July 2022

The AALS Section on Securities Regulation invites submissions from junior scholars (defined as those who have been in a tenure-track position for 7 or fewer years) for its Emerging Voices session at the 2023 AALS annual meeting. The session will be held in-person on Saturday, January 7 from 3:00 – 4:40 p.m (PST). The session brings together junior and senior securities regulation scholars for the purpose of providing junior scholars feedback on their scholarship and helping them prepare their work for submission for publication. Junior scholars’ presentations of their drafts will be followed by comments from senior scholars and further audience discussion.

If you would like to present your draft as a junior scholar, by August 31, 2022, please send your draft to Professor Benjamin Edwards (Benjamin.Edwards@unlv.edu). We welcome submissions at any stage of development, although preference may be given to more fully developed papers over abstracts and paper proposals. The authors of the selected papers will be notified by mid-September 2022. 

If you would like to volunteer to provide feedback as a more senior scholar, please let Professor Edwards know, at Benjamin.Edwards@unlv.edu, by August 31, 2022. Thank you in advance for your generosity.

On behalf of the…

POSITION NOTICE

FACULTY POSITIONS
The University of Tennessee
College of Law

THE UNIVERSITY OF TENNESSEE COLLEGE OF LAW invites applications from both entry-level and lateral candidates for up to four full-time, tenure-track faculty positions to begin at the start of the 2023-24 academic year. The College is interested in candidates with scholarly aptitude and experience in one or more of the following curricular areas:

  • Advocacy Clinic (a civil, juvenile, and criminal law direct legal services clinic)
  • Business law (including business associations and contracts)
  • Criminal law (both substantive and procedural)
  • Environmental law
  • Estate planning and tax
  • Health law
  • Property
  • Technology and data privacy

All positions require a J.D. or equivalent law degree. Successful applicants must have an impressive academic background. Candidates also must have a strong commitment to excellence in teaching, scholarship, and service. Significant professional experience is desirable. 

In furtherance of the University’s and the College’s fundamental commitment to diversity in our faculty, student body, and staff, we strongly encourage applications from people of color, women, individuals with disabilities, LGBTQ+ people, veterans, and others whose background, life experiences, viewpoints, or philosophy would contribute to the diversity of our faculty, curriculum, and programs.

The University of Tennessee, Knoxville, is an R1…

Professor  Timothy D. Lytton, Associate Dean for Research and Faculty Development at Georgia State Univeristy, recently published his new article, Using Insurance to Regulate Food Safety: Field Notes from the Fresh Produce Sector, in the New Mexico Law Review. Here’s the abstract:

Foodborne illness is a public health problem of pandemic proportions. In the United States alone, contaminated food sickens an estimated 48 million consumers annually, causing 128,000 hospitalizations and 3,000 deaths. Nowhere is this crisis more acute than in the fresh produce sector, where microbial contamination in growing fields and packing houses has been responsible for many of the nation’s largest and deadliest outbreaks. This Article examines emerging efforts by private insurance companies to regulate food safety on farms that grow fresh produce.

Previous studies of using insurance to regulate food safety rely on economic theories that yield competing conclusions. Optimists argue that insurance can promote efficient risk reduction. Skeptics counter that insufficient information regarding the root causes of contamination renders insurance impotent to reduce food safety risk. This Article adds a sociolegal perspective to this debate. Based on interviews with insurance professionals, the Article documents how, notwithstanding limited information, underwriters employ a variety of techniques to…

Earlier this year I wrote about a startling Georgia decision finding that FINRA’s arbitrator selection process had been manipulated.  In response, FINRA announced that it would retain an independent firm to conduct an investigation. 

The results of that investigation are now publicly available in a Report from Christopher W. Gerold.  The report found that the outside firm “not believe that there was any agreement between Weiss and FINRA regarding the panels for Weiss’s cases.”  It did not find any “documentary evidence – including any emails or other material – suggested in any way that such an agreement existed.”

The Report also recommended a series of changes to improve FINRA’s dispute resolution system, including:

  • Implementing ongoing, mandatory training for staff;
  • Requiring written explanations, upon a party’s request, of approval or denial of a causal challenge to the selection of an arbitrator or an arbitrator removal by the DRS Director for cause;
  • Conducting an updated external procedural review of the arbitrator selection algorithm to determine if it is still the most effective means for creating random, computer-generated arbitrator lists; and
  • Updating the DRS Manual and rules to clarify staff roles and procedures, and to ensure consistency and transparency.

Hopefully FINRA will move

Dear BLPB Readers:

“The Institute for Law & Economics (ILE) at The University of Pennsylvania Carey Law School is pleased to announce its inaugural Junior Faculty Business and Financial Law Workshop. The Workshop will be held in person on December 8, 2022 at Penn Law School, unless pandemic protocols require otherwise.

The Workshop supports and recognizes the work of untenured legal scholars in accounting, banking, bankruptcy, corporations, economics, finance and securities regulation and litigation , while promoting interaction among them and selected tenured faculty and practitioners. By providing a forum for the exchange of creative ideas in these areas, ILE also aims to encourage new and innovative scholarship in the business and financial arena.”

The complete call for papers is here.

Last week, I posted the abstract to my paper Crony Stakeholder Capitalism (here).  One of the comments to that post perspicaciously noted the issue of “how to ensure democratic accountability for private actors that are taking on social goals historically reserved for democratically accountable government.”  In my brief reply, I focused on the duties to shareholders, but I want to follow-up here to note that I do in fact flag the relevant threat to democracy in a footnote in my paper:

A related concern is the potential for stakeholder capitalism to undermine our political system by shifting governmental power to private actors, thereby undermining public accountability of government. Cf. Dorothy S. Lund, Asset Managers as Regulators, THE CLS BLUE SKY BLOG (June 16, 2022) (“allowing three private investment companies that lack political accountability to set regulatory policies for the U.S. economy is dangerous for our democracy”), available at https://clsbluesky.law.columbia.edu/2022/06/16/asset-managers-as-regulators/ ….

Along these lines, I recently came across some related podcast comments from Vivek Ramaswamy, author of Woke, Inc.: Inside Corporate America’s Social Justice Scam, and co-founder and Executive Chairman of Strive Asset Management (“Our mission is to restore the voices of everyday citizens in the…

Greetings from Cervera, Spain.  As you know from my post last week, I am traveling in the Catalonia region of Spain for a few days this week after the 2022 Law and Society Association Global Meeting on Law and Society, which was held in Lisbon, Portugal this year.  I have the blessing of staying with a friend (whom I met through Zoom mindful yoga practices during the pandemic) in her private home.

I want to offer a quick post this week to reflect on what turned out to be a mini-theme in the presentations I attended at the Global Meeting on Law and Society.  That mini-theme was, perhaps unsurprisingly, corporate stakeholderism.  (And I note with some interest that Stefan has recently written and blogged on an aspect of corporate stakeholderism as well.)  The following programs from the collaborative research network (CRN) to which I belong picked up on this theme, in one way or another:

  • an entire paper panel entitled: “Corporations, Shareholders, and Other Stakeholders,” which featured academic work focusing on corporate governance and finance from a number of different stakeholder perspectives;
  • a roundtable discussion entitled “Corporations & Engendering Public Trust,” billed as a session that “brings together corporate

…

I’m excited to share that my most recent article, Derivatives and ESG, is forthcoming in the American Business Law Journal (Vol. 59, no.4)!  I recently posted a draft of this article to SSRN.  As the abstract below suggests, it examines the role of the derivatives ecosystem – the instruments themselves, trading exchanges, and clearinghouses – in promoting ESG objectives. 

I’ve written a lot about credit default swaps (for example, here and here).  So, in researching this topic, I was especially struck by the potential for well-known past and existing challenges in credit default swap markets – specifically, decentralized decision-making and conflicts of interest – to eventually become issues in the currently nascent sustainability-linked derivatives (SLDs) market, a type of over-the-counter ESG derivative.  Undoubtedly, the SLDs market is set to grow, so I’ll likely be posting on this topic again in the future!   

Here’s the abstract:

“Financial markets are increasingly developing innovative, ESG-related derivatives and relying upon these instruments to hedge ESG-related risks. The global derivatives markets are among the largest, most consequential financial markets in the world. Derivatives are financial contracts that derive their value from an underlying reference entity which can be almost anything, including…

I have posted a draft of my latest paper, Crony Stakeholder Capitalism (Kentucky Law Journal, forthcoming), on SSRN (here).  The abstract is below.  Comments are most welcome.

Capitalism in the context of corporate governance may be understood as an economic system that equates efficiency with corporate managers only pursuing projects that they reasonably expect will have a positive impact on the value of the corporation’s shares (accounting for opportunity costs). Such projects may be referred to as positive net-present-value (NPV) projects. Stakeholder capitalism, on the other hand, may be understood a number of different ways, including: (1) an improved form of calculating NPV; (2) a conscious choice to sacrifice some NPV in order to advance broader social objectives; (3) a form of rent-seeking; (4) a form of green-washing; (5) a manifestation of the agency problem whereby managers prioritize their personal political preferences over NPV; (6) a manifestation of the agency problem whereby managers prioritize their personal financial wealth over NPV; (7) a form of crony capitalism. Of these, an argument can be made that only the first is both legal and efficient, at least in the case of Delaware corporations operating under the relevant default rules. Given the…

is something I said on Twitter in connection with l’affaire de Musk. 

What I meant by that is not the specific legal rule of Revlon regarding directors’ fiduciary duties, but the orientation of Revlon, meaning, shareholder wealth maximization as the raison d’etre of corporate law, with the recognition that once a company is sold for cash, it is effectively dead, at least as far as its former investors are concerned.  It had no purpose other than as a vehicle for their wealth, and, once liquidated, that purpose is fulfilled.

Much of the commentary regarding the Twitter dispute – usually, though not always, coming from pundits outside the corporate space – is genuinely disorienting for a corporate law person, because it treats Twitter as an entity that exists as the collective sum of its stakeholder interests, rather than as an avatar for investor interests.

Which is a totally normal, human way to think about the problem from the perspective of a citizen or as a person who inhabits this planet, but is almost entirely illegible from the perspective of Delaware corporate law.

To wit:

…