
Finance & Economics

ISS Publishes Guidance on Director Compensation (and Other Qualification) Bylaws
In the latest instance of proxy advisors establishing a governance standard without offering evidence that it will improve corporate governance or corporate performance, ISS has adopted a new policy position that appears designed to chill board efforts to protect against …
Wachtell Update on the Halliburton Fraud-on-the-Market Case

Agencies Approve Volcker Rule Revision as an Interim Final Rule
Restricted Securities vs. Control Securities: What Are the Differences?
The following comes to us from Bradley Berman, Of Counsel, and Steven Bleiberg, associate, in the New York office of Morrison & Foerster LLP. It was originally published here by INSIGHTS.
Rule 144 under the Securities Act of …

Increasing Transparency, Consistency, and Fairness in Pre-Trial Bargaining Under the Foreign Corrupt Practices Act
The following comes to us from Peter Reilly, Associate Professor of Law, Texas A&M School of Law.
Wal-Mart is one of the wealthiest and most powerful companies in the world. And billionaire gambling magnate Sheldon Adelson is one of the …

Shadow Banking: The Regulatory Landscape at the Dawn of 2014
In the wake of the 2008 crisis, it soon became apparent that the fault lines of the global financial system extended far beyond the regulated banking sector to the less regulated “shadow banking” sector. Nonbank financial entities including (but not …

Shareholder Wealth Maximization and its Implementation under Corporate Law
The following comes to us from Bernard S. Sharfman, Visiting Assistant Professor of Law at Case Western Reserve University School of Law.
When should courts participate in determining if a corporate decision maximizes shareholder wealth? That is the question at …

Recalculating “Loss” in Securities Fraud
The following comes to us from Scotland M. Duncan, an attorney at Jones Day in Pittsburgh, PA.*
It is axiomatic that calculating the amount of loss within securities fraud cases is essential to criminal sentencing. Until about a year …

SEC Releases Report on Regulation S-K’s Disclosure Requirements
On December 20, 2013, the Securities and Exchange Commission released a report, required by Section 108 of the JOBS Act, that reviews the disclosure requirements in Regulation S-K. The report summarizes the Commission’s prior initiatives, reviews the current disclosure requirements, …
Shearman & Sterling discusses Basel III Framework: The Credit Valuation Adjustment (CVA) Charge for OTC Derivative Trades
The credit valuation adjustment charge in Basel III appears, at first glance, to be the preserve of quantitative analysts and the like. However, while complex, the CVA charge requires more widespread attention as it materially increases the required capital for

Conflicts of Interest and Competition in the Proxy Advisory Industry
The following comes to us from Tao Li, Assistant Professor, Warwick Business School
Proxy advisors, private firms that help investors decide how to vote their shares, play an extremely powerful role in shaping corporate governance. As institutional investors vote billions …
Morrison Foerster’s Regulatory Reform Glossary
On Monday, December 16th, Morrison Foerster released what may be a first-of-its-kind regulatory reform glossary. The glossary, which is not comprehensive, is intended to serve as a helpful summary of neologisms and other acronyms (e.g., SIFI), nicknames (e.g., repo), and …

Hedge Fund Advisers’ Systemic Risk Disclosures in Bankruptcy
Hedge funds’ distressed and default debt investments in the United States have increased dramatically in the last two decades (from around $70 billion in 1998 to around $867 billion in 2007) and hedge funds with strategies that focus on distressed …

How Financial Institutions May Benefit from Changes to the Rule Against Perpetuities
In the late 1980s, large financial institutions successfully marketed a new exemption in the tax code authorizing the perpetual insulation of wealth from federal transfer taxes. Specifically, the 1986 tax code reforms included an exemption from the federal Generation Skipping …

Federal Agencies Adopt the Long-Awaited Volcker Rule

Independent Directors as a Handy Political Tool
Boards of public corporations have more independent directors than ever before. Sixty percent of boards of S&P 500 companies are not only majority independent, but have a single insider on the board: the CEO. While Jamie Dimon is still CEO …
Debevoise & Plimpton discusses the Proposed Leverage Coverage Ratio (LCR) Rule
The following is based on a memo from Debevoise & Plimpton, published on November 1, 2013, which is available here. The original memo contains a useful graphic representation of the LCR equation which has been omitted from this post.

SEC Enforcement: Talking the Talk, But Walking the Walk?
Almost everyone has an opinion about securities enforcement. Many are disappointed (and even angry) that “few high level executives” have been prosecuted (criminally or even civilly) in connection with the 2008 financial crisis.[1] Deep in their bunker, the SEC …
Davis Polk discusses SEC Release of Final Municipal Advisor Registration Rules, Part II: Permanent Registration Process
The following is based on a memo from Davis Polk, published on October 7, 2013, which is available here. The original memo contains many useful tables and definitions which have been omitted from this post.
On September 18, 2013, …