Columbia Law School
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Finance & Economics
Wachtell Lipton discusses Staggered Boards, Long-Term Investments and Long-Term Firm Value
Recent econometric studies (“empirical evidence”) definitively rebut the position taken by the Harvard Law School Shareholder Rights Project (SRP) that classified boards are associated with lower firm value and inferior outcomes for shareholders. After correcting serious statistical and econometrical flaws…
The Nonprime Mortgage Crisis: Willful Blindness and Positive Feedback Lending
The Wall Street Journal recently reported that federal prosecutors are pursuing criminal cases against bank executives for allegedly selling flawed mortgage securities. The crux of the cases? That the bankers ignored warnings they were packaging too many shaky mortgages into …
Gibson Dunn explains Resolution Triumphs: Proposed U.S. TLAC and Long-Term Debt Requirements for G-SIBs
At an October 30th open meeting, the Board of Governors of the Federal Reserve System (Federal Reserve) approved a proposed rule (Proposed Rule) that would impose Total Loss Absorbing Capacity (TLAC) and long-term debt (LTD) requirements for globally significant …
Corporate Social Responsibility and Environmental Sustainability
In a recently published book chapter,[1] I explore the prospects for corporate social responsibility (CSR) as a partial solution to the environmental sustainability challenge. Many large corporations affect the environment through their operational activities and their choices about product …
Milbank discusses “Spoofing” in Financial Markets
Section 4c(a)(5)(C) of the Commodities Exchange Act (CEA), 7 U.S.C. § 6c(a)(5)(C), newly added to the CEA by the Dodd-Frank reform legislation, prohibits spoofing as well as activity that is “of the character” of spoofing. The statute defines “spoofing” but …
Millstein Governance Forum on December 10, 2015 at CLS
On December 10th, Columbia Law School’s Millstein Center on Global Markets and Corporate Ownership will be hosting its 10th annual Millstein Governance Forum.
For the past decade, the Forum has served as one of the premiere …
Taxes and Ability to Pay in Municipal Bankruptcy
After languishing relatively disused for nearly eighty years, municipal bankruptcy is part of the new normal. The eyes of the nation were riveted on Detroit, and smaller filings across the country have proliferated in recent years. As Warren Buffett has …
Who Should Pick Board Members?
There is a frenzied rush for shareholders to get a new ‘right”, the right to put up their own nominees for board membership. Boards of directors, so goes a dominant opinion, are not to be fully trusted to pick the …
Fried Frank explains BMC Software and the Court’s Ongoing Incremental Path to Increased Reliance on the Merger Price in Appraisal Cases
The Delaware Court of Chancery has been on a slow but clear path toward increased reliance on the merger price in determining fair value in appraisal cases. While the court’s reliance on the merger price as the best indicator of …
Too Big to Tax? Vanguard and the Arm’s Length Standard
Vanguard is the world’s largest complex of mutual funds, with over $3 trillion in assets under management, including $215 billion added in 2014. Vanguard’s main attraction to investors is its low costs. Profs. Freeman and Brown (2000) report that the …
The Influence of Political Bias in State Pension Funds
The propensity to favor local investments is not restricted to individual investors alone but is also common among institutional investors. It also exists in common equity and private equity portfolios of state public pension funds. This phenomenon, known as local …
Jones Day explains The Future of Mandatory Consumer Arbitration Clauses
Arbitration as a means of dispute resolution is intended to help consumers and businesses save time and money and achieve fair results when compared to traditional litigation. Millions of contracts for consumer financial products and services have a pre-dispute arbitration …
On Thin Ice: Climate Change, Exxon, the NYAG and the Martin Act
The New York Attorney General, Eric T. Schneiderman, created a stir this month by opening an investigation of Exxon Mobil Corp. pursuant to the Martin Act (New York’s “Blue Sky” Statute).[1] Various Congressmen, Senators and environmental groups also asked …
Gibson Dunn discusses Depomed Decision Highlighting Importance of Careful Monitoring of M&A Non-Disclosure & Use Obligations
On November 19, 2015, in Depomed, Inc. v. Horizon Pharma plc, the Superior Court of California, County of Santa Clara granted Depomed’s request for a preliminary injunction to enjoin Horizon’s hostile exchange offer to acquire Depomed. The injunction was …
Unions and Shareholder Proposals
Invigorating the shareholder proposal process is a top priority for corporate governance reformers. But the possibility that self-interested shareholders could use proposals to harass or pressure managers to accommodate their interests is a cause for concern. Union shareholders attract more …
Do Managers Seek Control and Entrenchment?
Do managers seek control of the firm, or the level of ownership consistent with entrenchment? Entrenched managers own shares within a range which is high enough to give them control, but sufficiently low to make other shareholders bear the brunt …
Sullivan & Cromwell discusses Proxy Access 2016
As companies prepare for the 2016 proxy season, the number of adopted proxy access bylaws has almost doubled in recent months and at least two new forms of proxy access shareholder proposals have appeared. On the company side, proxy access …
Are Voluntary Internal Controls-Related Audit Report Disclosures Informative in IPOs?
The Sarbanes-Oxley Act of 2002 (SOX) requires management and auditors to opine on the effectiveness of internal controls for many public companies. One intention of SOX is to improve the reliability of information public companies provide to the financial markets …
Latham & Watkins discusses SEC Adopting Final Crowdfunding Rules
On October 30, 2015, the US Securities and Exchange Commission (SEC) adopted final rules to permit companies to offer and sell securities through crowdfunding (the Crowdfunding Rules).1 The Crowdfunding Rules enable investors to purchase securities in crowdfunding offerings, subject to …