Proposed corporate mergers often receive heavy amounts of investor scrutiny. The proposed Tesla-SolarCity is no exception. The stock price of both entities have fallen since the proposed merger was announced on July 31, 2016, and numerous lawsuits have been filed alleging that Tesla’s Board of Directors violated fiduciary duties to their shareholders.[1] While it is common for the acquiring company’s (Tesla) stock to fall when acquiring a company, it is more rare for the target company’s (SolarCity) stock price to fall.[2] This anomaly indicates that investors are skeptical about the merger. Some individual investor skepticism is caused by the large…
Author: ONLINE MANAGING EDITOR
A popular tool used to prosecute Bitcoin business operators is 18 U.S.C. § 1960, the Federal prohibition against operating an unlicensed money transmitting business. Bitcoin is at the forefront of the electronic currency market. With over 10 billion USD in market cap, there is now a significant amount of “real” money invested into this virtual currency. Though Bitcoin has survived its early stages in the investment market, the legal framework in which Bitcoin lives has been slow to solidify. Along with the nascent and complicated regulatory framework on both the Federal and State level, Bitcoin business operators are now being…
In the last five years courts have rendered more decisions concerning the Investment Company Act of 1940, 15 U.S.C. §80a-1 (the “ICA”), than in the previous twenty years of mutual fund litigation.[1] Many of the recent lawsuits have focused on one particular section of the ICA, Section 36(b), which concerns actions for breach of fiduciary duty with respect to receipt of compensation in connection with excessive fees.[2] This particular section of the ICA provides one of the only avenues for plaintiffs to file a private right of action. Moreover, the burden of proof on such plaintiffs remains very high under…
Chinese investment into the U.S. has been increasing rapidly in recent years. 2013 was a landmark year, in which Chinese outbound direct investment exceeded U.S. investment into China for the first time.[1] By 2015, Chinese investors had sourced $350 billion into U.S. commercial and residential properties and investments.[2] Indeed, real estate is the U.S. business sector that has attracted the most Chinese investment by far.[3] A report by the Asia Society and Rosen Consulting group predicts that Chinese direct investment into existing U.S. commercial and residential real estate will reach $218 billion in the next five years and will accelerate…
Private prisoner operators rely on government contracts for a proportion of their revenue. Recent government policy changes threaten the stability of private prisoner operators’ revenue. On August 17, 2016, the United States Justice Department announced that the Bureau of Prisons would phase out the use of privately run prisons. Deputy Attorney General Sally Yates announced this policy change in a memo that instructs Bureau of Prison officials to decline to renew the contracts of private prison operators or to “substantially reduce its scope in a manner consistent with law.” Yates continued to explain that this…
Should conflicted merger transactions be subject to different standards of review simply because the mergers have been structured differently? The answer is evident if we examine the balance of control between a corporation’s shareholders and its board of directors in this context. My Note addresses the varying standards of review that currently exist for analyzing conflicted mergers, and calls for their unification. Companies merge for a variety of reasons: when they expect increased profits, anticipate a better competitive position, or simply wish to diversify their products and services. The myriad methods of negotiating these merger transactions help to maximize the…
Cellular phone forensics company Cellebrite recently gained national notoriety for its rumored assistance in cracking the password of an iPhone related to the San Bernardino murders. What many practitioners don’t know is that the FBI, DOJ and the SEC have been using Cellebrite’s forensic cell-phone cracking tools for years. While the use of its products to get past passcodes might have garnered more public acclaim, one of the other less well known features is its ability to speedily uncover information that might have been previously unrecoverable, including deleted data and text messages. A. The Text of Texts Are Often Only…
The Fifteenth Annual Albert A. DeStefano Lecture on Corporate, Securities & Financial Law WELCOME AND INTRODUCTORY REMARKS Sean Griffith Fordham University School of Law PANEL: FEE-SHIFTING IN SHAREHOLDER LITIGATION Frederick H. Alexander Morris, Nichols, Arsht & Tunnell LLP Chris Cernich Institutional Shareholder Services Mark Lebovitch Bernstein Litowitz Berger & Grossman LLP Norman M. Monhait Rosenthal, Monhait & Goddess, P.A. Andrew J. Pincus Mayer Brown LLP To download a full PDF of this article, click here.
Publicly-traded companies have the power to pass sunlight bylaws to address hedge fund activism. Sunlight bylaws would require activist hedge funds to publicly disclose any strategic proposals and their financial interests in companies earlier and at thresholds lower than current securities laws. Sunlight bylaws would also require disclosure of additional information, including: (1) the percentage of the fund’s portfolio invested in the company; (2) the fund manager’s compensation; (3) the fund manager’s investment in the fund; (4) the fund’s portfolio turnover; and (5) the fund’s prior holding periods after any announcements of an ownership interest and a strategic proposal. Academic proponents of hedge fund activism defend activism based on the theory…