Climate Change, West Virginia v. EPA, and the SEC’s Distinctive Statutory Mandate

In March 2022, the Securities and Exchange Commission (SEC) proposed a rule that would require publicly traded companies to provide investors with various climate-related disclosures (the Proposal).[1]The rule has generated extensive debate and the SEC has received more than 4,000 substantive comment letters and more than 10,000 form letters to date. Commenters have raised a variety of concerns about the Proposal, including the extent to which the SEC has the authority to mandate climate-related disclosure. Since the Supreme Court’s June 2022 ruling in West Virginia v. EPA, some commentators have also asserted that the Proposal runs afoul … Read more

Purpose Proposals 

The shareholder proposal has long been an effective tool for shareholders to bring emerging corporate governance issues to the attention of a company’s board of directors, its managers, and their fellow shareholders. Over time, shareholder proposals have driven a variety of governance reforms, from eliminating staggered boards to adopting majority voting in director elections. Although the subjects of shareholder proposals vary substantially, and some fade quickly into obscurity, others gradually build sufficient support leading not only to their implementation but to their incorporation into future standards of good governance.

At the same time, shareholder proposals are controversial. Critics argue that … Read more

“Centros,” California’s ‘Women on Boards’ Statute, and the Scope of Regulatory Competition

It has been 20 years since the European Court of Justice issued its decision in Centros Ltd. v. Erhvervs – og Selskabsstyrelsen (Centros).  Since that time, Centros has been widely understood as shifting the European Union (EU) from the real seat doctrine, in which a corporation is governed by the corporate law of the country in which it is headquartered, to an era of increased corporate mobility.  Specifically Centros, together with subsequent decisions, allowed EU corporations, by incorporating in another jurisdiction, to choose their governing corporate law deliberately.

In our working paper, “Centros, California’s ‘Women on … Read more

Making Sustainability Disclosure Sustainable

Issuers, investors, and regulators are paying increasing attention to corporate sustainability.  Commentators have proffered a variety of explanations for this attention ranging from the argument that corporations are morally obligated to act in a socially responsible manner to the claim that sustainability is linked to economic performance.  Responding to the demand for sustainability information, issuers are producing hundreds of pages of sustainability reports, and the number of intermediaries that have developed reporting standards and sustainability rating systems has proliferated.  The range of approaches to disclosure, however, limit the comparability and reliability of the information disclosed, and investors repeatedly express dissatisfaction … Read more

Toward a Better Understanding of Event Studies in Securities Litigation

In June 2014, the Supreme Court issued its second decision in the Halliburton securities fraud litigation.[i]  Halliburton II reaffirmed the court’s prior decision in Basic Inc. v. Levinson,[ii] which provided plaintiffs in federal securities fraud litigation with a presumption of reliance based on the fraud on the market theory.  Halliburton II also heightened the importance for both plaintiffs and defendants of using event studies at the class certification stage in order to address price impact. Price impact concerns whether allegedly fraudulent statements significantly affected market price.  Event studies had already become a critical litigation tool for establishing … Read more

Newman Reins in Criminal Prosecution of Remote Tippees for Insider Trading

In its recent decision in United States v. Newman,[1] the United States Court of Appeals for the Second Circuit provided important guidance on the scope of insider trading liability. The case concerned the liability of two hedge fund managers, Anthony Chiasson and Todd Newman, who were alleged to be members of a group of financial analysts who shared information about various publicly-traded companies. Chiasson and Newman were so-called “remote tippees” in that they were each multiple levels removed from the sources of the information – insiders at Dell and Nvidia. Neither defendant was alleged to have had direct … Read more