investors

Dissecting the Conundrum of Investing in Hedge Funds Despite High Fees and Mediocre Returns

By Cary Martin Shelby November 29, 2018 by renholding

October 2018 ended with the hedge fund industry suffering its worst monthly decline since September 2011, according to the HFRI Fund Weighted Composite Index. Some commentators are predicting that 2018 will end with the hedge fund industry experiencing its worst …

Wachtell Lipton Discusses Default Activism in the Debt Markets

By Steven A. Cohen, Joshua A. Feltman, Emil A. Kleinhaus and John R. Sobolewski November 26, 2018 by renholding

We have recently seen an increase in contentious disputes, some public and many not, between companies and their debt investors.  Clashes between borrowers and their lenders are as old as debt itself, but what we are seeing now is something …

Investor-Paid Credit Ratings and Conflicts of Interest

By Leo Tang, Marietta Peytcheva and Pei Li November 14, 2018 by renholding

Credit ratings provide information regarding a company’s default probability.  Ratings are relied upon extensively in regulation and private contracting and play a crucial role in the functioning of the capital markets.  However, since the major credit rating agencies (CRAs) operate …

Do Public and Private Firms Invest Differently?

By Laura Kawano, Elena Patel and Nirupama Rao November 2, 2018 by renholding

Equity markets are an important source of capital financing for firms, particularly in the United States. These large, liquid markets channel capital from savers to firms and facilitate corporate investment by distributing risks among many smaller investors. There is concern, …

SEC Commissioner Discusses Improving Information for Investors in the Digital Age

By Kara M. Stein October 26, 2018 by renholding

I last spoke to you in May 2014 about “Building Momentum.”[1] At the time, I was a rookie Commissioner. Now, I stand before you after five years as a Commissioner and over 5,700 votes under my belt. It has

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SEC’s Co-Director of Enforcement Talks About Her Division’s Impact

By Stephanie Avakian September 21, 2018 by renholding

My speech today [1] happens to fall a little less than two weeks before the close of Steve Peikin’s and my first full fiscal year as Co-Directors of the SEC’s Division of Enforcement.  In many respects, a year is an

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Do Investors Care Who Did the Audit?

By Marcus M. Doxey, James G. Lawson, Thomas J. Lopez and Quinn T. Swanquist September 14, 2018 by renholding

In 2008, the U.S. Department of the Treasury’s Advisory Committee on the Auditing Profession called for a “standard-setting initiative to consider mandating the engagement partner’s signature on the auditor’s report” as a way to increase audit transparency.[1] The Public …

SEC Chair Talks Investor Roundtables on Conduct Standards for Investment Professionals Rulemaking

By Jay Clayton August 23, 2018 by renholding

In April 2018, the Commission proposed for public comment a significant rulemaking package designed to serve our Main Street investors that would (1) require broker-dealers to act in the best interest of their retail customers, (2) reaffirm and in some

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Sullivan & Cromwell Discusses “Day One” Market Reactions to Bank Mergers

By H. Rodgin Cohen and Mitchell S. Eitel August 13, 2018 by renholding

There has recently been a pick-up in bank merger and acquisition activity that likely reflects both the increased importance of scale in the banking industry, particularly in the technology area, and regulatory and legislative developments that reduce certain obstacles to …

Do Financial Analysts Help Improve Firm Productivity?

By Marco Navone, Eliza Wu and Thomas To August 7, 2018 by renholding

Academic researchers in corporate finance have in recent years taken a renewed interest in the impact of private firms on employment, growth, and other positive developments in national economies. In a recent article, we develop this new field of research …

Corporate Governance Consequences of Passive Investing

By Giovanni Strampelli July 19, 2018 by renholding

The popularity of index funds, which automatically track an index of stocks, is continuing to grow in the U.S, and, albeit less intensely, in the EU. Due to the high concentration of the index funds industry, the exponential rise of …

Taking Investor Preferences Seriously

By Kathryn Judge July 11, 2018 by renholding

Over the last half century, finance has made remarkable progress explaining the pricing of financial assets.  In relying on portfolio theory, however, mainstream pricing models tend to ignore investor preferences for certain asset types.  This is a mistake.  In a …

Bitcoin’s Price Chaos Demonstrates the Importance of Sophisticated Financial Products

By Peter Charles Bassine and Harrison Fregeau June 28, 2018 by renholding

Between January 1 and December 17, 2017, the value of a single Bitcoin skyrocketed from under $1,000 to nearly $20,000. To match Bitcoin’s 1183 percent return during this period, an investor would have needed the equivalent of 38 years’ average …

SEC Chief Accountant Talks Financial Reporting and Innovation

By Wesley Bricker June 7, 2018 by renholding

Thank you, Robert [Hodgkinson] for the kind introduction. Thank you, also, to the Institute of Chartered Accountants in England and Wales (“ICAEW”) for sponsoring this event. I am delighted to be in London and with you this afternoon. London continues …

Can Adverse Effects of Private Management-Investor Meetings Be Mitigated by Board Independence?

By Robert M. Bowen, Shantanu Dutta, Songlian Tang and Pengcheng Zhu May 7, 2018 by renholding

Private meetings between management and investors (site visits) occur worldwide and are generally held at corporate headquarters with invited investors and sell-side analysts.  Ng and Troianovski (WSJ, 2015) report that U.S. investors spend $1.4 billion a year for face time …

SEC Investment-Management Director Talks Conduct Standards and Liquidity Risk

By Dalia Blass May 2, 2018 by renholding

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.…

CamberView Partners Offers 2018 Proxy Season Preview

By Abe M. Friedman and Bob McCormick April 13, 2018 by renholding

With the vast majority of annual meetings set to be held in the coming weeks, the contours of the 2018 proxy season are coming into focus. While previous years are remembered for defining initiatives — “say on pay” in 2011, …

SEC Commissioner Jackson Talks Mandatory Arbitration

By Robert J. Jackson, Jr. February 28, 2018 by renholding

I’m so glad to be back home here in New York. It’s an incredible honor to be speaking after Mayor Bloomberg today. And I’m sure the Mayor will be pleased to know that I plan to return and speak in

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SEC Investor Advocate Discusses Mandatory Arbitration as Illusory Remedy for Shareholders

By Rick A. Fleming February 27, 2018 by renholding

Today [February 24, 2018] is a special day for the [Securities and Exchange Commission’s] Office of the Investor Advocate.[1] I started this job four years ago today, and because I am the first Investor Advocate that is also the …

Perpetual Dual-Class Stock: The Case Against Corporate Royalty

By Robert J. Jackson, Jr. February 16, 2018 by renholding

My first few weeks at the Securities and Exchange Commission have been a whirlwind—and just to be clear, I am not talking about the markets.[1] In a few short weeks, I have gotten a crash course on SEC policymaking—and

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