Addressing Climate Change Requires Creating Utilities With Purpose

By Joel B. Eisen and Heather E. Payne October 31, 2023 by renholding

Environment, social, and governance (ESG) reporting has become a mainstay of corporate and investment decision-making. Corporations are increasingly making ESG disclosures to assess and limit risks, bolster their reputations, and attract and keep customers. In a new paper, we focus …

Debevoise & Plimpton Discusses Fifth Circuit Decision to Uphold Nasdaq Board Diversity Rule

By Matthew E. Kaplan, William D. Regner, Simone S. Hicks, Ashley Yoon and Andrew Hong October 31, 2023 by renholding

On October 18, 2023, the Fifth Circuit, in Alliance for Fair Board Recruitment v. SEC, upheld Nasdaq’s board diversity rule. [1]

The rule, approved by the Securities and Exchange Commission in August 2021, requires Nasdaq-listed companies to disclose board-level …

Do Dual-Class Structures Help Stock Markets Attract Listings?

By Fa Chen October 30, 2023 by renholding

Financial globalization has allowed issuers more freedom to shop among jurisdictions and thus intensified stock market competition. Against this backdrop, the Hong Kong, Singapore, China, and UK stock markets have accepted the dual-class share structure (DCSS). While empirical legal studies …

Debevoise Discusses Proposed FDIC Guidelines for Corporate Governance and Risk Management

By Gregory Lyons, Caroline Novogrod Swett, Courtney Bradford Pike, Tejas Dave and Tara Holzer October 30, 2023 by renholding

On October 11, 2023, the Federal Deposit Insurance Corporation (the “FDIC”) published in the Federal Register for comment a notice of proposed rulemaking to establish new guidelines (the “Proposed Guidelines”) for governance and risk management at FDIC-supervised insured depository institutions …

How History Sheds Light on the Limits of Fraud Prevention

By Emily Kadens October 27, 2023 by renholding

The common law of fraudulent misrepresentation, whether in tort or contract, balances the alleged fraudster’s intentional deception against the victim’s unjustified reliance. The law does not reward the victim who should have known better than to trust the fraudster’s representations. …

Cleary Gottlieb Discusses How U.S. Securities Laws Apply to a Bail-In of UK or European Bank

By Andrew Bernstein, John Brinitzer, Amelie Champsaur, David Gottlieb and Sarah Lewis October 27, 2023 by renholding

On October 10, 2023, the Financial Stability Board (the “FSB”) published a report (the “FSB Report”)[1] that examined the international resolution framework as applicable to global systemically important banks (“G-SIBs”). In its examination, the FSB Report stated that the …

Why the SEC’s SPAC Solution Makes Sense

By Karen E. Woody and Lidia Kurganova October 26, 2023 by renholding

On March 30, 2022, the SEC proposed much-anticipated regulations governing Special Purpose Acquisition Companies (“SPACs”), which provide an alternative route for a company to be traded on a national exchange without undertaking the cumbersome process of an initial public offering …

Davis Polk Discusses the Federal Reserve OIG Report on Silicon Valley Bank Failure

By Randall D. Guynn, Margaret E. Tahyar, David L. Portilla, Kirill Lebedev and Dana Seesel Bayersdorfer October 26, 2023 by renholding

The Federal Reserve OIG issued a report on SVB’s failure. Media reports have described it as nearly identical to the Barr Report. The report is more critical of the supervisory staff. It does not blame regulatory tailoring for reduced supervisory …

Does Context Matter in Interpreting Financial Information?

By Alex Kim and Valeri V. Nikolaev October 25, 2023 by renholding

The Management Discussion and Analysis (MD&A) section of annual reports is widely credited with providing valuable information about public companies. Yet largely unexplored is the extent to which narrative context influences and complements the numerical data presented in that section. …

SEC Enforcement Chief Speaks on Corporate Compliance

By Gurbir Grewal October 25, 2023 by renholding

I’d like to start by returning to a theme that I’ve touched on before, and that is how public trust in our institutions is faltering.[1] No sector is immune from this trend. From Congress to law enforcement to the

…

Big Three (Dis)Engagements

By Dhruv Aggarwal, Lubomir Litov and Shivaram Rajgopal October 24, 2023 by renholding

Large asset managers play an outsized role in the corporate governance of the largest U.S. public firms. The Big Three (BlackRock, Vanguard, and State Street) collectively manage trillions of dollars of assets and own about a fifth of the average …

Skadden Discusses New CFTC Enforcement Advisory on Penalties, Monitors, and Admissions

By David Meister, Chad E. Silverman and Peter A. Varlan October 24, 2023 by renholding

On October 17, 2023, the Division of Enforcement (the Division) of the Commodity Futures Trading Commission (CFTC or the Commission) issued an advisory to Division staff providing guidance on what recommendations the Division will make to the Commission regarding penalties, …

Can the Uniform Commercial Code Help Save Bitcoin from Speculators?

By Mark Edwin Burge October 23, 2023 by renholding

As the original cryptocurrency, Bitcoin has received more than its share of exposure, including as a harbinger of the possibilities of blockchain. Since the 2008 brainchild of Satoshi Nakamoto hit the internet, supporters of the original cryptocurrency have lauded it …

Debevoise Discusses Supreme Court Case on Whether a Private Right of Action Exists for Deficient MD&A

By Matthew Kaplan, Maeve O’Connor, Jonathan Tuttle, Benjamin Pedersen and Anna Moody October 23, 2023 by renholding

The Supreme Court has agreed to hear an appeal relating to whether there is a private right of action for omissions from the disclosures required by Item 303 of Regulation S-K (i.e., Management’s Discussion and Analysis of Financial Condition and …

The Gamification of Banking

By Colleen Baker and Christopher K. Odinet October 20, 2023 by renholding

Stock trading has been gamified – transformed into a fun and at times casino-like game whose addictive potential captures the attention of consumers and revenues for brokerage firms. Given the widespread notoriety of meme stocks like AMC Entertainment, and Robinhood’s …

Does “Wedge” Size in Dual-Class Firms Matter?

By Rimona Palas, Dov Solomon, Dalit Gafni and Ido Baum October 19, 2023 by renholding

The structure of dual-class stock, where one class of shares confers more votes per share than the other, creates a gap (“wedge”) between voting rights and cash flow rights that allows insiders to raise capital without relinquishing effective control of …

Arnold & Porter Discusses ESG, Whistleblowing, and Compliance Programs

By Ellen Kaye Fleishhacker, Jane Norberg, Christian Schultz, Erik Walsh and Michael Treves October 19, 2023 by renholding

On September 25, the U.S. Securities and Exchange Commission (SEC) announced a US$19 million settlement with the investment adviser DWS Investment Management Americas Inc. (DIMA) for material misstatements and shortcomings in its policies and procedures related to Environmental, Social and …

How Does Corporate Ownership Affect Employee Compensation?

By Claudine Gartenberg and Elaine Pak October 18, 2023 by renholding

Over the past 30 years, private equity firms and hedge funds have reshaped the landscape of corporate ownership. By 2022, firms under private equity management employed over 11 million people, nearly 10 percent of the U.S. workforce, while, in 2021, …

Morrison & Foerster Discusses Agency Actions on “Junk Fees”

By Jeremy Mandell, Julie O’Neill and Rachel Ross October 18, 2023 by renholding

On October 11, 2023, the Federal Trade Commission (FTC) issued a proposed rule to prohibit so-called junk fees, and the Consumer Financial Protection Bureau (CFPB) issued an advisory opinion to large banks and credit unions on charging fees for financial …

The Use of NFTs in Raising Non-Investment Funding

By Joan MacLeod Heminway October 17, 2023 by renholding

In their practices, corporate finance lawyers typically focus on private investments in public and private for-profit businesses. With the introduction of more blockchain applications, however, the structure and implementation of coin and token offerings have also become logical areas for …

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The CLS Blue Sky Blog

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

October 2023