Corporate & Securities Law

Minority Shareholder Voice

Posted on January 05, 2009
Benjamin Means relies on “Albert Hirschman?s classic insight that exit and voice are interrelated mechanisms” to argue that: Because minority shareholder oppression is made possible by the normal features of the close corporation ? majority control, locked investment ? courts face the difficult task of adjusting the relationship of shareholders to remedy oppression without thereby...

First Day Blues

Posted on January 05, 2009
I love teaching, but I’m almost always in a bit of a funk the first few days of the spring semester. Maybe because we start so early here at UCLA. Who knows? But relief may be at hand: The end of the holidays, cold weather and economic gloom will make today one of the most stressful days of the year for returning to work...

Madoff: Was the SEC Negligent? Liable?

Posted on December 23, 2008
The WSJ reports: A New York woman who lost nearly $2 million investing with Bernard Madoff has filed a claim against the Securities and Exchange Commission alleging the agency was negligent in failing to detect an alleged decades-long fraud. ... Last week, SEC Chairman Christopher Cox admitted that the SEC’s examination staff had missed red flags over the years...

Why not a MBCA or DGCL version of UPA (1997) 103(b)?

Posted on December 09, 2008
A Business Associations student asked a very perceptive question today: Why don’t the Delaware General Corporation Law and the Model Business Corporation Act have a provision equivalent to UPA (1997) section 103(b)? To be sure, the close corporation shareholder agreement sections of the corporate statutes do some of the lifting done by 103(b) in the partnership code, but not all of...

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Why the emerging auto bailout sucks

Posted on December 08, 2008
AP report: A bailout plan for the failing U.S. auto industry could include a Cabinet-level oversight board and a provision to withdraw the money if the overseers decide the companies are failing to take steps to overhaul themselves. The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles...

Misunderstanding Deregulation

Posted on December 03, 2008
Henry Manne sent along this email, which I thought worth passing along: Tyler Cowen recommended a blogger who said: ?Back in April 2004 the SEC voted to loosen the capital rules for the five biggest Wall Street investment banks. In retrospect, this was a very bad idea indeed, and it was a bad idea for precisely the reasons that have caused our financial problems to become so dire: it allowed...

Vote for PB.com

Posted on December 01, 2008
I’ve been nominated as having one of the top law professor blogs by the ABA Journal: This site is home to UCLA law professor Stephen Bainbridge’s three blogs devoted to law and business, wine and food, and punditry—the latter located appropriately on the right side of the page...

Transactional Engineers or Entomologists

Posted on December 01, 2008
Jeff Lipshaw has posted a really fun and thoughtful paper, entitled Beetles, Frogs, and Lawyers: The Scientific Demarcation Problem in the Gilson Theory of Value Creation: Recently, Ronald Gilson described a transactional lawyer turned law professor as someone who was a beetle, but became an entomologist...

Time and Me on the Mark Cuban Insider Trading Case

Posted on November 25, 2008
There is an excellent post on Time.com addressing the legal issues in the SEC’s insider trading case against Dallas Mavericks owner Mark Cuban. I spoke to the reporter at some length and was really impressed with her concern for getting it right, which is reflected in the care and craftsmanship in the article...

FT and me on the Cuban Case

Posted on November 25, 2008
Financial Times: Litigation experts have exposed weaknesses in the Securities and Exchange Commission?s insider trading case against billionaire investor Mark Cuban, saying current securities laws are ambiguous about whether he would be considered an insider...

Federalist Society Program on the SEC and the Financial Crisis

Posted on November 21, 2008
I am in Washington DC for the Federalist Society National Lawyers Convention. Tomorrow, Saturday, Nov. 22, I’m moderating the Federalist Society Corporations Practice Group Program on the Role of the SEC in the Financial Services Crisis, which will be held from 10:45 AM to 12:15 PM in the State Room at the Mayflower Hotel...

Stoneridge and the Supreme Court?s Dubious Track Record in Securities Cases

Posted on November 19, 2008
I recently ran across a very nice article by Professor Rodney Chrisman on the Stoneridge case, 26 QLR 839, in which he was kind enough to bring to bear a point I made about O’Hagan and extend it to Stoneridge: Commentators describe the Court’s opinion in O’Hagan with varying degrees of criticism...

Reflections on Two Decades in this Business

Posted on November 19, 2008
My essay Reflections on Twenty Years of Law Teaching is now up on the UCLA Law Review website. The abstract follows: On April 16, 2008, the author received the UCLA School of Law’s Rutter Award for Excellence in Teaching. This Essay consists of a revised and extended version of the remarks he gave on that occasion...

The Insider Trading Charges Against Mark Cuban

Posted on November 17, 2008
The SEC today announced that: The Securities and Exchange Commission today charged Dallas entrepreneur Mark Cuban with insider trading for selling 600,000 shares of the stock of an Internet search engine company on the basis of material, non-public information concerning an impending stock offering...

Corporate Law 2nd Edition

Posted on November 12, 2008
The author’s copies of the second edition of my corporate law text arrived today. It’s half the length of the first edition and much more focused on doctrine than theory. It’s also been brought into the Concepts and Insights Series. Kindly consider recommending it to your students in Business Associations or Corporation law courses...

Rethinking Corporate Opportunities

Posted on November 09, 2008
My essay Rethinking Delaware’s Corporate Opportunity Doctrine. It’s a short essay that will be published in the next issue of Engage and, as such, relies almost exclusively on primary sources. No offense intended to the many others who have written on this subject! Abstract: Although the prohibition on taking of organizational opportunities is well established, the standards...

Second edition of my M&A Text

Posted on November 06, 2008
The second edition of my Mergers and Acquisitions treatise (now part of the Concepts & Insights series) is hot off the presses. Faculty teaching courses in corporate law, M&A, corporate finance, and the like can get complimentary review copies from Foundation...

E-reprints

Posted on November 03, 2008
In order to save the odd tree or two, I’ve decided to move my reprint mailing lists into the electronic age. henceforth, no paper reprint mass mailings. Instead, mass electronic mailings of PDF files of completed articles as they were published (I generally don’t post final versions to SSRN)...

E-reprints

Posted on November 03, 2008
In order to save the odd tree or two, I???ve decided to move my reprint mailing lists into the electronic age. henceforth, no paper reprint mass mailings. Instead, mass electronic mailings of PDF files of completed articles as they were published (I generally don’t post final versions to SSRN)...

The Future of Say on Pay

Posted on October 31, 2008
Katayun I. Jaffari and Mu’min Islam: For more than a decade, determining the appropriate level of compensation for corporate executives has been a controversial issue within the courtroom, the boardroom and among shareholders. During a period of increased activism by shareholders, more authority, commonly referred to as “say on pay,” is being demanded over executive...

Responses and Reactions to ?Minorities, Shareholder and Otherwise? by Anupam Chander

Posted on October 29, 2008
The Yale Law Journal Pocket Part has published a collection of responses to Anupam Chander’s article, Minorities, Shareholder and Otherwise: Comparing Corporate and Constitutional Minority Protections, including one by yours truly. In There Is No Affirmative Action for Minorities, Shareholder and Otherwise, in Corporate Law, 118 Yale L...

UC Irvine Law? Top 20?

Posted on October 23, 2008
National Law Journal: UC Irvine School of Law, which began accepting applications for enrollment a month ago, plans to offer full tuition scholarships to its first class, which is anticipated to be about 60 students, said Charles Cannon, assistant dean of development and external affairs at the law school...

Turning Bad Faith into Full Employment for Lawyers

Posted on October 23, 2008
Edward M. McNally and Patricia A. Winston have posted an article seeking to give content to the emergent Delaware concept of “bad faith” director conduct. It’s worth reading. Setting aside the merits of their definitional efforts, however...

UCLA Law is # 1

Posted on October 21, 2008
In producing quality law porn. And we’re not even based in SFV. [continued on site]

Teaching Torts via John Edwards

Posted on October 21, 2008
Eric Johnson: I have tried to expand my syllabus beyond the traditional slate of federal and state appellate opinions. Yesterday, I had a tremendously energetic class based on a case reading that wasn’t a judicial opinion at all. Our reading was a personal-injury attorney’s first-person narrative of Howard v...

Remarks on Shareholder Activism for the UCLA Business Law Breakfast

Posted on October 21, 2008
Remarks on Shareholder Activism for the UCLA Business Law Breakfast Let me add my welcome. In recent years, UCLA law school has redoubled its efforts in business law and this program is a good example of how committed we are to this field of study...

Running Corporations in Dangerous Times

Posted on October 14, 2008
Those of us who teach corporate law rarely, if ever, have occasion to talk about issues like terrorism, kidnapping, and the like. In the real world, however, the people who run corporations--especially multinationals doing business in dangerous parts of the world--have to think about these issues all the time...

Governance and Financial Results in a Time of Crisis

Posted on October 13, 2008
The shareholder activist crowd would like you to believe that good corporate governance practices, as defined by people like Lucian Bebchuk and ISS, are correlated with positive financial results. Jeff Lipshaw is a self-admitted skeptic: Back when I was fighting the governance wars from the inside, arguing from the board’s standpoint why having poison pills and classified boards made...

Government Investments in Banks

Posted on October 13, 2008
Should the government bank bailout take the form of direct equity investment? David Skeel identifies two very serious concerns with such proposals: One is the obvious risk that government ownership would distort the decision making of both the government and the banks going forward...

Minority Shareholders

Posted on October 09, 2008
My essay There is No Affirmative Action for Minorities, Shareholder and Otherwise, in Corporate Law has been posted to SSRN. Abstract: I review and comment herein on Anupam Chander’s article, Minorities, Shareholder and Otherwise, 113 Yale L.J...

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