of control” provisions in their loan agreements. The type of provisions at issue, known as “proxy put” provisions, …
What unites Atlantic City, the Chicago Public School System, and Puerto Rico’s electric company? They are financially distressed government entities facing various legal and political barriers to using the United States bankruptcy system. Negotiations over those barriers are, in part, …
Not surprisingly, cognitive abilities predict many economic and social outcomes such as salary, job complexity, or success in investment decisions. What is surprising, however, is that almost all auditing research analyzing archival data on audit outcomes has assumed that all …
Does the Dodd-Frank Act lower the earnings of the private fund industry? For much of its history, the private fund industry has viewed private fund adviser registration and the disclosure of proprietary information as a threat to its profitability. Title …
In recent years, taking advantage of expanded jurisdictional provisions in Dodd-Frank, the U.S. Securities and Exchange Commission (SEC) has brought an increasing number of enforcement actions, including complex matters with difficult factual and legal issues, through administrative proceedings, rather than …
State-sponsored cyber hostilities on corporations are not a new occurrence. Recent examples include the August 2014 suspected Russian hack of JP Morgan Chase[1] and the continuous cyber activities against corporate targets conducted by Unit 61398 of the Chinese People’s …