Why We Need Interagency Merger Review in Labor Markets

By Hiba Hafiz December 24, 2019 by renholding

As empirical evidence of labor-market concentration mounts, academics and policymakers advance proposals to challenge or reverse its effects on workers’ wages and labor-market options. Prominent among these is more aggressive review of the labor-market effects of mergers by the Department …

Wachtell Lipton Discusses Purpose, Stakeholders, ESG, and Sustainable Long-Term Investment

By Martin Lipton December 24, 2019 by renholding

This year, each of the major index fund managers, the Business Roundtable, the British Academy, the UK Financial Reporting Council, the World Economic Forum and a number of other organizations (both governmental and nongovernmental) announced that they did not support …

Does Litigation Risk Deter Insider Trading?

By Binay K. Adhikari, Anup Agrawal and Bina Sharma December 23, 2019 by renholding

Does regulation deter insider trading? This has been a controversial question, with mixed empirical findings. One set of studies finds that insider trading regulations have been effective in reducing the frequency and profitability of opportunistic trades (e.g., Agrawal and Jaffe …

Fried Frank Discusses Where Things Stand at Year-End 2019

By Gail Weinstein, Steven Epstein, Philip Richter, Erica Jaffe and Amber Banks (Meek) December 23, 2019 by renholding

Corporate Focus on the “Social Good”

Importantly, the Business Roundtable (an influential group of almost 200 CEOs of America’s most influential companies) issued a “Statement on the Purpose of a Corporation,” which has intensified a developing focus on the social …

Does Missing Performance Goals Prompt More Opportunistic Insider Trading?

By Meng Gao December 20, 2019 by renholding

Tying executive pay to corporate performance has become increasingly important in creating incentives for corporate managers. Theoretical models argue that compensation contracts that reward managers contingent on performance, especially performance relative to peer firms, can increase managerial effort (e.g., Holmstrom, …

ISS Discusses Investor Considerations for Aramco Oil

By Damien Fruchart, Harshpreet Singh, Barbara Hof, Ivan Gjoshevski and Benedikt Koch December 20, 2019 by renholding

When Saudi Arabia’s Crown Prince Mohammad Bin Salman announced plans to sell stakes in state-owned Saudi Arabian Oil Co. (Saudi Aramco) in 2016, he was also setting the stage for the biggest initial public offering (IPO) in history. On December …

Designing Dual Class Sunsets: The Case for a Transfer-Centered Approach

By Marc Moore December 19, 2019 by renholding

Dual class capital structures have spread exponentially in recent years across much of the corporate world, as has previously been reported on this blog. Dual class listed companies today account for around $4 trillion of US total stock market value …

Chairman Clayton Delivers Statement at Open Meeting of SEC

By Jay Clayton December 19, 2019 by renholding

Good morning. This is an open meeting of the U.S. Securities and Exchange Commission, under the Government in the Sunshine Act.

Today, we have six items on the agenda. As I’ve remarked in the past, we must efficiently allocate the

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Conflict of Interest Transactions: Principal Concerns and Interpretive Issues

By Stuart R. Cohn December 18, 2019 by renholding

In 2017, shareholders of Tesla Motors sued Tesla’s CEO, Elon Musk, and its directors, claiming that the company, at Musk’s urging and under his influence, engaged in a conflict of interest transaction when it purchased SolarCity, a corporation owned by …

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

By Matthew W. Abbott, Scott A. Barshay, Ariel J. Deckelbaum, Jeffrey D. Marell, Robert B. Schumer and Taurie M. Zeitzer December 18, 2019 by renholding

M&A activity in the U.S. and worldwide continued to be mixed in November. The number of deals fell by 13.5% in the U.S., to 721, and by 7.7% globally, to 2,710. However, total deal value[1] rose by 48.3% in …

The Effects of Mandatory Disclosure Rules on Hedge Fund Governance

By Colleen Honigsberg December 17, 2019 by renholding

In a new paper, I add to the debate over hedge fund regulation by introducing empirical evidence that hedge fund registration requirements reduce misreporting. Using three alternating changes in hedge fund regulation, my study finds consistent evidence that registration reduces …

Cleary Gottlieb Discusses Second Circuit’s High Bar for Securities Fraud Pleadings

By Carmine D. Boccuzzi, Jr., Roger Cooper and Jared Gerber December 17, 2019 by renholding

On December 10, 2019, the Second Circuit, in Gamm v. Sanderson Farms, held that when a securities fraud complaint alleges that statements were rendered false or misleading through the non-disclosure of illegal activity, the facts of the underlying wrongdoing …

Blockchain in Corporate Governance: Implications for Attorneys

By Adam Sulkowski and Joan MacLeod Heminway December 16, 2019 by renholding

Blockchain-based information storage, retrieval, and tracking have the potential to be more immediate, transparent, and credible means of business recordkeeping than alternatives involving a centralized point of control.[1] As a result it should be unsurprising that corporations have begun …

Davis Polk Discusses NYSE Revised Direct Listing Proposal

By Maurice Blanco, Alan Denenberg, Marcel Fausten, James Lin and Richard Truesdell December 16, 2019 by renholding

Following the SEC’s rejection last week of its proposed rule change on direct listings, the NYSE filed a revised rule change proposal with the SEC yesterday. The new rule change proposal is substantially similar to the proposal the NYSE filed …

The Board’s Marchand/Clovis Reaction Plan

By Michael W. Peregrine December 13, 2019 by renholding

Corporate boards may wish to adopt a plan of action in response to two recent Delaware decisions suggesting a shift in application of the historically director-friendly Caremark[1] standard for board oversight of a company’s compliance systems. Such a plan …

SEC Commissioner Peirce Speaks before National Economists Club

By Hester M. Peirce December 13, 2019 by renholding

Thank you, Cliff [Waldman] for that kind introduction. It is an honor to be among economists today. I am not sure why, but every time I speak to economists, I feel compelled to tell a joke. Maybe it is because

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The Dark Side of Hedge Fund Activism: Evidence from Employee Pension Plans

By Anup Agrawal and Yuree Lim December 12, 2019 by renholding

Shareholder activism is an investment strategy that investors such as hedge funds (HFs) use to increase the value of their investment by intervening in the management of a targeted firm. Activists can nudge management to take shareholder-friendly actions such as …

Wachtell Lipton Offers Thoughts for Boards of Directors in 2020

By Steven A. Rosenblum December 12, 2019 by renholding

In hindsight, 2019 may come to be viewed as a watershed year in the evolution of corporate governance. After years of growing alarm about endemic short-termism, the sustainability and competitiveness of businesses over a long-term horizon, and the role of …

Criminal Penalties on Officers Can Deter Corporate Tax Avoidance

By Mark (Shuai) Ma and Wayne B. Thomas December 11, 2019 by renholding

There is a worldwide debate over how to prevent overly aggressive corporate tax avoidance. In 2015, the Australian government doubled civil penalties on large multinational corporations that engage in the practice. Similarly, recent legislation in the United States, like the …

SEC Chair Delivers Testimony on Oversight to U.S. Senate Banking, Housing, and Urban Affairs Committee

By Jay Clayton December 11, 2019 by renholding

Chairman Crapo, Ranking Member Brown and Senators of the Committee, thank you for the opportunity to testify before you today about the work of the U.S. Securities and Exchange Commission (SEC or Commission or agency).[1] I am honored to

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The CLS Blue Sky Blog

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

December 2019