Columbia Law School
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Finance & Economics
Changing Law to Address Changing Markets: A Consequence-Based Inquiry
When should changes in markets for financial securities drive changes in law? In my forthcoming essay, available here, I argue that a normative framework for making that examination would increase transparency and legitimacy. It would also help counter the tendency …
A Tip for Financial Advisers to Retirement Savers: Heed the Prudent Investment Rule
Today the bulk of American workers’ retirement savings, worth trillions of dollars, is in self-directed individual retirement accounts (IRAs) and defined contribution pension plans. Understandably, many workers with self-directed accounts turn to financial advisers for help in matching the vast …
Morrison & Foerster discusses FDIC’s Release of Proposed Third-Party Lending Guidance
Corporate Governance and Regulation: Can There Be Too Much of a Good Thing?
After every crisis, academics, policymakers and other observers reflect on what went wrong and what could have been done differently. This in turn leads to some reforms to laws and regulations. In the wake of widespread, multi-country corporate governance failures …
The Fiduciary Gap
Contractarians, who believe that fiduciary relationships are a species of contract, and anti-contractarians, who believe those relationships are sui generis, have long debated what fiduciary duties are and how they should be applied. Contractarians frame the fiduciary duty as one …
How Conservative Accounting Helped Boost Investment during the Financial Crisis
A host of studies have examined the link between accounting and the 2007-2008 global financial crisis, most of them focusing on whether fair value accounting or accounting discretion at financial institutions helped skew valuations on bank balance sheets. In our …
Culture and Conduct: Beyond Regulation and Compliance
“Culture, more than rule books, determines how an organization behaves.” – Warren Buffet[1]
In recent years, there have been ongoing occurrences of serious professional misbehavior, ethical lapses and compliance failures at financial institutions. It was the crisis that exposed …
The Golden Ratio of Corporate Deal-Making
CEO Home Bias and Corporate Acquisitions
In 2010, after considering 400 possible targets, Indiana-based funeral casket manufacturer Hillenbrand Inc. announced a plan to acquire K-Tron International Inc., a Pitman, New Jersey firm which makes industrial coal crushers and feeding equipment (including a machine to shoot raisins …
A New Perspective on Merger Activity and Stock Prices
Merger activity seems to rise in step with the market. Academic papers suggest this may be due to bidders exploiting overvalued shares, a pro-cyclicality of merger economies of scale or available capital for deals, or simply the behavioral pressures of …
Drinker Biddle analyzes the First 50 Crowdfunding Offerings
The Securities and Exchange Commission (SEC) is now accepting Form C filings from private companies seeking to sell securities through registered crowdfunding portals. We have been following the nascent crowdfunding space closely and will continue to monitor the adoption of …
Financial Weapons and Modern Warfare
A new type of warfare is upon us. In this new mode of war, finance is the most powerful weapon, bullets are not fired, financial institutions are the targets, and almost everyone is at risk. Instead of smart bombs, improvised …
Weil Gotshal provides Practical Tips for “Self-Correcting” Non-GAAP Disclosure in Light of the SEC’s Updated Guidance
In the wake of its release on May 17, 2016 of updated Compliance and Disclosure Interpretations (“CDIs”) relating to the disclosure of non-GAAP financial measures, the SEC’s Division of Corporation Finance has indicated in no uncertain terms that now is …
Proskauer discusses Whistleblower Concerns for Private Fund Advisers
As we have previously observed, private fund advisers face a difficult challenge when SEC guidance (in the form of a speech or a public enforcement order) indicates that certain long-standing practices may be contrary to the securities laws. What does …
Regulation by Government-Sponsored Reinsurance in Catastrophe Management
Reinsurance can be understood as simply insurer’s insurance. Under an insurance contract, a policyholder is protected from loss by transferring risk to an insurer; analogously, under a reinsurance contract, an insurer (the cedent or ceding company) is protected from exposure …
Shearman & Sterling discusses SEC’s Proposal to Revamp its Mining Disclosure Requirements
On June 16, 2016, the US Securities and Exchange Commission (“SEC”) issued a proposed rule (available here), which, if adopted, would result in a revamp of its disclosure requirements for mining company issuers. The proposed rule is intended to …
PwC discusses Preventing the Next $100 Million Bank Robbery
Attackers last February reportedly stole $81 million from the Bangladesh Central Bank by obtaining and exploiting the bank’s credentials for the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.[1] The attack – one of the biggest bank robberies in …
Latham & Watkins discusses CFTC’s Enforcement Action Against Online Cryptocurrency Exchange
A recent enforcement action reflects the CFTC’s expanded jurisdiction and provides further clarity on what constitutes “actual delivery” in cryptocurrency trading.
On June 2, 2016, the US Commodity Futures Trading Commission (CFTC) issued an order (the Bitfinex Order) filing, and …
Clifford Chance discusses How to Leave the EU: The Key Article 50 Issues and UK Constitutional Questions
Much has been written and spoken in the immediate aftermath of the UK’s EU referendum about what the UK must do to leave the EU. We look at the key questions in this area, such as whether the UK has …