Corporate & Securities Law

Stuntz and Skeel Launch New Blawg

Posted on February 28, 2008
David Skeel and Bill Stuntz have started a new blog called Less than the Least: We are both law professors and evangelical Protestants – a weird combination in our time. We hope it’s also an interesting combination. We plan to write about the things that interest us, professionally and personally: crime and criminal justice (Stuntz), corporate governance, credit, and bankruptcy (Skeel), the...

The Elasticity of Demand for Legal Services

Posted on February 28, 2008
Dan Slater: Who underwrites associate salary bumps? The firms, or their clients? It’s the question grappled with today in an item from The Recorder. Guy Halgren, the chairman of Sheppard, Mullin, Richter & Hampton, said: “The fact is that we only passed on much less than half of the associate salary increases onto the clients, and the partners have absorbed more...

A Strong Smith v Van Gorkom Claim

Posted on February 27, 2008
I’m writing an essay on Smith v. Van Gorkom for one of those law stories books. In the course of doing so, I’ve concluded that Smith v. Van Gorkom was the most important corporate law decision of the 20th century.  The supreme court of a state widely criticized for allegedly leading the race to the bottom held that directors who make an uninformed decision face substantial...

Judicial Recusals Due to Stock Ownership

Posted on February 27, 2008
My friend and colleague Eugene Volokh notes: The L.A. Times reports that the Exxon Valdez punitive damages case might yield a 4-4 division—with no precedent being set, and the lower court decision being affirmed—because “Justice Samuel A...

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Regulatory Competition in Corporate Law

Posted on February 26, 2008
In a very important 1997 paper, The Political Economy of Competition for Corporate Charters, William Carney argued that: Costly rent extractions in corporate laws by interest groups, beyond those attainable through market transactions, raise costs for firms and lower returns for shareholders...

SSRN Hacked

Posted on February 26, 2008
David Zarig: My colleague Andrea Matwyshyn noticed that a couple of her papers up on SSRN had been retagged as published during the EFMA 2003 Helsinki Meetings.  So has one of mine.  So has one of Gordon’s.  So, as of this writing, has one of Bernard Black’s...

The Iconic Insider Trading Cases

Posted on February 26, 2008
I’ve posted to SSRN an essay entitled The Iconic Insider Trading Cases: This essay traces the evolution of insider trading jurisprudence, focusing on the three iconic Supreme Court decisions: Chiarella, Dirks, and O’Hagan. The essay argues that all three cases were seriously flawed because each failed to cohere as to either policy or doctrine...

Paredes for SEC Commissioner

Posted on February 25, 2008
Larry Ribstein reports that Troy Paredes is being considered for one of the vacancies at the SEC: Paredes is a prolific writer and current co-author on Loss & Seligman. And he has some intriguing ideas about the SEC’s business. ... It would be great if somebody who understands both the causes and possible cures of excessive regulation of financial markets were actually in a position...

Manne on Insider Trading

Posted on February 25, 2008
I have posted to SSRN a short essay entitled Manne on Insider Trading: This essay is the foreword to a forthcoming Liberty Fund collection of Henry Manne’s writings on insider trading. The piece is introductory and descriptive, rather than analytical and normative, providing an overview of Manne’s thought...

Paul Mahoney Named UVA Dean

Posted on February 25, 2008
Congratulations to corporate law scholar Paul Mahoney, who has been named dean of University of Virginia School of Law, my alma mater: Paul G. Mahoney, a University of Virginia law professor, has been appointed the 11th dean of the School of Law, UVA President John T...

Michelle Obama on Our Students

Posted on February 22, 2008
I try to keep politics out of this part of my blog family, but I can’t resist mentioning Michelle Obama’s statement that: “We don’t need a world full of corporate attorneys and hedge-fund managers,” she told a crowd in a Baptist church in Cheraw, S...

Replication

Posted on February 22, 2008
We know that law faculties tend to replicate themselves in hiring. At Yale, however, the faculty apparently also replicate themselves in admissions. [continued on site]

Microsoft?s Bid for Yahoo Sparks Race to Courthouse

Posted on February 22, 2008
Delaware Business Litigation Report: On Monday, February 11th, and Thursday, February 21st, two related class actions were filed in the Court of Chancery against the directors of Yahoo! for breach of fiduciary duties in connection with the offer by Microsoft, made on February 1st, to acquire Yahoo! for $31 per share, a price which reflected a 62 percent premium above the Yahoo! share value at...

Murray Schwartz: RIP

Posted on February 22, 2008
I’m sorry to report that my colleague Murray Schwartz has passed away. Here’s an excerpt from the official announcement: Murray L. Schwartz, the third dean of UCLA School of Law and the David G. Price and Dallas P. Price Professor of Law Emeritus, died Feb...

Johnson to Split Between W&L and St Thomas

Posted on February 21, 2008
Brian Leiter reports that: Lyman Johnson, a corporate law scholar and the Robert O. Bentley Professor of Law at Washington & Lee University, will join the faculty at the University of St. Thomas School of Law (Minnesota) as the Laurence and Jean LeJeune Distinguished Chair in Law...

PreCYdent

Posted on February 20, 2008
I’ve been meaning to link Tom Smith’s PreCydent venture for a while. In an informative interview on the Law Librarian Blog, Smith explains: It occurred to me that if Google worked by mining information in the link structure of the Web, why couldn’t a search engine be built which mined the information latent in the Web of Law? I wrote many emails to mathematicians around the...

Fiduciary Duties of Activist Shareholders

Posted on February 20, 2008
My friends and UCLAW colleagues have posted a paper on Fiduciary Duties for Activist Shareholders. Abstract: Corporate law and scholarship generally assume that public corporations are controlled by professional managers, while shareholders play only a weak and passive role...

We?re # 10: Law Professor Blogs Ranked by Visitors and Page Views

Posted on February 19, 2008
Paul Caron ranks law professor blogs: The following charts list the traffic statistics of the leading blogs edited by law professors.  After looking at various methods of ranking blogs—those that focus on traffic (e.g., Compete), often generated through a particular search engine (e...

Does Using Stolen Information to Trade Generate Insider Trading Liability?

Posted on February 18, 2008
Paul Rose: In Friday’s New York Times, Floyd Norris discusses a case in which a hacker obtained material, non-public information and made $296,456 in trading profits.  Do insider trading laws require him to forfeit the gains?  This situation exists because of a strange anomaly in American securities laws...

Does Caremark Have Teeth?

Posted on February 18, 2008
Francis Pileggi collects recent blogosphere discussion of Caremark and its progeny. [continued on site]

Judicial Review of Board Rejection of a Merger Bid

Posted on February 18, 2008
"In statutory acquisitions, such as mergers or asset sales, the target’s board of directors’ gatekeeping function is established by statute. If the board rejects a proposed transaction, the shareholders are neither invited to, nor entitled to, pass on the merits of that decision...

Employee Board Representation

Posted on February 17, 2008
In my article, Privately Ordered Participatory Management: An Organizational Failures Analysis, I argued that codetermination and similar governance systems that entail employee representation on the board are less effective than the Anglo-American model of shareholder capitalism...

SOX and Going Private

Posted on February 16, 2008
Robert Bartlett’s article Going Private But Staying Public: Reexamining the Effect of Sarbanes-Oxley on Firms’ Going-Private Decisions validates a lot of the recommendations in the chapter on going dark in my SOX text. This article examines whether the cost of complying with the Sarbanes-Oxley Act of 2002 (SOX) contributed to the rise in going-private transactions after its...

Shareholder- versus Director-Centric Governance

Posted on February 15, 2008
John Olson: I’ve been giving some thought to the dust up last year between Marty Lipton and other governance experts as to whether Pfizer’s initiative of having several of its independent directors meet with its largest institutional investors represented a landmark in the decline of director-centric corporate governance, and have also been thinking about what we mean when we talk about...

Green CSR Harms Shareholders

Posted on February 15, 2008
Voluntary Corporate Environmental Initiatives and Shareholder Wealth by Karen Fisher-Vanden and Karin Thorburn: Researchers debate whether environmental investments reduce firm value or can actually improve financial performance. We provide some first evidence on shareholder wealth effects of voluntary corporate environmental initiatives...

Student Evaluations: A Debate

Posted on February 14, 2008
They’re debating student evaluations at Phi Beta Cons. Excerpts follow, but it’d be worth going over and reading the whole thing. ‘Subjecting the Wise to the Scrutiny of the Unwise’ Studies have shown, I say solemnly, that the young faculty, particularly, who are subjected to course evaluations, tend to raise the grades of their courses to avoid untoward comment,”...

Milberg Weiss

Posted on February 14, 2008
The Washington Examiner posts a page entitled Lawyers Gone Wild, which claims to shine “light on a revealing back story from the saga of the Milberg Weiss securities class-action lawsuit kickback scheme.” [continued on site]

Whence Goeth Say on Pay?

Posted on February 14, 2008
Lisa Fairfax provides an update. [continued on site]

Director Standing qua Director to Sue Derivatively

Posted on February 13, 2008
Francis Pileggi alerts us to a new Delaware supreme court decision, Schoon v. Smith, which Pileggi explains held that “a director qua director may not sue fellow directors of a corporation derivatively.” Plieggi links to a commentary by Steven Haas, who opines that: Does a Director Qua Director Have Standing to Sue Derivatively? No, so said the Delaware Supreme Court yesterday in...

Another fun efficient capital markets anomaly

Posted on February 13, 2008
David Gaffen: Regardless of how January turned out, the various indicators that involve some sort of luck and alchemy continue to line up well for U.S. equity markets. First, the Super Bowl indicator turned out better than anyone (save die-hard Giants fans [see Super Bowl anomaly]) expected...

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