Insider trading: Bainbridge responds
Yesterday in criticizing a federal crackdown on insider trading I noted that “[a]ll of this theater can’t hide the dubious public policy underlying these prosecutions. Insider trading is, at worst, a breach of fiduciary duty which, like other such breaches, can be dealt with under state law.” Steve Bainbridge, an expert on insider trading, responds: I ... Insider trading: Bainbridge responds
The return of Rudy G
The WSJ has breathlessly reported: Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders, and analysts across the nation, according to people familiar with the matter. The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any ... The return of Rudy G
The SEC slams venture capital
Dodd-Frank imposed registration requirements on advisors of hedge funds. The act exempted venture capital funds but left it to the SEC to define these funds. The SEC has now proposed a definition as part of new rules implementing Dodd-Frank’s hedge fund provisions. According to the SEC’s press release, a venture capital fund is a private ... The SEC slams venture capital
More backdating detritus
I’ve written (e.g.) about the misguided criminal prosecutions spawned by the backdating so-called scandal. WSJ’s Holman Jenkins, who has been on the story from the beginning, echoes these sentiments, emphasizing the real scandal of the prosecutorial misconduct spawned by backdating: it’s . . . hard not to see the self-interested ethics of the plaintiff’s bar ... More backdating detritus
Close corporation remedies and the evolution of the closely held firm
As previously discussed, I attended and presented a paper at an interesting symposium on the famous close corporation case, Wilkes v. Springside. Now the paper is available. Here’s the abstract: Close Corporation Remedies and the Evolution of the Closely Held Firm This paper examines the law of closely held firms from an evolutionary perspective. The ... Close corporation remedies and the evolution of the closely held firm
Arbitration and preemption
Ok, so here’s the deal. AT&T sells two cellular phones for nothing with a two-year contract term, and then charges $30.22 in sales tax. Customers complain about the sales tax. The contract provides for individual arbitration where the customer resides. AT & T will pay double attorneys fees and $7,500 if the arbitrator awards the ... Arbitration and preemption
An epitaph for backdating
Peter Lattman reports on the Karatz case as an epitaph for the whole backdating so-called scandal: “These prosecutions went out with a whimper rather than a bang,” said Christopher J. Clark, a criminal defense lawyer at Dewey LeBoeuf who has done work on backdating cases. “With few convictions and no substantial sentences, juries and the ... An epitaph for backdating
Justice for a backdater
Two days ago I discussed the sentencing of KB Home’s Bruce Karatz, where the court was weighing the Probation Office’s recommendation of home detention against the U.S. Attorney’s 6.5 year jail sentence recommendation. I noted the argument that was being made that “swindlers shouldn’t be treated better than dope dealers,” and responded “Injustice to drug dealers doesn’t justify ... Justice for a backdater
Citizens United: Friday at Georgia State
I’ll be talking about the Citizens United case Friday at a Georgia State University College of Law symposium. Speakers also include Gene Nichol (UNC), Richard Briffault (Columbia), Joel Gora (Brooklyn), Heather Gerken (Yale), Jamie Raskin (American), Richard Hasen (Loyola), and Michael Boos, (GC Citizens United). You can get a pretty good idea here of my ... Citizens United: Friday at Georgia State
Jail time for backdaters
I’ve blogged fairly extensively about backdating, including serious questions about whether and when it was wrong at all, and even more serious questions about whether it should be criminalized. Among the specific issues are whether any misrepresentations were material to investors. And then there’s the epidemic of prosecutorial misconduct that has occurred in these cases. ... Jail time for backdaters
Meet the new doctor’s office: the hospital
The WSJ reports that doctors increasingly working for hospitals, which are becoming “consolidated health-care providers,” rather than for themselves. Doctors don’t want to have the burdens of ownership, and hospitals want to lock in customers for their expensive facilities. While doctors are reconfiguring into medical technology intermediaries, lawyers are clinging to their age-old model of ... Meet the new doctor’s office: the hospital
Creditor derivative suits in Delaware LLCs
The ever-helpful Francis Pileggi thoroughly discusses an interesting and important recent Delaware opinion by VC Laster, CML V, LLC v. Bax, C.A. No. 5373-VCL (Del.Ch. Nov. 3, 2010) which holds a creditor lacks standing under the Delaware LLC act to sue an insolvent LLC derivatively. The following builds on Mr. Pileggi’s excellent analysis. The court interpreted ... Creditor derivative suits in Delaware LLCs
