Decentralized Finance, Crypto Funds, and Value Creation in Tokenized Firms

By Paul P. Momtaz, Niclas Dombrowski, Wolfgang Drobetz and Douglas J. Cumming May 31, 2022 by renholding

Decentralized Finance (DeFi) employs blockchain technology and smart contracts with the goal of enabling perfectly disintermediated financial markets. Despite the far-reaching ambition, DeFi markets are experiencing increasing intermediation recently, as a new type of intermediary, so-called Crypto Funds (henceforth, CFs), …

ISS Discusses Growing Disapproval of CEO Pay Proposals

By Brian Johnson May 31, 2022 by renholding

For many companies, 2021 signaled a return to normal business after the COVID-19 pandemic upended the economy and significantly disrupted financial forecasts established at the beginning of 2020. Given the difficulty in meeting financial targets set under short- and long-term

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A Lawyer’s Guide to Empirical Corporate Governance

By Ofer Eldar May 27, 2022 by renholding

Debates about corporate governance ultimately rest on empirical studies that evaluate whether a particular type of governance enhances shareholder value. In recent years, lawyers have increasingly engaged with these studies, by either criticizing or praising them, and given them greater …

SEC Chair Gensler on ESG Disclosures Proposal

By Gary Gensler May 27, 2022 by renholding

Today [May 25], the Commission is considering a proposal to improve disclosures by certain investment advisers and funds that purport to take Environmental, Social, and Governance (ESG) factors into consideration when making investing decisions. I am pleased to support this

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SEC Commissioner Peirce on ESG Disclosures Proposal

By Hester M. Peirce May 27, 2022 by renholding

Thank you, Mr. Chair. A key impetus for today’s [May 25’s] rulemaking[1] is a legitimate concern about the practice of greenwashing by investment advisers and investment companies. This concern is real because advisers can mint money by calling their

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Meme Investors and Retail Risk

By Sue S. Guan May 26, 2022 by renholding

Dramatic trading in GameStop, AMC, and other “meme stocks” has reignited debates about the efficiency of the stock market, its purposes, and whose interests it should serve. The changing role of retail investors and meme investors, a subset of retail …

Katten Discusses Shareholder Litigation Risk in an Unstable Geopolitical Environment

By Richard Zelichov and Trevor T. Garmey May 26, 2022 by renholding

Over the past two years, U.S. public companies faced an unpredictable risk environment. Two geopolitical crises – the Covid-19 pandemic, and the Russian invasion of Ukraine – strained international supply chains and destabilized financial markets.

It is tempting to view …

Predicting the Unpredictable: What Will Musk Do Next?

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

What did business journalists do before the arrival of Elon Musk? In those by-gone days, their page in the newspaper was gray, dull, and strewn with statistics. Now, it is filled with a continuing soap opera, as exciting as the …

Sullivan & Cromwell Discusses Recent Rulings’ Effects on SEC Use of Administrative Forum

By Sullivan & Cromwell May 25, 2022 by renholding

Two cases—one recently accepted for review by the Supreme Court, and another recently decided by the Court of Appeals for the Fifth Circuit—could change the manner in which the SEC brings enforcement actions against those accused of violating federal securities …

How Mandatory Corporate CSR Disclosures Affect Investors

By Kirsten Fanning, Richard C. Hatfield and Chez Sealy May 24, 2022 by renholding

Investment in companies that engage in sustainable corporate practices is growing rapidly, with those companies receiving approximately $17 trillion from investors so far in the United States alone. As a result, the majority of public companies now voluntarily disclose environmental, …

Skadden Discusses Aggressive Antitrust Enforcement and Novel Theories

By Karen Hoffman Lent and Kenneth Schwartz May 24, 2022 by renholding

From April 5 through April 8, 2022, the Antitrust Section of the American Bar Association held its annual Spring Meeting in Washington, D.C. A prominent theme throughout the week was the role of the antitrust laws in the lives of …

Poison Pills in a World of Activism and ESG

By Caley Petrucci and Guhan Subramanian May 23, 2022 by renholding

Since the creation of the poison pill in the 1980s as a response to hostile takeovers, the corporate world has seen the rise of stakeholder governance, ESG, and stockholder activism and a host of other dramatic developments. The stock market …

Sullivan & Cromwell Discusses Changes to UK Takeover Code

By Ben Perry, Jeremy Kutner and Matthew Triggs May 23, 2022 by renholding

On May 5, 2022, the U.K.’s Panel on Takeovers and Mergers (the “Panel”) published the results of a consultation that started in December 2021 to review the City Code on Takeovers and Mergers (the “Code”), together …

Machine Learning and the Future of Tax Valuation

By Jay A. Soled and Kathleen DeLaney Thomas May 20, 2022 by renholding

The tax law handles many computational issues with extraordinary efficiency. Need to compute employment taxes? The Internal Revenue Code (“Code”) lays out the rate for doing so. Need to ascertain the dollar amount deductible for business mileage expenses? Treasury regulations …

Skadden Discusses Court Decision Striking Down Women on Boards Law

By Virginia Milstead May 20, 2022 by renholding

On May 13, 2022, a judge of the Los Angeles County Superior Court ruled in Crest v. Padilla, Case No. 19STCV27561, that California’s statute requiring California-based public companies to have one to three women on their boards of directors (S.B. …

Voting for Socially Responsible Corporate Policies

By Matthew C. Ringgenberg May 19, 2022 by renholding

Voting is important in the modern public corporation. Shareholders often vote on corporate referendums, they vote to elect directors, and the directors vote on major corporate policies. Yet, despite the significance of voting, there has been little research exploring whether …

SEC Chair Gensler Testifies Before U.S. House Financial Services Subcommittee

By Gary Gensler May 19, 2022 by renholding

Good morning, Chairman Quigley, Ranking Member Womack, and members of the Subcommittee. I’m honored to appear before you for the second time as Chair of the Securities and Exchange Commission. It is good to be here alongside Federal Trade Commission

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Does the Threat of Securities Class Actions Add Value for Shareholders? Evidence from China

By Warren Bailey, Hui Ma, Rongli Yuan and Hong Zou May 18, 2022 by renholding

Securities class actions (SCA) are an important governance mechanism in the U.S. securities market, but there is a significant debate about their costs and benefits to investors. SCA are intended to serve two key functions in investor protection: disciplining and …

Wachtell Lipton Discusses Addressing Market Volatility and Risk in M&A Agreements

By Edward D. Herlihy and Jacob A. King May 18, 2022 by renholding

Significant volatility continues to disrupt the equity markets, with the major stock indexes swinging multiple percentage points often on a daily basis. Inflation, rising interest rates, the Ukraine crisis, continuing effects of Covid-19, lasting supply chain issues, a difficult regulatory …

The Causes and Consequences of Repurchasing Shares

By Alice A. Bonaime and Kathleen M. Kahle May 17, 2022 by renholding

Corporate payouts have reached record levels. Over the past half-century, publicly-held U.S. firms have more than tripled inflation-adjusted dividends, while real share repurchase values have ballooned from $5 billion in 1971 to almost $1 trillion in 2018 and become the …

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The CLS Blue Sky Blog

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

May 2022