Abstract The recent enactment of Regulation A+ makes it possible for the first time for companies to conduct retail equity crowdfunding (i.e., equity crowdfunding campaigns involving general solicitation of unaccredited investors). On its surface, Regulation A+ seems poised to provide dual benefits to start-ups by both democratizing access to capital and easing the transition into public company status. However, Regulation A+ is largely a solution in search of a problem. There is little empirical evidence of an equity gap for early stage companies, nor is there evidence that the recent dip in small-company IPOs has anything to do with regulatory…
Author: ONLINE MANAGING EDITOR
Abstract While women have expanded their footprint in corporate America in recent years, they are still underrepresented in the upper echelons of corporate governance, specifically in boardrooms, which dictate the direction of a company. At the current rate, it will take more than four decades before women’s representation on corporate boards reaches parity with that of men. Women face obstacles that make it difficult to rise in the ranks of corporate America. This can be attributed to numerous factors that collectively burden women with expectations that are at odds with success. These factors include low representation of women in traditional…
Abstract Blockchains are publicly viewable and theoretically unalterable records of bitcoin transactions. They are thus crucial to the functionality of cryptocurrencies. Through the blockchain, bitcoin algorithmically decentralizes the maintenance of the transaction ledger and delegates the task to users on its network. Blockchain technology shows promise beyond cryptocurrency: banking and financial institutions have established partnerships with fintech firms to explore the applicability of blockchains in capital markets. Blockchains, used in conjunction with self-executing smartcontracts, present particularly compelling opportunities in derivatives markets, which are typically beset by numerous intermediaries. The blockchain could radically reinvent the existing market infrastructure. Certain intermediaries like…
After infamous cyber-attacks on Target, Home Depot and Anthem, states became painfully aware that federal regulations are insufficient to protect consumers and institutions against cyber threats. The states are trying to fill in the gaps. On March 1st New York launched new cybersecurity regulations for banking and insurance sectors.[1] The goal is to protect consumers and institutions against data breaches, identity theft, and service disruption. New York is ahead of other states and the new regulation is believed to be the most comprehensive to date.[2] Other states are believed to soon follow suit, using New York regulations as a model.…
Short-termism has been and continues to be a worsening problem in the corporate arena. More often than not corporations submit to shareholder pressures acting impulsively to secure profits today, instead of rationally planning a stable, long-term growth and value strategy.[1] The existence of hedge fund activism seems to compound short-termism due to its structure of maximizing profits in the here and now.[2] When reading the Yahoo! case study it became apparent that this struggling corporation was propped up on toothpicks falling victim to hedge fund activism orchestrated by Third Point’s founder and CEO Daniel Loeb.[3] Ever since Yahoo!’s fall from…
Despite all of the large scale hacks and cyber related headlines, cyber security litigation itself remains in its infancy. Case law is sparse, and policy language is slowly beginning to adapt itself to modern risk. In the interim, the c-suite is being confronted with constantly increasing regulatory requirements and new cyber exposures that threaten to test their abilities to remain in compliance – from breach notification laws, to social media related regulation FD violations and more. It goes without saying that the cyber risk environment has changed everything. Most companies are aware of the importance of separate cyber insurance, however…
Buying on bad news is a strategy commonly employed by savvy investors. The trick is to understand whether the problem is acute or will affect a company in the long term. A timely example of investors buying up stock on bad news is the market reaction to video dissemination of a passenger forcibly ejected from a United Airlines flight. On Monday, April 10th, the day after the public relations gaffe, United Continental Holdings closed up nearly 1%.[1] “It’s not entirely true that investors didn’t care about the incident,” according to Fortune. “United stock dipped as much as 2.5% in pre-market…
On February 6, 2017, Fordham University School of Law’s Corporate Law Center, in partnership with NERA Economic Consulting, hosted its 5th Annual Fred Dunbar Memorial Lecture in Law and Economics. This year’s lecture entitled “Cultures of Compliance” was delivered by Donald C. Langevoort, Thomas Aquinas Reynolds Professor of Law at Georgetown Law. Professor Langevoort lectured on the pillars of cultivating a positive and sustainable culture of compliance in today’s corporate structure and underscored how both behavioral sciences and economics might help us better understand the issues faced by corporate compliance. Also, Professor Langevoort evaluated what a “culture of compliance” actually…
Abstract While developments in the law of insider trading usually attract significant scholarly interest, far less attention has been paid to the design and effects of the Securities and Exchange Commission’s complementary Regulation Fair Disclosure. Yet, this Article argues that the SEC’s current quandaries relating to insider trading enforcement are largely self-inflicted and could have been avoided if it had better aligned its Reg. FD with the Supreme Court’s insider trading jurisprudence. Introduced sixteen years ago to prevent senior officers of public firms from leaking material information to preferred investors and financial analysts, Reg. FD was designed to function as…
Abstract Mergers are structured in a variety of ways, in keeping with the underlying purpose of the transaction. While this structural flexibility is beneficial from a financial standpoint, it has resulted in varied interpretations of the case law surrounding the standards of review that govern conflicted merger transactions. Where there is no apparent conflict of interest between the board of directors of a corporation and the corporation’s shareholders, the courts have traditionally accorded the board deference under the lenient business judgment rule. On the other hand, where there is a direct conflict of interest, the board is required to show…