Blockchain Will Not Solve the Proxy Voting Problem

By Park Bramhall July 31, 2019 by renholding

The U.S. proxy voting process is widely viewed as inefficient, opaque, and frequently inaccurate. The conventional wisdom is that voting inaccuracy has arisen largely as a result of decisions made in the 1960s to transition to a system of share …

A Property Theory of Corporate Law

By Robert Anderson IV July 30, 2019 by renholding

In a recent article, I develop a theory of the corporation as a legal entity based upon the foundation of property law, which I call a “property theory of corporate law.” This theory, unlike the contractarian perspective on the corporation, …

Davis Polk Discusses Financial Action Task Force’s Virtual-Asset Guidance

By Jai R. Massari, Jeanine P. McGuinness, Dana E. Seesel and Andrew R. Ruben July 30, 2019 by renholding

The Financial Action Task Force (FATF), the inter-governmental body that sets international standards for anti-money laundering (AML) and countering the financing of terrorism (CFT), released a highly anticipated interpretive note and guidance on June …

The Costs of Complying with SOX’s Internal-Controls Audit Requirement

By Jenny McCallen, Roy Schmardebeck, Jonathan E. Shipman and Robert Lowell Whited July 29, 2019 by renholding

Section 404(b) of the Sarbanes Oxley Act (SOX) requires auditors to test and report on the effectiveness of internal control over financial reporting (ICFR) for accelerated and large accelerated filers. Although Iliev (2010) documents substantial costs to initially comply with …

SEC Chairman Clayton Speaks to Investor Advisory Committee

By Jay Clayton July 29, 2019 by renholding

Thank you, Anne [Sheehan]. Good morning everyone, and I want to extend a special welcome to our new commissioner, Allison Lee.

I am interested in today’s discussion. I understand the Committee first will be talking about the SEC approach to

…

Are Executives Really “Penny Wise and Pound Foolish” About ESG?

By David F. Larcker and Brian Tayan July 26, 2019 by renholding

Critics of the shareholder-primacy model assert that it is flawed because it encourages managers to adopt a myopic view of profit generation that forgoes necessary investment and creates externalities borne by society. These critics argue that greater attention should be …

Do Managers Bias Earnings Forecasts in Response to Current Earnings Surprises?

By Stephen P. Baginski, John L. Campbell, Patrick Ryu and James Warren July 25, 2019 by renholding

Each quarter, managers provide a summary of their firm’s accounting performance – a disclosure known as a quarterly earnings announcement. Earnings announcements attract significant attention from investors and media outlets because, if earnings are different than market expectations, stock price …

Paul Weiss Offers M&A at a Glance for June 2019

By Matthew W. Abbott, Scott A. Barshay, Ariel J. Deckelbaum, Jeffrey D. Marell, Robert B. Schumer and Taurie M. Zeitzer July 25, 2019 by renholding

M&A activity in the U.S. and globally in June was mixed. While the number of deals decreased by 23.7% in the U.S., to 655 deals, and by 13.2% globally, to 2,487 deals, the total value of deals[1] increased significantly, …

#MeToo and the Convergence of CSR and Profit Maximization

By Claire A. Hill July 24, 2019 by renholding

Companies are more concerned with the #MeToo movement than they used to be. Why this is the case is obvious, but much about the topic is not clear. What does this concern lead companies to do? What should this concern …

Gibson Dunn Offers 2019 Mid-Year Securities Enforcement Update

By Mark K. Schonfeld and Amy Mayer July 24, 2019 by renholding

The first half of 2019 has seen a continuation of the Securities and Exchange Commission’s emphasis on protecting the interests of Main Street investors. Chairman Clayton reiterated these themes in his testimony in May before the Financial Services and General …

Four Things No One Will Tell You About ESG Data

By Sakis Kotsantonis and George Serafeim July 23, 2019 by renholding

In a recent article, we seek to shed light on several important aspects of measuring and providing data about companies’ performance on environmental, social, and governance (ESG) issues. The article is intended to provide a useful guide for the …

Cahill Gordon Discusses Justice Department Credit for Antitrust Compliance Programs

By Brock Bosson, Elai Katz, Lauren Rackow, Bradley J. Bondi and Charles A. Gilman July 23, 2019 by renholding

In an effort to incentivize investment in robust antitrust compliance programs, the Antitrust Division of the U.S. Department of Justice (“DOJ”) announced on July 11, 2019 that companies may now receive credit at charging and sentencing for effective antitrust compliance …

SEC Chairman Clayton Kicks Off SEC Roundtable on Short-Termism

By Jay Clayton July 22, 2019 by renholding

Bill [Hinman] thanks a lot. I’m going to highlight three items to try and kick us off here. First, a thank you to Bill, Coy, Shelley and the other staff from the Division of Corporation Finance for the work you

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Do Advisers Mitigate IPO Underpricing and Withdrawals in Europe?

By Emmanuel Pezier July 19, 2019 by renholding

Many issuers have doubts about the efficiency of the IPO market, despite post-2008 regulations designed to reduce conflicts of interests and the costs of going public. As a result, fewer companies are choosing to be listed, and many of those …

Can Corporate Income Tax Cuts Stimulate Innovation?

By Julian Atanassov and Xiaoding Liu July 18, 2019 by renholding

There has been a growing debate among politicians and policy makers, both at the state and federal levels, about the impact of taxes on investment, growth, and firm value. The focus has been predominantly on corporate income tax cuts because, …

The Supreme Court Misses an Opportunity in Securities Law Enforcement

By Andrew Vollmer July 18, 2019 by renholding

In Lorenzo v. SEC, the U.S. Supreme Court continued the struggle to define the difference between primary liability and aiding and abetting liability in Rule 10b-5 and other securities fraud claims. The difference matters because private plaintiffs do not have …

Fragmented Securities Regulation: Neglected Insider Trading in Stand-Alone Banks

By Sehwa Kim and Seil Kim July 17, 2019 by renholding

The financial regulatory structure in the U.S. is complex, consisting of multiple agencies with overlapping responsibilities. Regulators have raised concerns that regulatory fragmentation may undermine the stability and efficiency of the U.S. financial system (GAO 2016). In this paper, we …

ISS Offers Overview of Vote Requirements at U.S. Meetings

By Kosmas Papadopoulos July 17, 2019 by renholding

At the general meeting of Tesla Inc. on June 11, 2019, two management proposals seeking to introduce shareholder-friendly changes to the company’s governance structure failed to pass, despite both items receiving support by more than 99.5 percent of votes cast …

Insider Trading As Fraud

By Zachary Gubler July 16, 2019 by renholding

U.S. Insider trading law is strange. Because Congress has never adopted a comprehensive statute on the subject, insider trading law is largely a species of federal common law. That’s not to say that the Supreme Court has nothing to go …

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The CLS Blue Sky Blog

Columbia Law School's Blog on Corporations and the Capital Markets

July 2019