Venture-Capitalist Directors and Managerial Incentives

By Lubomir P. Litov, Xia (Summer) Liu, William L. Megginson and Romora E. Sitorus January 31, 2022 by renholding

Research has shown that venture capital (VC) firms substantially influence the overall economy. According to Gornall and Strebulaev (2021), among all U.S. public companies founded since 1968, VC-backed companies account for 77 percent of total market capitalization, 41 percent of …

Paul Weiss Discusses DOJ Antitrust Division Head’s Approach to Merger Remedies

By Joseph J. Bial, Andrew C. Finch, Charles F. (Rick) Rule, Aidan Synnott and Brette Tannenbaum January 31, 2022 by renholding

In a January 24 speech, Jonathan Kanter, the assistant attorney general in charge of the Antitrust Division of the DOJ, set forth his views on how the DOJ should approach merger remedies and signaled that the DOJ may be more …

Karmel’s Dissent: The SEC’s Use and Occasional Misuse of Reports of Investigation

By James J. Park January 28, 2022 by renholding

A small number of investigations by the Securities and Exchange Commission (SEC) end with the filing of a report rather than a complaint or administrative order. Section 21(a) of the Securities Exchange Act of 1934 authorizes the SEC “to publish …

ISS Reviews ESG Equity Indices in 2021

By Hernando Cortina January 28, 2022 by renholding

With some exceptions, 2021 was a generally strong year for equity markets around the world. Impressively, passive ESG products such as ETFs garnered significant inflows of over $150 billion dollars and saw asset under management growth of over 80% globally.

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Fintech SPACs Have Been Swimming Naked – and the Tide Is Going Out

By Todd H. Baker January 27, 2022 by renholding

Acorns Grow Inc., the financial technology and investing startup, said last week that it was abandoning its $2.2 billion merger with SPAC Pioneer Merger Corp., putting itself on the hook for a $17.5 million termination fee. Coming almost eight months …

SEC Chair Gensler Speaks on Rules Covering Government Securities Alternative Trading Systems

By Gary Gensler January 27, 2022 by renholding

Today [January 26], the Commission is considering amendments to include significant Treasury markets platforms within Regulation ATS. I support these amendments because, if adopted, they would help promote resiliency and greater access in the Treasury market. We’re also considering modernizing

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SEC Commissioner Peirce Dissents on Proposal to Amend Regulation ATS

By Hester M. Peirce January 27, 2022 by renholding

Events in the U.S. Treasury market (as well as the related repo market) over the past several years strongly suggest that the market for government securities suffers from inadequate levels of intermediation, liquidity, and transparency that in times of stress

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Do Companies Lobby Against Mandatory Disclosure to Protect Proprietary Information?

By Ying Zhou January 26, 2022 by renholding

Critics of mandatory public disclosure often argue that it may put disclosing firms at a competitive disadvantage by requiring them to reveal potentially proprietary information to rivals. For instance, when the Financial Accounting Standards Board (FASB) proposed to mandate more …

SEC Chair Gensler Speaks on Cybersecurity and Securities Laws

By Gary Gensler January 26, 2022 by renholding

Thank you. It’s good to be with the Annual Securities Regulation Institute. As is customary, I’d like to note that my remarks are my own, and I’m not speaking on behalf of the Commission or SEC staff.

As some of

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Climate-Risk Disclosures and “Dirty Energy” Transfers: “Progress” Through Evasion

By John C. Coffee, Jr. January 25, 2022 by renholding

At first glance, recent progress towards transparency in corporate climate-risk disclosures seems exceptional. Over 2,000 companies now publish annual reports showing their carbon emissions data (although most self-interestedly omit Scope 3 data). Many (including most recently ExxonMobil) have made a …

Wachtell Lipton Discusses Investor Priorities in 2022

By Andrew R. Brownstein, Steven A. Rosenblum, Sabastian V. Niles and Carmen X.W. Lu January 25, 2022 by renholding

Last year, major investors took unprecedented steps through engagement efforts and proxy voting to demonstrate their commitment to addressing the climate transition and board and workforce diversity and inclusion, with focus given to disclosure and reporting of key ESG metrics …

Peer Pressure in Corporate Earnings Management

By Constantin Charles, Felix von Meyerinck and Markus Schmid January 24, 2022 by renholding

Corporate earnings are an important source of information for many market participants, yet managers have a certain degree of discretion over the earnings that they report. Given this discretion, there is a large literature that tries to understand whether firms …

Latham & Watkins Discusses Stricter SEC Requirements for the Rule 10b5-1 Affirmative Defense

By Joel H. Trotter, Stephen P. Wink, Naim Culhaci and Deric Behar January 24, 2022 by renholding

On December 15, 2021, the Securities and Exchange Commission (SEC) issued a set of proposed amendments (the Proposal) regarding the adoption of trading plans that qualify for the affirmative defense against liability for trading on the basis of material non-public …

Reputation and Sustainability: Opportunities for Growth in Emerging Markets

By Dale Herndon and Richard Baskerville January 21, 2022 by renholding

We are witnessing a shift in global economic activity from advanced markets to emerging ones. According to the World Bank Group (2021) Global Economic Prospects report, emerging markets and developing economies (EMDEs) have experienced higher real gross domestic product (GDP) …

SEC Chair Gensler Speaks on How to Make Securities Regulation Dynamic

By Gary Gensler January 21, 2022 by renholding

Thank you for the kind introduction. As is customary, I’d like to note that my views are my own, and I’m not speaking on behalf of the Commission or SEC staff.

I’d like to share with you all that we

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High-Yield Debt Covenants and Their Real Effects

By Falk Bräuning, Victoria Ivashina and Ali K. Ozdagli January 20, 2022 by renholding

The U.S. leveraged (high-yield) loan market has more than doubled since the Great Financial Crisis (GFC), with nearly $1.2 trillion in outstanding debt in 2019 (Leveraged Commentary and Analysis, LCD). The rise in high-yield corporate debt (bonds included) in the …

Larry Fink’s 2022 Letter to CEOs

By Larry Fink January 20, 2022 by renholding

Dear CEO,

Each year I make it a priority to write to you on behalf of BlackRock’s clients, who are shareholders in your company. The majority of our clients are investing to finance retirement. Their time horizons can span decades.

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Does Common Ownership Really Prompt Managers to Compete Less?

By Merritt B. Fox and Menesh S. Patel January 19, 2022 by renholding

How common ownership affects competition is a source of acute disagreement among scholars and policymakers, with some who believe common ownership depresses competition seeking antitrust law reforms that would significantly constrain how investment funds operate. Neglected in this vigorous debate, …

Cleary Gottlieb on Navigating a World Where Almost Everyone Is an Activist

By James E. Langston, Kyle A. Harris and Claire Schupmann January 19, 2022 by renholding

In many ways, 2021 was a high-water mark for corporate activism. The levels of traditional shareholder activism rebounded from the lows reached during the early days of the COVID-19 pandemic. M&A activism increased substantially as shareholder activists sought to capitalize …

Cleary Gottlieb Discusses the Virtual Board Room in the Post-Pandemic Era

By Jeffrey D. Karpf and Fernando A. Martinez January 18, 2022 by renholding

Almost two years into the COVID-19 pandemic, it is clear that the corporate workplace has changed for good. As the world continues to reopen and companies return to the office, what we are returning to is not business as usual, …

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The CLS Blue Sky Blog

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

January 2022