Showing archive for: “Financial Regulation”
The costs and benefits of hedge fund disclosure
The WSJ reports on proposed rules forcing hedge funds to disclose confidential proprietary information: Under current rules, many managers are required each quarter to publicly disclose their long equity positions in public securities. The proposed rules would require a much greater level of disclosure to regulators about trading positions, counterparties, liquidity, leverage and performance. * ... The costs and benefits of hedge fund disclosure
Airgas and shareholder value
Bebchuk, Cohen and Wang have posted Staggered Boards and the Wealth of Shareholders: Evidence from a Natural Experiment. Here’s the abstract: While staggered boards are known to be negatively correlated with firm valuation, such association might be due to staggered boards either bringing about lower firm value or merely being the product of the tendency ... Airgas and shareholder value
Delaware uncorporate law evolves an escape from Dodd-Frank
It’s been interesting to watch uncorporations (particularly LLCs and limited partnerships) evolve over the last twenty years or so. Perhaps the most interesting aspect of this evolution is what’s been happening in Delaware regarding contracting over fiduciary duties. This is particularly intriguing because it concerns a key area of difference between corporations and uncorporations — ... Delaware uncorporate law evolves an escape from Dodd-Frank
The SEC recommends broker-dealer fiduciary duties
The SEC staff, acting under Dodd-Frank §913(g), has decided to recommend a “uniform fiduciary standard” for broker-dealers and investment advisors who provide investment advice to retail customers. The recommended rules would provide that the standard of conduct for all brokers, dealers, and investment advisers, when providing personalized investment advice about securities to retail customers (and ... The SEC recommends broker-dealer fiduciary duties
More on the First Amendment and proxy access
The ramifications of the Supreme Court’s decision in Citizens United promise to play out for quite awhile, particularly including its effect on corporate governance. For example, will corporate decision-making that produces corporate speech be exempt from the First Amendment? And how does the First Amendment apply to securities law limitations on what corporations can say ... More on the First Amendment and proxy access
Goldman and the problem with incentive compensation
We have heard a lot about the need to give investment bankers skin in the game to constrain the kinds of counterproductive risk-taking that led to the meltdown. The NYT describes a firm that has been doing that — Goldman Sachs. Unlike other Wall Street firms, Goldman retained a partnership system when it became a ... Goldman and the problem with incentive compensation
Lawsuit loans
Last week I discussed my new paper with Kobayashi, Law’s Information Revolution, which discusses how law’s traditional business of lawyers conveying legal expertise via advice to individual clients “is being challenged by the sale of legal information to impersonal product and capital markets.” Today’s NYT discusses an aspect of this market — advancing money to ... Lawsuit loans
The FTC and Debarment as an Antitrust Sanction
As a result of the FTC’s “Operation Short Change,” a number of firms and individuals have settled claims that they swindled millions from consumers by making unauthorized charges and debits to their bank accounts. The FTC press release highlights that, in addition to a $2.08 million fine (judgment suspended due to bankruptcy filing), the FTC ... The FTC and Debarment as an Antitrust Sanction
Fencing Fiduciary Duties
Several years ago I wrote up my theory of fiduciary duties in an inaptly titled paper, Are Partners Fiduciaries? My basic point was that fiduciary duties are and should be narrowly applied, as befits a strict standard that transcends general norms of commercial behavior. Since then I’ve been trying to get across the notion that, ... Fencing Fiduciary Duties
Is The Dodd-Frank Wall Street Reform & Consumer Protection Act of 2010 Constitutional?
C. Boyden Gray and John Shu offer a very helpful discussion on this issue in an article in Engage. Here is the abstract: President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank” or “the Act”) into law on July 21, 2010. The massive and complex Act is reportedly the ... Is The Dodd-Frank Wall Street Reform & Consumer Protection Act of 2010 Constitutional?
What happened to IPOs?
So Facebook finally had its public offering. But it didn’t look like your father’s IPO. Instead, Facebook sold $500 million in stock to one person. The stock will be held by a single special purpose vehicle so Facebook avoids going over the 500-investor-limit for avoiding the disclosure obligations of a public company. Wealthy investors get to ... What happened to IPOs?
The First Amendment, the securities laws and hedge funds
I have been writing for some time about the First Amendment and the securities laws. In a nutshell, the formerly inviolate notion that the securities laws are a First-Amendment-free zone has always been constitutionally questionable. The questions multiply with the expansion of the securities laws. The Supreme Court’s recent broad endorsement of the application of the ... The First Amendment, the securities laws and hedge funds
