The Galleon prosecution: hoist by its own petard?
Dave Zaring asks whether the Rajaratnam trial, now doomed by a sick juror to start deliberations all over again, is headed for a hung jury. Dave suspects the jury is more likely hung 11-1 to convict than vice versa. But there’s another possibility: there are a lot of charges in this cases which occupy a ... The Galleon prosecution: hoist by its own petard?
Say on pay at the SEC?
Reuters reports on Henry Hu’s somewhat controversial tenure heading the SEC’s new Division of Risk, Strategy and Financial Innovation. The SEC brought in Hu, a widely recognized expert on financial regulation, in response to its embarrassing Madoff failure. The Reuters article discusses some reservations about how much Hu accomplished, but I want to focus on ... Say on pay at the SEC?
Prosecutorial liability and prosecuting corporate agents
Retired Justice Stevens has some interesting comments on Connick v. Thompson, reported here. Connick, by a 5-4 conservative/liberal vote, reversed the Fifth Circuit’s affirmance of a $14 million verdict to a man imprisoned on death row for 14 years after prosecutors failed to turn over exonerating evidence. The Court held that you need a pattern ... Prosecutorial liability and prosecuting corporate agents
Jets and LBOs
I have written about the disciplinary effect of the uncorporate form, particularly in LBOs. See, e.g., here and Chapter 8 of my Rise of the Uncorporation. Now here’s more evidence: Edgerton, Agency Problems in Public Firms: Evidence from Corporate Jets in Leveraged Buyouts. Here’s the abstract: This paper uses rich, new data to examine the ... Jets and LBOs
Arbitration, preemption and regulatory coordination
AT&T Mobility LLC v. Concepcion, 2011 WL 1561956 (April 27, 2011) could end up being one of the most important pro-business cases of the last several years — even more important than Citizens United. The case involved the application of Section 2 of the Federal Arbitration Act (9 U.S.C. §2), which makes agreements to arbitrate ... Arbitration, preemption and regulatory coordination
Making a mountain out of the insider trading molehill
Jon Macey insightfully wrote in the WSJ that the Galleon case illustrates the need to distinguish “trading on the basis of information that was legitimately ferreted out from trading on the basis of information that has been wrongfully obtained through fraud or theft.” Macey notes that the SEC’s refusal to clarify the distinction between the ... Making a mountain out of the insider trading molehill
Chandler’s departure and the future of uncorporations
Chancellor Chandler has announced his retirement as Delaware’s leading corporate trial judge (Pileggi and the WSJ). News reports likely will focus on the Chancellor’s work on high-visibility corporate cases. But I think he made his most lasting mark in helping create a modern jurisprudence for sophisticated LLCs and limited partnerships. Delaware statutory law laid the ... Chandler’s departure and the future of uncorporations
The death of the billable hour?
Jay Shepherd writing on ATL thinks the billable hour is “a dying business model. . . because it focuses on selling the wrong thing. * * * [N]o client in the history of the planet has ever wanted to buy time. * * * It’s what you can do for them during that time.” Shepherd ... The death of the billable hour?
Into Eternity
One of the ways I celebrated my birthday yesterday in Chicago was seeing a movie in the afternoon(!) at the Siskel Center. The film is Into Eternity. Here’s the setup: Finland has nuclear waste which can be dangerous to humans for 100,000 years. So they’ve decided to bury in a way that it will ... Into Eternity
The myth of government protection of financial markets
With all the calls for more government supervision of financial markets it’s healthy to keep in mind what the public actually gets from this costly supervision. In many previous posts (e.g., here, here and here) I summarized the SEC’s egregious incompetence in missing the Madoff fraud. When private firms mess up they get sued and punished ... The myth of government protection of financial markets
The state law claim against Sokol
Steve Bainbridge discusses a Delaware chancery suit by a Berkshire-Hathaway shareholder against former B-H executive David Sokol for profits he earned by buying Lubrizol stock ahead of his former employer. Steve analyzes state law, concluding I am unaware of any Delaware precedent holding that a state law cause of action for breach of fiduciary duty ... The state law claim against Sokol
Morgenson tries to rally a posse
Tom Kirkendall rightly criticizes a Gretchen Morgenson “newsitorial” in the NYT on the absence of criminal prosecutions from the financial meltdown. Even pairing Morgenson with a real reporter can’t hide the true nature of this diatribe, which picks up where Inside Job’s Charles Ferguson left off on Oscar night. Morgenson’s screed even trots out quotes ... Morgenson tries to rally a posse
