Columbia Law School
Sky Blog
Who Should Pick Board Members?
There is a frenzied rush for shareholders to get a new ‘right”, the right to put up their own nominees for board membership. Boards of directors, so goes a dominant opinion, are not to be fully trusted to pick the …
November 2015
Fried Frank explains BMC Software and the Court’s Ongoing Incremental Path to Increased Reliance on the Merger Price in Appraisal Cases
The Delaware Court of Chancery has been on a slow but clear path toward increased reliance on the merger price in determining fair value in appraisal cases. While the court’s reliance on the merger price as the best indicator of …
Too Big to Tax? Vanguard and the Arm’s Length Standard
Vanguard is the world’s largest complex of mutual funds, with over $3 trillion in assets under management, including $215 billion added in 2014. Vanguard’s main attraction to investors is its low costs. Profs. Freeman and Brown (2000) report that the …
WilmerHale reports ALJ Dismisses FTC’s LabMD Complaint for Lack of Actual or Probable Consumer Harm from Cybersecurity Incidents
On Friday, November 13, Federal Trade Commission (“FTC” or the “Commission”) Chief Administrative Law Judge (“ALJ”) D. Michael Chappell issued an Initial Decision in In the Matter of LabMD, Inc. (FTC Docket No. 9357), dismissing the Commission’s Complaint against LabMD, …
The Influence of Political Bias in State Pension Funds
The propensity to favor local investments is not restricted to individual investors alone but is also common among institutional investors. It also exists in common equity and private equity portfolios of state public pension funds. This phenomenon, known as local …
Jones Day explains The Future of Mandatory Consumer Arbitration Clauses
Arbitration as a means of dispute resolution is intended to help consumers and businesses save time and money and achieve fair results when compared to traditional litigation. Millions of contracts for consumer financial products and services have a pre-dispute arbitration …
On Thin Ice: Climate Change, Exxon, the NYAG and the Martin Act
The New York Attorney General, Eric T. Schneiderman, created a stir this month by opening an investigation of Exxon Mobil Corp. pursuant to the Martin Act (New York’s “Blue Sky” Statute).[1] Various Congressmen, Senators and environmental groups also asked …
Gibson Dunn discusses Depomed Decision Highlighting Importance of Careful Monitoring of M&A Non-Disclosure & Use Obligations
On November 19, 2015, in Depomed, Inc. v. Horizon Pharma plc, the Superior Court of California, County of Santa Clara granted Depomed’s request for a preliminary injunction to enjoin Horizon’s hostile exchange offer to acquire Depomed. The injunction was …
Unions and Shareholder Proposals
Invigorating the shareholder proposal process is a top priority for corporate governance reformers. But the possibility that self-interested shareholders could use proposals to harass or pressure managers to accommodate their interests is a cause for concern. Union shareholders attract more …
Do Managers Seek Control and Entrenchment?
Do managers seek control of the firm, or the level of ownership consistent with entrenchment? Entrenched managers own shares within a range which is high enough to give them control, but sufficiently low to make other shareholders bear the brunt …
Sullivan & Cromwell discusses Proxy Access 2016
As companies prepare for the 2016 proxy season, the number of adopted proxy access bylaws has almost doubled in recent months and at least two new forms of proxy access shareholder proposals have appeared. On the company side, proxy access …
Are Voluntary Internal Controls-Related Audit Report Disclosures Informative in IPOs?
The Sarbanes-Oxley Act of 2002 (SOX) requires management and auditors to opine on the effectiveness of internal controls for many public companies. One intention of SOX is to improve the reliability of information public companies provide to the financial markets …
Latham & Watkins discusses SEC Adopting Final Crowdfunding Rules
On October 30, 2015, the US Securities and Exchange Commission (SEC) adopted final rules to permit companies to offer and sell securities through crowdfunding (the Crowdfunding Rules).1 The Crowdfunding Rules enable investors to purchase securities in crowdfunding offerings, subject to …
Is the Risk of Director Liability Really a “Myth”?
A recent scholarly article questioning the realistic financial liability exposure of corporate directors serves to prompt a larger discussion on the broad range of risks faced by directors, and actions that can be taken to mitigate those risks.
In the …
WilmerHale discusses the SEC’s Continued Review of Equity Market Structure
On October 27, 2015, the Equity Market Structure Advisory Committee (EMSAC or Committee) held its second meeting at the Securities and Exchange Commission (Commission or SEC) in Washington DC.1 The Committee is considering whether various regulatory or industry initiatives …
Legal Expertise and Insider Trading
How does legal knowledge affect corporate insiders’ trading behavior? Do corporate insiders with law degrees trade differently from others? On the one hand, with a better understanding of regulations, legal insiders are more aware of the effects and risk of …
PwC highlights Ten Key Points from the Fed’s TLAC Proposal
The Fed proposed its long-awaited Total Loss-Absorbing Capacity (TLAC) requirements on October 30th. As expected, the Fed’s proposal came out tougher than the Financial Stability Board’s (FSB) TLAC standard proposed last year,[1] including limitations on capital distributions and bonus …
Credible Financial Statements Help Firms Raise Financing and Increase Investment
One of the primary purposes of financial statements is to facilitate the exchange of capital between investors and companies. The extent to which investors rely on the information reported in financial statements depends on the credibility of those financial statements …
HFT Class Action Defeats and the Challenge to Regulators
On August 27, 2015 Judge Jesse Furman of the Southern District of N.Y. dismissed plaintiffs’ claims in the consolidated high frequency trading (“HFT”) class action lawsuit In re Barclays Liquidity Cross and High Frequency Trading Litigation.[1] Coming after …
Morrison & Foerster explains SEC Proposes Rule Changes to Pave the Way for Intrastate and Regional Offerings
At the same time the Securities and Exchange Commission (the “SEC”) adopted rules implementing Regulation Crowdfunding pursuant to Title III of the Jumpstart Our Business Startups Act (the “JOBS Act”), the agency proposed rule changes that could potentially facilitate intrastate …