The Upside for Retail Investors of Ethereum Spot Exchange Traded Funds

By David Krause July 1, 2024 by renholding

Investors and regulators are monitoring the impact of two cryptocurrency spot exchange traded funds (ETFs) approved by the SEC in 2024.[1] The Bitcoin spot ETFs, which began trading in January, have garnered substantial interest from both retail and institutional …

Is DEI Valuable to Investors?

By Hoa Briscoe-Tran June 27, 2024 by renholding

In recent years, corporate diversity, equity, and inclusion (DEI) initiatives have become a hot topic in boardrooms and beyond. While many companies have embraced these efforts, investors have started to question whether DEI initiatives are truly valuable or merely a …

Davis Polk Discusses Appeals Court Decision Vacating SEC’s Private Fund Advisers Rule

By Leor Landa, Gregory S. Rowland, Michael S. Hong, Sijia Cai and Michael W. Brasher June 11, 2024 by renholding

On June 5, 2024, a three-judge panel on the U.S. Court of Appeals for the Fifth Circuit unanimously ruled to vacate the SEC’s new rules and amendments under the Investment Advisers Act of 1940 (the Advisers Act) that targeted private …

Do Board Observers Improve Corporate Governance?

By Nizan Geslevich Packin and Anat Alon-Beck May 15, 2024 by renholding

In the complex world of corporate governance, a novel mechanism has reemerged: board observers. Operating without the conventional voting rights of board members, these individuals have become pivotal in bridging the gap between ambitious startups and their venture capital (VC) …

Commissioner Dissents from SEC Rule on Climate-Related Disclosures

By Mark T. Uyeda March 7, 2024 by renholding

Today [March 6], much emphasis will be placed on how this rule has been dialed-back from the proposal, is focused on providing material information to investors, and that the Commission is not a climate regulator. To that, I emphasize the

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How Crypto Fraud Affects Investor Behavior

By Ben Lourie, Alex Nekrasov, Phong Truong and Chenqi Zhu January 8, 2024 by renholding

In the world of financial markets, fraud poses a significant threat, undermining investor trust and leading to misallocation of resources. Cryptocurrency markets present heightened risks of fraud, which draws the attention of regulators, legal experts, and investors. The Securities and …

Visual Information in the Age of AI

By Sean Cao, Yichen Cheng, Meng Wang, Yusen Xia and Baozhong Yang August 17, 2023 by renholding

Information disclosed by corporations plays a fundamental role in shaping asset prices and the expectations of investors. That information typically comes in financial statement releases, conference calls, annual reports, and the news media. In a recent paper, though, we …

The Role of Controlling Shareholders Is Missing from the Debate over Short-Termism

By Tom Vos August 7, 2023 by renholding

The debate over short-term thinking at corporations has so far focused largely on companies in the U.S. and the UK. The fact that controlling shareholders are less common in those countries than in many others may explain why the extensive …

Wachtell Lipton Revisits the “New Paradigm” for Corporate Governance

By Martin Lipton, Steven A. Rosenblum, Karessa L. Cain, Elina Tetelbaum and Carmen X.W. Lu July 21, 2023 by renholding

In view of the attacks on “woke” corporations, ongoing legislative opposition to the consideration by investors and corporations of environmental, social and governance (ESG) issues, legal challenges to elements of ESG itself (notably, initiatives designed to further diversity, equity and …

SEC Chair Gensler Speaks to Investor Advisory Committee

By Gary Gensler June 23, 2023 by renholding

Good morning. I’m pleased to speak with the Investor Advisory Committee. As is customary, I’d like to note that my views are my own as Chair of the Securities and Exchange Commission, and I am not speaking on behalf of

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Can ChatGPT Help Investors Process Information?

By Alex G. Kim, Maximilian Muhn and Valeri Nikolaev June 19, 2023 by renholding

Since the launch of ChatGPT in November 2022, there’s been an exponential surge in the use of generative AI tools. Anecdotal evidence suggests that these tools are also of considerable interest to financial firms. As a case in point, Ken …

How Earnings Announcements Discipline Markets Skewed by Media Coverage

By Eric Holzman, Brian Miller and Brady Twedt June 12, 2023 by renholding

Earnings announcements serve a well-recognized role of conveying important information about firm performance to the market. However, an often-overlooked role of earnings releases is their ability to discipline market expectations.

Our study examines this disciplining role in the context of …

On Earnings Calls, It’s How Managers Say It That Can Affect the Market

By Bok Baik, Alex G. Kim, David Sunghyo Kim and Sangwon Yoon June 6, 2023 by renholding

Corporate disclosures increasingly include multimedia content such as audio, images, and videos. In fact, as of 2022, 83 percent of U.S. public firms used graphics in annual reports and various other communications. Additionally, companies commonly provide their earnings calls, shareholder …

How Corporate Investments in Fintech Startups Affect the Performance of the Startups and the Corporations

By Thomas Chemmanur, Harshit Rajaiya, Michael Imerman and Qianqian Yu June 1, 2023 by renholding

Financial Technology, or “fintech,” is one of the fastest growing sectors in finance. In 2010, the total amount of funding raised by fintech firms was just over $1 billion dollars, while in 2018, total funding was around $40 billion. In …

ISS Discusses Water Risks from an Investor Perspective

By Cosima Reiff, Erina Molina and Erin Wood April 7, 2023 by renholding

Water means life. More than half of our bodies consist of water, and it is an indispensable resource for production of food and other goods. It is fundamental for societies and ecosystems alike. While water covers approximately 70% of our …

Rethinking Cautions Accompanying Investment Predictions

By Franklin A. Gevurtz January 23, 2023 by renholding

We are constantly bombarded with warnings about dangers to our health or wellbeing. Sometimes, however, the warnings might facilitate the danger. In a new article, I show how the cautionary statements that commonly accompany predictions of corporate performance fall into …

When Will Investors Vote for Socially Beneficial but Costly ESG Policies?

By Daniel Friedman, John Duffy, Jean Paul Rabanal and Olga Rud January 18, 2023 by renholding

Investors are increasingly interested in whether firms implement environmental, social, and governance (ESG) policies that, for example, reduce the firms’ carbon footprints, diversify their workplaces, or better protect customers’ private information. Some socially beneficial policies (e.g., improving energy-efficiency) may also …

Making Audit Committee Disclosure More Transparent Requires Investor Feedback

By Lauren Cunningham, Sarah Stein, Kim Walker and Karneisha Wolfe January 12, 2023 by renholding

The role of the audit committee in a company’s board of directors has changed significantly since the passage of the Sarbanes-Oxley Act of 2002 (SOX). Traditionally, audit committees have overseen the company’s independent auditor, the internal audit function, and other …

ISS Discusses ESGF Rating as a Measure of Investing Quality

By Christopher Kuales, Casey Lea and Gavin Thomson December 22, 2022 by renholding

Investors routinely consider both the ESG quality (i.e., the quality of a company’s management approach to environmental, social and governance (ESG) risks and opportunities) and the Financial quality (i.e., a company’s risk-adjusted profitability) of a firm in their day-to-day investment

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Why Do Institutional Investors Request Climate-Related Disclosures?

By Shira Cohen, Igor Kadach and Gaizka Ormazabal July 20, 2022 by renholding

An important debate is playing out over the role of institutional investors in the global effort to mitigate climate risk and achieve net-zero emissions. While some believe that institutional investors are sufficient catalysts in preparing us for a low carbon …

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