The Problem with Insider Giving

By Andrew Verstein August 31, 2020 by renholding

For a brief moment last month, Kodak Corporation’s stock soared from $2 a share to more than $33 a share on news that it might obtain substantial government financing. At that peak, Kodak director George Karfunkel unloaded shares then worth …

Arnold & Porter Discusses SEC Approval of NYSE Direct Listings Proposal

By Carol Anne Huff August 31, 2020 by renholding

The SEC has given the New York Stock Exchange (NYSE) clearance to allow companies to raise capital in connection with a direct listing on the NYSE. A direct listing is an alternative to a traditional underwritten IPO that allows a …

Does Advertising Improve Access to Capital for Small Businesses?

By Anup Agrawal and Yuree Lim August 28, 2020 by renholding

Private markets have contributed significantly to capital formation in the U.S. economy, particularly for small companies that are often considered the engine for creating new jobs and for accelerating economic growth (see, e.g., Zhao, Harris, and Lam, 2019). The amount …

SEC Commissioner Peirce Speaks on Corporate Governance

By Hester M. Peirce August 28, 2020 by renholding

We are here today to talk about excellence in corporate governance. Before I begin, I have to remind you that the views I represent are my own and not necessarily those of the Securities and Exchange Commission or my fellow

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Delaware Law and the “End of History” in Creditor Protection

By Jared A. Ellias and Robert J. Stark August 27, 2020 by renholding

What should a judge do when creditors claim that they were harmed by management and a board’s carelessness or disloyalty? If the creditors were shareholders, the judge would apply fiduciary duty doctrines to determine liability. Yet it’s unclear what legal …

SEC Chair Clayton Discusses Modernizing Framework for Disclosures

By Jay Clayton August 27, 2020 by renholding

Good morning. This is an open meeting of the U.S. Securities and Exchange Commission, under the Government in the Sunshine Act. I would like start today’s meeting by welcoming Commissioner Crenshaw to her first open meeting.

Today [August 26], we

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SEC Commissioners Crenshaw and Lee Discuss Failure to Modernize Accredited Investor Definition

By Caroline Crenshaw and Allison Herren Lee August 27, 2020 by renholding

The accredited investor definition is the single most important investor protection in the private market.[1] Today’s amendments purport to “update” that definition while leaving in place 38-year old wealth thresholds, declining to index the thresholds to inflation, and declining

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Does Environmental and Social Disclosure Affect Innovation at Companies?

By Brian Gibbons August 26, 2020 by renholding

Companies are typically not compelled to disclose environmental and social (E&S) information because this information does not meet the materiality standard used in many jurisdictions. However, some shareholders have an explicit mandate to screen potential investments based on E&S criteria. …

Skadden Discusses FTC and DOJ Enforcement of M&A Divestiture Orders

By Maria Raptis, David P. Wales and Ryan J. Travers August 26, 2020 by renholding

Recent enforcement actions by the Federal Trade Commission (FTC or Commission) and the Department of Justice (DOJ) demonstrate the agencies’ continued close scrutiny of merging parties’ compliance with divestiture orders. Last month, the FTC required Alimentation Couche-Tard Inc. (ACT), a …

The Social Voice of CEOs

By Swarnodeep Homroy August 25, 2020 by renholding

CEOs have increasingly been speaking out on social issues that are not directly related to their core businesses. Why are they doing so, and what are the consequences for their companies?

In a new paper, I examine the phenomenon of …

Wachtell Lipton Discusses Executive Compensation Considerations – Looking Ahead and Staying Nimble

By Jeannemarie O'Brien and Adam J. Shapiro August 25, 2020 by renholding

Unpredictability has dominated the economic climate over the last six months and likely will continue in the months ahead. Companies that swiftly and thoughtfully assess and respond to evolving challenges will most effectively manage through the pandemic. This theme applies …

How to Address Nonprofit Governance Failures

By Peter Molk and D. Daniel Sokol August 24, 2020 by renholding

Governance failures at for-profit corporations are the topic of frequent media stories, judicial opinions, and academic analyses. Nonprofit governance, however, has received significantly less attention. This lack of attention is not because nonprofits are immune from governance failures, and recent …

SEC Officials Offer Update on the Consolidated Audit Trail

By Jay Clayton, Brett Redfearn and Manisha Kimmel August 24, 2020 by renholding

Today [August 21], the Commission proposed amendments to the national market system (“NMS”) plan governing the consolidated audit trail (“CAT NMS Plan”). The proposed amendments are designed to enhance data security related to the ongoing development and operations of the

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How Managers’ Ability to Gather Information Can Affect the Value of Conservative Accounting

By Christian Laux and Volker Laux August 21, 2020 by renholding

Academics and practitioners, including lawyers, emphasize the importance of conservative accounting to lenders and corporate boards, allowing them to intervene and take corrective actions at an early stage. However, conservative accounting may also increase the risk of false alarms and …

Fed Governor Brainard Offers an Update on Digital Currencies

By Lael Brainard August 21, 2020 by renholding

It is a pleasure to participate in San Francisco’s Innovation Office Hours. The Federal Reserve Bank of San Francisco is a leader of our engagement with the tech community. And the Federal Reserve’s Innovation Office Hours serve as an important …

Puerto Rico; Act III

By Stephen J. Lubben August 20, 2020 by renholding

In 2017, Puerto Rico and certain of its affiliates filed “bankruptcy” petitions under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”). These cases are pending in the U.S. District Court for Puerto Rico; however, under …

Debevoise & Plimpton Discusses Whether EU Antitrust and Data Privacy Rules Are Converging

By Timothy McIver and Anne-Mette Heemsoth August 20, 2020 by renholding

Competition v Privacy. Competition and consumer authorities are increasingly considering the implications of digital platforms’ ownership and use of consumer data and whether concerns about harm to privacy are indicative of a lack of competition.

For a long time the …

Changing the Guard: Improving Corporate Governance with D&O Insurer Rotations

By Andrew Verstein August 19, 2020 by renholding

Insurance companies try to detect and reduce risk. Health insurers encourage preventative care, fire insurers insist on functioning sprinklers, police insurers investigate alleged misconduct and drop departments that tolerate excessive force, and Hollywood insurers flag risky scenes as requiring stunt …

The Impact of the JOBS Act on M&A

By Jitendra Aswani, Sudip Gupta, Iftekhar Hasan and Anthony Saunders August 18, 2020 by renholding

The Jumpstart Our Business Startups (JOBS) Act, enacted in April 2012, was designed to make it cheaper for emerging growth companies (EGCs) to access capital and, by weakening disclosure requirements, easier for them to conduct initial public offerings (IPOs). Its …

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The CLS Blue Sky Blog

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

August 2020