Columbia Law School
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Corporate Governance
Skadden discusses Delaware Supreme Court Reaffirming Important Protections for Corporate Directors
A trio of opinions from the Delaware Supreme Court, each authored by Chief Justice Leo E. Strine, Jr., has reaffirmed Delaware’s deference to the business judgment of disinterested corporate decision-makers and restored important protections for directors that had been weakened …
Morgan Lewis explains New Legislation Makes Sweeping Changes Impacting All Partnerships
All partnerships will be audited at the entity level unless they have 100 or fewer partners and no partnerships as direct partners.
The two-year budget plan passed by Congress on October 30, 2015, and expected to be signed into law …
The Way We Pay Now
The last decade has seen a dramatic shift away from stock options and in favor of performance-based equity or “performance shares” in senior executive packages at large US public companies. Once accounting for over 60% of ex ante executive pay …
Davis Polk discusses Closing Your M&A Deal on a Weekend
In case you are wondering – no, this is not about making the closing more festive, or planning for a champagne celebration after the closing.
As companies think about the timing of the closing, several key drivers are leading both …
Simpson Thacher discusses ISS Issuing Draft Voting Policy Changes, Requesting Comment
On October 26, 2015, Institutional Shareholder Services Inc. (“ISS”) issued key proposed changes to its policies, inviting all interested parties to provide comment.[1] ISS will accept comments through November 9, 2015 at 6 p.m. Eastern Time. If adopted, ISS’s …
Benefit Corporations: Do the Benefits Exceed the Costs?
Benefit corporations are a hot new innovation in corporate law. In just a few years over half of the states have adopted benefit corporation statutes, aiming to provide a form of business association adapted to social enterprises which blend profit-making …
Morrison & Foerster reports SEC Settles Charges that Investment Adviser Failed to Adequately Disclose Changes in Investment Strategy
The SEC settled charges with two investment advisers to a closed-end fund based on allegations that the advisers failed to adequately disclose a change in investment strategy to the fund’s board and its investors. The SEC also found that shareholder …
Proxy Access Revisited: Regulatory Function of the Rule 14a-11 Formula
Proxy access grants shareholders the right to place their director nominees on corporate proxy materials. The Securities and Exchange Commission (the “SEC”) has been trying to regulate proxy access for almost 70 years since 1942. The most recent SEC regulations …
On the Role of Companies’ External Securities Law Advisors – Facilitators or Gatekeepers?
In order to retain their access to large scale capital at low cost, there is no question that companies need to actively manage their compliance with the ever-increasing regulatory requirements in the United States pertaining to corporate disclosure. Managing this …
False Statements of Belief as Securities Fraud
Is a CEO’s statement that “I believe the TVs we manufacture have the highest resolution on the market” potentially actionable as an “untrue statement of material fact” under § 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder? …
Cahill Gordon discusses FASB’s Recent Exposure Drafts on Determinations of Materiality
The Financial Accounting Standards Board (the “Board”) recently issued two exposure drafts that recommend a series of amendments related to determinations of materiality.1 These efforts form part of the Board’s ongoing disclosure framework project, an initiative dedicated to improving …
The Mechanisms of Derivatives Market Efficiency
In their influential 1984 article The Mechanisms of Market Efficiency[1], Ron Gilson and Reinier Kraakman put forward a causal framework for understanding how new information becomes incorporated into the price of publicly-traded equity securities. This framework was grounded …
Wachtell Lipton discusses SEC Narrowing Shareholder Proposal Exclusion for Rule 14a-8 Proposals that “Directly Conflict” with Company Proposals
Yesterday [October 22, 2015], the Staff of the Securities and Exchange Commission’s Division of Corporation Finance issued Staff Legal Bulletin No. 14H. SLB14H formally narrows the long-standing approach to interpreting Rule 14a-8(i)(9), which permits a company to exclude a …
A Debate on the Morality of Insider Trading
Today, we host two pieces debating the potential for firm disclosed insider trading to occur without harm to the company, its investors and other market participants. John P. Anderson, Associate Professor, Mississippi College School of Law, proposes that under some …
The Importance of “The Law of Conservation of Securities”: A Reply to John P. Anderson’s “What’s the Harm in Issuer-Licensed Insider Trading?”
Professor John P. Anderson’s article, What’s the Harm in Issuer-Licensed Insider Trading [1] argues that my “Law of Conservation of Securities” has no moral relevance to the question whether to allow such trading.
A stock market insider trade has two …
What’s the Harm in Issuer-Licensed Insider Trading?
I have argued that insider trading is morally harmless where the issuer approves the trade in advance and makes certain ex ante and ex post public disclosures.[1] I have also suggested that reforming the law to permit such issuer-licensed …
Weil discusses Navigating Proxy Access: A Roadmap for the Board of Directors
The subject of “proxy access” represents another turning point in the corporate governance of public companies that many boards of directors will need to face, and for some, much sooner than later. Proxy access, which has come to the forefront …
Deterring Repeated Fraud
Any successful fraudster can tell you the golden rule of his trade: if no one notices your fraud, keep doing it. The possibility to repeat past success makes fraud very costly: for example, health care fraud accounts for one to …
Kirkland & Ellis discusses NOL Poison Pill – A Timely Prescription
With recent stock market volatility and sharp drops in stock market prices coupled with the continuing low interest rate environment, management and boards of directors of companies with significant net operating loss carryforwards (NOLs) may want to consider taking steps …