July 2018

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I am both a business law professor and an energy law professor, which is sometimes surprising to people. That is, some folks are surprised that have a research focus in two areas that are seemingly very distinct.  In one sense, that’s true, at least in the academic realm.  Most energy law scholars tend to have a focus on more close related disciplines, such as environmental law, administrative law, and property law.  And business law scholars tend to trend toward things like commercial law, bankruptcy, tax, and contracts.  

There is substantial overlap, though, in the energy and business law spaces, as I have noted on this blog before. I am even working on some research that looks specifically at the role laws and regulations have on business and economic development.   My work with the WVU Center for Innovation in Gas Research and Utilization builds on this energy and business nexus. 

I am pleased to share a newly published article I wrote with Amy Stein from the University of Florida’s Levin College of Law. The piece is called Decarbonizing Light-Duty Vehicles, and it appears in the July issue of Environmental Law Reporter. It is available here. This article…

image from www.homesforwoundedwarriors.com

As a legal advisor to both for-profit and not-for-profit ventures for more than 30 years, I have had to learn about the business operations of new clients many, many times.  The facts are so important in these knowledge acquisition processes (which generally take time to complete).  The more experienced one is as a business lawyer, the more adept one is at getting the right facts–and analyzing the legal risks, rights, and responsibilities they represent or signal.

As a law professor, I have had many opportunities to experience joy from the work of my students.  They do such amazing things!  As the careers of my former students lengthen and deepen, my pride in them often exponentially increases.

With all that in mind, I bring you today a podcast featuring one of my beloved former students.  She doesn’t work for a law firm or a major multinational corporation.  She is not a general counsel.  Instead, she works for a relatively small nonprofit organization in a broad-based planning and development role.

The podcast consists of an exposition/interview by that former student, Betty Thurber Rhoades.  In the podcast, Betty explains–from soup to nuts (i.e., application to move-in)–the process of getting disabled veterans into…

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One of the topics I’ve repeatedly discussed in this space is how layers of doctrine have been so piled on top of inquiries like materiality and loss causation in the Section 10(b) context that the legal analysis  has become completely unmoored from the ultimate factual inquiry, namely, did the fraud actually result in losses to investors.  As I put it in one post:

[A]ll of our measures of impact and harm and loss are, at this point, so far removed from reality as to border on complete legal fiction.  Materiality is a construct from case law, with numerous additional doctrines piled on to it by courts without any heed for actual evidence of how markets behave. …. [W]hat we call “harm” and “damage” for the purpose of private securities fraud lawsuits have become so artificial that it no longer seems as though we’re even trying to measure the actual real-world effects of fraud.  I believe private lawsuits are an essential supplement to SEC action but a system of fines or statutory damages would make so much more sense.

This week, I call attention to another recent example of the phenomenon.  In Mandalevy v. BofI Holding, 2018 WL 3250154…

Earlier today, the Justice Department announced that it had reached a non-prosecution agreement with Credit Suisse.  The bank admitted to hiring the relatives of Chinese government officials and exempting them from performance reviews in order to curry favor.  The DOJ press release lays out the issue:

“In the banking industry, not every undertaking is fair game,” said Assistant Director-in-Charge Sweeney.  “Trading employment opportunities for less-than-qualified individuals in exchange for lucrative business deals is an example of nepotism at its finest. The criminal penalty imposed today provides explicit insight into the level of corruption that took place at the hands of Credit Suisse Group AG’s Hong Kong-based subsidiary.”

According to CSHK’s admissions, between 2007 and 2013, several senior CSHK managers in the Asia Pacific (APAC) region engaged in a practice to hire, promote and retain candidates referred by or related to government officials and executives of clients that were state-owned entities (SOEs).  The employment of these “relationship hires” or “referral hires” was part of a quid pro quo with the officials who referred the candidates for employment, whereby CSHK bankers sought to and did win business from the referral sources.  Employees of other subsidiaries of CSAG were aware of the referral

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Bernard Sharfman has posted Dual Class Share Voting versus the “Empty Voting” of Mutual Fund Advisors’ and it is an interesting read.  He argues: 

Dual class shares (shares with unequal voting rights) arise when the board of directors of a company decides to raise capital through the sale of newly issued shares, but wants one or more insiders, who may be giving up economic control through the issuance of the shares, to retain voting control in the company.  Typically, this occurs in an initial public offering (IPO), but it can also occur before.  In an IPO, a company will usually issue a class of common stock to the public that carries one vote per share (ordinary shares), while reserving a separate class, a super-voting class, that provide insiders with at least 10 votes per share.  However, both types of shares will have equal rights to the cash flow of the company.  The issuance of dual class shares may create a wide gap between voting and cash flow rights over time, especially if the insiders periodically sell a significant amount of their ordinary shares.

But this is the critical point.  A dual class share structure cannot exist without the permission of

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Seton Hall University School of Law welcomes applications for tenure-track positions to begin July 1, 2019. Candidates should have a J.D. or equivalent degree and a record of academic excellence. Candidates should be able to demonstrate both extraordinary scholarly promise and the ability or potential to be an outstanding teacher who can motivate students while preparing them for the practice of law in the twenty-first century. The School of Law will consider entry-level and junior lateral candidates in a variety of subject areas with particular focus on 1) Law and Technology, including data analytics/AI as it intersects with law and compliance, social media and electronic discovery, and ethics in the intersection of law and technology; 2) Business Law, preferably with a focus on Securities Regulation; and 3) Health Law, preferably with a focus on Healthcare Fraud or Food and Drug Law.

Seton Hall Law School offers a vibrant, energetic academic environment. Located in downtown Newark, New Jersey, approximately 20 minutes from Manhattan, Seton Hall Law is especially well-regarded in the health and life sciences law, intellectual property, cybersecurity, and privacy arenas, and it is in the process of expanding its role in energy, technology and data analytics. The faculty includes…

RobinHood

What would the world look like if a public company officer or director, recognizing the value of material nonpublic firm information in his possession and intending to benefit people of limited means, gave this valuable information to those less fortunate without the knowledge or consent of the firm and without any expectation of benefit in return? How, if at all, do we desire to regulate that behavior? The officer or director apparently would be in breach of his or her fiduciary duty absent a valid, binding, and enforceable agreement to the contrary. Does that conduct also, however, violate U.S. federal insider trading rules? Should it? This article, a relatively short piece that I wrote for a “virtual symposium” issue of the Washington University Journal of Law & Policy, offers answers to those questions.

Other symposium authors with insider trading pieces in this volume include:

John Anderson 
Steve Bainbridge
Frank Gevurtz
Zach Gubler
Peter Henning
Roberta Karmel
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Yesha Yadav

Great reading on this topic, all around.  As we await the next insider trading regulation volley after Salman v. United States, this collection of essays and articles fills a nice gap.  Although the issue is not yet posted to the…