fiduciary duty
Do Fiduciary Duties Matter?
Do fiduciary responsibilities have any effect on the behavior of firm insiders? In a series of studies, I find empirical evidence that stronger fiduciary duties reduce managerial risk taking. And that is not all. The evidence indicates that stronger fiduciary …
SEC Chair Clayton Discusses Regulation Best Interest and Investment Advisers
As many of you know, in June, the Securities and Exchange Commission adopted a package of rules and interpretations that will enhance the quality and transparency of retail investors’ relationships with broker-dealers and investment advisers.[1] Importantly, they bring the
Statement of Concerned Securities Law Professors Regarding Investment Advisers and Fiduciary Obligations
We circulate this statement as law professors specializing in the field of securities regulation who are concerned that the Securities and Exchange Commission (the “Commission”) has moved in a new direction that is both contrary to its past practice and …
Corwin at a Crossroads: Could DVMT Stock Be the Tracker Jacker in Dell’s Hunger Games?
Of all the conjured hazards faced by the teenage gladiators in the dystopian novel The Hunger Games, the Tracker Jacker (a genetically engineered wasp) was the most deadly and unpredictable when provoked. Dell Technologies Inc. may soon have to …
Fried Frank Discusses the Obligations of LLC Directors and Managers
There are now more than twice as many entities formed in Delaware as LLCs and other alternative entities as are formed as corporations. Private equity funds and hedge funds often are formed as LLCs or limited partnerships to take advantage …
SEC Investment-Management Director Talks Conduct Standards and Liquidity Risk
I am going to touch on two areas of work that reflect our efforts to be a responsive regulator that seeks engagement from all as we develop regulatory policies: the standards of conduct for investment professionals and liquidity risk management.…
Sexual Harassment and Corporate Law
Tronc Chairman Michael Ferro became the latest corporate executive to resign amid accusations of unwanted sexual advances when he stepped down from the helm of the newspaper publishing chain in mid-March. Ferro joins a long list of high-profile executives who …
Fried Frank Discusses Delaware Decision Absolving LCC Board of Duty to Maximize Price
In Miller v. HCP (Feb. 1, 2018), the Court of Chancery dismissed claims made against the members of a limited liability company board, a majority of whom had been appointed by the private equity firm that was the company’s controlling …
Benefit Corporations and Public Markets
Benefit corporations are a new legal form of business association created to support social enterprises. Over half of U.S. states have adopted a benefit corporation statute, and over 2,000 companies have chosen the form. So far, almost all of these …
Paul Weiss Discusses Dismissal of Breach of Duty and Quasi-Appraisal Claims
Recently in In re Cyan, Inc. Stockholders Litigation, the Delaware Court of Chancery dismissed a fiduciary duty claim and a request for a quasi-appraisal remedy in connection with the acquisition of Cyan, Inc. by Ciena Corporation. Relying on principles of …
Proskauer Rose Discusses How Labor Department’s New Fiduciary Rule Affects Investment Fund Managers and Advisers
The U.S. Department of Labor’s (DOL) final rule significantly expanding when a person is considered to be a fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (Code) as a result of providing …
Skadden Discusses Director Disinterestedness and Independence in Delaware
Delaware law provides important tools for directors to maintain control of derivative lawsuits.1 One such tool is the “demand requirement” embodied in Court of Chancery Rule 23.1, which requires that before a stockholder acts on behalf of the corporation, …
Counterarguments to SEC Statistical Analysis in Enforcement Actions and Inquiries
In recent years, the Securities and Exchange Commission has focused on using quantitative analysis to identify statistical outliers and anomalies through programs like the Aberrational Performance Inquiry, which evaluates hedge fund returns,[1] and the Accounting Quality Model (informally known …
Skadden Discusses Trump’s Potential Impact on Executive Compensation
President Donald Trump’s campaign proposals included changes to tax rates and a promise to repeal the Dodd-Frank Act. If enacted, these proposals could have a significant impact on the way businesses handle executive compensation, permitting companies greater flexibility in structuring …
Salman Insider-Trading Case a Hollow Win for Prosecutors
The dominant narrative about Salman v. United States, the first insider trading case decided by the U.S. Supreme Court in almost 20 years, is that it was a big win for federal prosecutors. That is only part of the story.…
Shearman & Sterling Examines the Changing Fiduciary Duty Landscape in a Trump Presidency
The fiduciary standards for institutions and individuals providing investment advice throughout the retail investment and municipal securities markets are currently undergoing significant change. Following on the heels of the issuance of a final Department of Labor (the “DOL”) fiduciary rule …
PwC Discusses Election’s Impact on Advisers’ Duty to Retirement Investors
We believe the recent election will have less impact on the Department of Labor’s (DOL) fiduciary duty rule than some in the media are currently speculating.[1] While some provisions may be modified by a new Administration, we believe the …
A Comparative Analysis of Dual Class Share Structures
The efficiency of dual class share structures is controversial, and whether to allow them is a difficult choice. Though much has been written about this topic, no comprehensive picture of dual class structures’ governance effects has emerged.
Although dual class …
Fiduciary Accountability for Corporate Officers
On September 29, in the case of Palmer v. Reali, the U.S. District Court for the District of Delaware confronted claims that two corporate officers engaged in conduct that breached their fiduciary duties and eventually led to the bankruptcy …