Re-Imagining the Business Trust as a Sustainable Business Form

By Lee-ford Tritt and Ryan Scott Teschner February 28, 2020 by renholding

An important debate has emerged in the United States about how business should encapsulate more fully the sustainability-conscious management paradigm. At issue is the proper role of business in society, and the trend is to consider more than just shareholder …

Why Cryptocurrencies Should Be Evaluated As Fiat Money

By J.S. Nelson February 27, 2020 by renholding

What are cryptocurrencies: securities, commodities, or another form of established currency – a non-sovereign fiat currency? In my forthcoming article, “Cryptocommunity Currencies,” I argue that, like other self-governing bodies, communities that issue cryptocurrencies should be judged on how …

SEC Commissioner Dissents from Order Blocking Proposed Bitcoin-Related Rule

By Hester M. Peirce February 27, 2020 by renholding

Today the Commission once again disapproved a proposed rule change that would give American investors access to bitcoin through a product listed and traded on a national securities exchange subject to the Commission’s regulatory framework.[1] This order is the

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The Blaszczak Bombshell: A Return to the “Parity of Information” Theory of Insider Trading?

By John C. Coffee, Jr. February 26, 2020 by renholding

The law of insider trading generally moves with the speed of molasses in February. For every two steps forward, there is one (or more) steps backward. But this winter has seen a rapid succession of developments. First, the Himes Bill …

Gibson Dunn Updates 2019 Year-End Securities Litigation

By Robert F. Serio, Brian M. Lutz, Monica K. Loseman, Jefferson E. Bell and Mark H. Mixon, Jr. February 26, 2020 by renholding

The number of securities cases filed in federal court continued at a furious pace for the third year in a row. This year-end update highlights what you most need to know in securities litigation trends and developments for the last …

Why Financial Regulation Keeps Falling Short

By Dan Awrey and Kathryn Judge February 25, 2020 by renholding

Modern finance is fast moving, extremely complex, and contributes to pervasive unknowns. Yet the processes governing how finance is regulated are typically slow, highly deliberative, and often reflect deeply ingrained and incredibly optimistic assumptions about our ability to understand the …

How Congress Got It Right on Audit Oversight

By James R. Doty February 24, 2020 by renholding

President Donald Trump’s proposed $4.8 trillion budget calls for folding the Public Company Accounting Oversight Board (PCAOB), America’s audit watchdog, into the Securities and Exchange Commission, the nation’s primary financial regulator. The stated goal is to eliminate duplicative regulations and …

Cleary Gottlieb Discusses Upcoming LIBOR Transition

By Jim Ho, Ferdisha Snagg and Jonathan Griggs February 24, 2020 by Avesh Krishna

On 16 January 2020, the Bank of England (the “BoE”), the UK Financial Conduct Authority (the “FCA”) and the Working Group on Sterling Risk-Free Reference Rates (“RFRWG”) published a set of documents outlining priorities and milestones for 2020 on LIBOR …

Key Governance Lessons from the New Association of Corporate Counsel Survey

By Michael W. Peregrine February 21, 2020 by renholding

The newly released Chief Legal Officers survey (“Survey”) from the Association of Corporate Counsel (“ACC”)[1] is an important governance development to the extent that it supports a board’s ability to exercise oversight of its company’s legal department. Overall, the …

Wachtell Lipton Discusses the Coming Impact of ESG on M&A

By Andrew R. Brownstein, Steven A. Rosenblum, David M. Silk, Mark F. Veblen, Sabastian V. Niles and Carmen X. W. Lu February 21, 2020 by renholding

Recent months have seen institutional investors and other stakeholders, notably BlackRock and State Street, stressing the importance of comparable and decision-useful ESG disclosures by their portfolio companies. Such calls follow in the wake of growing interest among investors and …

How Common Ownership Can Lead to Tax Avoidance

By Danielle Chaim February 20, 2020 by renholding

In recent years there has been a surge in research that explores the sources of variation in corporate tax avoidance. Following this stream of research, tax scholars have begun to acknowledge the potential effect of ownership patterns on firms’ tax …

Financial Regulators Warn Over Chinese Audit Quality Amid Coronavirus Outbreak

By Jay Clayton, Bill Hinman, Sagar Teotia and William D. Duhnke III February 20, 2020 by renholding

In November 2019, we met with senior representatives of the four largest U.S. audit firms, including certain of their network representatives, to discuss audit quality across their global networks and certain of the challenges faced in auditing public companies with

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Why the SEC Proposal to Regulate Proxy Advisors Is Flawed

By Ken Bertsch February 19, 2020 by renholding

[Editor’s Note: This and the piece that immediately follows offer a point/counterpoint on the SEC’s proxy advisor proposal.] The Council of Institutional Investors opposes the SEC’s proposal to create a new regulatory structure for proxy advisory firms.[1]…

Why the SEC’s Proposed Rules on Proxy Advisors Are Necessary

By Bernard S. Sharfman February 19, 2020 by renholding

The Securities and Exchange Commission’s (SEC’s) recently proposed Amendments to Exemptions from the Proxy Rules for Proxy Voting Advice are an efficient and necessary response to the “collective action” problem that is imbedded in the shareholder voting of public companies …

Petition for Rulemaking on Short and Distort

By John C. Coffee, Jr. and Joshua Mitts February 18, 2020 by renholding

Short selling serves a critical function in the capital markets by encouraging price discovery and preventing the formation of asset bubbles. But recent years have seen a rise in “negative activism,” a novel phenomenon that has flourished in the era …

Skadden Discusses Merger Reviews and Antitrust Investigations Under Brexit Agreement

By Bill Batchelor, Frederic Depoortere, Giorgio Motta, Ingrid Vandenborre, Alexander Kamp and Nick Wolfe February 18, 2020 by renholding

The U.K. Competition and Markets Authority (CMA) has published “Guidance on the Functions of the CMA Under the Withdrawal Agreement” (Guidance), which sets out the regulator’s approach to merger and competition cases during the Brexit transition period that …

Managerial Optimism and Debt Covenants

By Jakob Infuehr and Volker Laux February 17, 2020 by renholding

The allocation of control rights between entrepreneurs and capital providers plays a central role in financial contracting and corporate governance. Debt contracts typically include accounting-based covenants that transfer control rights to lenders when accounting numbers (such as earnings) fall below …

Are CEOs Encouraged to Take Too Much Risk?

By Justin Chircop, Monika Tarsalewska and Agnieszka Trzeciakiewicz February 14, 2020 by renholding

CEO compensation typically consists of cash and long-term equity. While the benefits of cash are to some extent fixed, the value of equity-based compensation depends on the market value of the firm. The latter is the key mechanism for motivating …

The Results Are in: Global Investor-Director Survey on Climate Risk Management

By The Millstein Center and LeaderXXchange February 14, 2020 by renholding

Institutional investors are increasingly focused on “extra-financial performance” as a predictor of long-term success of companies. Topics like climate change, CO2 emissions reduction, respect for the environment, labour rights, and diversity are more and more factored into investment decisions.

Investors, …

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The CLS Blue Sky Blog

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

February 2020