Showing archive for: “Corporate Governance”
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 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
Congress jerks the SEC’s leash
Last week I argued that the SEC’s considering relaxing the rule requiring 1934 act registration of stock classes with more than 499 shareholders was not what it seemed. I noted that while this might look like a move toward liberalization by permitting more Facebook-style markets, it actually furthered a trend toward closing US securities markets ... Congress jerks the SEC’s leash
Opening the US securities markets
Larry makes a strong argument below for why the proposed SEC rules changes reported today in the WSJ should not be heralded as some great opening up of US securities markets, but that the changes are little more than political posturing to prevent addressing the real problem of the costs imposed by securities regulation more ... Opening the US securities markets
Closing the US securities markets
The WSJ reports that the SEC is considering raising the 500-shareholder limit on the number of holders of a class of securities a company can have before having to register that security with the Commission under Section 12(g) of the 1934 Act. The SEC reportedly is also considering relaxing the “general solicitation” restriction on private ... Closing the US securities markets
Corporate governance, incentive compensation and the uncorporation
Acharya, Gabarro and Volpin’s Competition for Managers, Corporate Governance and Incentive Compensation has interesting insights and data on both corporate governance and executive compensation debates. In the final analysis, I think it’s most interesting for what it says about the uncorporation. Here’s the abstract: We propose a model in which firms use corporate governance as ... Corporate governance, incentive compensation and the uncorporation
Why not more securities disclosure?
Steve Davidoff discusses materiality issues in the GS Abacus transaction, Gupta/Galleon, Apple and Jobs’ health and Sokol. He questions “quirky” American securities laws that don’t require continuous disclosure of material information, and a materiality standard which “allows lawyers and others to argue that something is not material because they didn’t think it was certain or ... Why not more securities disclosure?
When markets let corporations be good
In my article, Accountability and Responsibility in Corporate Governance, I explored the complex relationship between social responsibility and markets. I noted among other things that social responsibility is a way to sell products, so it’s hard to untangle whether success let’s firms be “good,” or whether “goodness” causes firms to be successful. A new article ... When markets let corporations be good
IPOs going elswhere
A couple of months ago I asked “what happened to IPOs.” I noted then that the decline in US IPOs had something to do with US regulation, including SOX and Dodd-Frank. A new paper by Doidge, Karolyi & Stulz, The U.S. Left Behind: The Rise of IPO Activity Around the World suggests it has something ... IPOs going elswhere
Posner on corporate fiduciary duties
Francis Pileggi brings news of an interesting Posner opinion in CDX Liquidating Trust v. Venrock Associates, (7th Cir. March 29, 2011), a case decided under Delaware law. As Mr. Pileggi notes, the case held, among other things, that disclosure of a conflict of a director’s interest may “insulate the agreement from attack, but does not, per ... Posner on corporate fiduciary duties
