May 2023

The following message was received by me earlier this evening from the SEC Historical Society.  I thought many of you would want the information.  I interviewed with Harvey Pitt back at Fried Frank in 1984.  He then was already a securities regulation icon.  I was impressed (even though I did not end up working at Fried Frank–but together with Skadden’s Washington, DC office, it was at the top of my list if I had decided to go to DC instead of Boston).  May he rest in peace and may his memory be for a blessing.

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Dear Friends,

I write to pass along the very sad news that former SEC Chairman and one of the Society’s founders, Harvey Pitt, passed away today.

There will be a service on Monday, JUNE 5th at 1:00 PM at the Washington Hebrew Congregation at 3935 Macomb Street, NW, Washington, DC 20016.

I understand that for anyone who would like to reach out to his wife, Saree, it was recommended by his family to give her a day or two before doing so.

I will pass along any additional helpful information that I may receive.

Sincerely,
Jane

Jane Cobb
Executive Director
j.cobb@sechistorical.org
202-756-5015

It’s not quite as dramatic as LeBron James taking his talents to South Beach, but I’m nevertheless excited to announce my upcoming move to the Free Enterprise Project (FEP), a DC-based think tank that “focuses on shareholder activism and the confluence of big government and big business.” The FEP is part of the National Center for Public Policy Research, which is “a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems.” The NCPPR was founded in 1982, and readers of this blog may be interested to know that among its many activities it is the plaintiff in a recently filed lawsuit accusing the SEC of viewpoint discrimination in connection with its oversight of shareholder proposals (co-blogger Ann Lipton recently discussed an aspect of that lawsuit here).

In addition to the FEP, the National Center includes: (1) the Environment and Enterprise Institute, (2) Project 21, (3) Able Americans, and (4) The Political Forum Institute. For those interested, I’ve included a brief summary of each of these projects below.

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Each year on and around Memorial Day, in addition to all the promotional sales that hit my email in box and text messaging apps, I read many grateful testimonials to those whose lives were lost in national military service.  The personal reflections are touching and inspire in me both sorrow for the loss and pride in the United States of America.  As many before me have said, there is no greater sacrifice for one’s country.

Although family members alive during my lifetime have served in the armed services, none of those family members died in the line of service.  I have been lucky to not suffer that kind of loss.  It would be heartbreaking.

Today, my brother (who researches our family history) asked his Facebook friends–me included–to honor “all of those who have lost their lives in the struggle for freedom.”  That request followed a brief recitation of the story of one of our family members who lost his life as a civilian working in what became enemy territory in World War II.  Here is what my brother wrote:

1st cousin 1 generation removed Donald MacLeod Williams (14 May 1921, San Francisco, California – 9 Mar 1943, Sasebo, Nagasaki, Japan)…

But the First Amendment challenges to the securities laws seem to be piling up – in the Fifth Circuit Court of Appeals, specifically.

The Chamber of Commerce recently petitioned that court to overturn the SEC’s new rules requiring disclosure of stock buybacks.  Though the briefing hasn’t been filed yet, the press release on the subject announces that the Chamber plans to argue that the new rules unconstitutionally compel corporate speech.

Next up, the National Center for Public Policy Research – a conservative organization that has been filing a lot of anti-ESG shareholder proposals under 14a-8 – just petitioned the Fifth Circuit regarding the SEC’s no-action letter permitting Kroger to exclude an NCPPR proposal requesting a report on the “risks associated with omitting ‘viewpoint’ and ‘ideology’ from [Kroger’s] written equal employment opportunity (EEO) policy.”  The NCPPR argues, among other things, that the SEC has denied exclusion of similar proposals with a liberal bent, and is therefore engaging in viewpoint discrimination by allowing Kroger to exclude the NCPPR proposal.  (The SEC’s response, so far, mainly focuses on whether a no-action letter counts as a final order).

Finally, the National Association of Manufacturers (NAM) just intervened in NCPPR’s case to argue that…

If you regularly read speeches given by SEC Commissioners and staff, you may have noticed a change in the standard opening.  For most of my career, the remarks always began with something to this effect:

Before I begin, I must give the customary disclaimer that the views I express today are my own and do not necessarily reflect the views of my fellow commissioners or the staff.

That standard disclaimer came from Commissioner Crenshaw on March 30, 2023 in the opening to her remarks to the Fixed Income Forum.  And about a month ago, Chair Gensler’s standard disclaimer on April 24, 2023 to the Annual Small Business Forum came out as:

As is customary, I would like to note that my views are my own, and I’m not speaking on behalf of the Commission or SEC staff.

But something has changed.  Chair Gensler gave the disclaimer this way on May 10, 2023 in remarks to the Municipal Securities Disclosure Conference:

My views are my own as Chair of the SEC, and I am not speaking on behalf of my fellow Commissioners or the staff (emphasis added)

This change continues forward to Chair Gensler’s remarks today to to the Investment…

Yesterday, a new paper by Cecilia Caglio, Jennifer Dlugosz, and Marcelo Rezende – all affiliated with the Board of Governors of the Federal Reserve System – posted on SSRN, Flight to Safety in the Regional Bank Crisis of 2023.  It’s obviously an incredibly timely piece.  Here’s the Abstract:

“Using weekly confidential data from U.S. banks, we document an unprecedented flight to safety of deposits from regional banks towards large banks in the early 2023. We show that large banks experienced large deposit inflows relative to small and regional banks and that these differences remain substantial if we account for bank characteristics associated with bank failures over this crisis, including liquidation values and shares of uninsured deposits. Large banks lowered deposit rates relative to other banks during the crisis, supporting the hypothesis that deposits flew to these banks because they are considered safer.”   

CGC(20thAnn&NeelCeleb-2023)
Earlier today, I had the honor of making a brief presentation at a luncheon honoring both the 20th anniversary of the Corporate Governance Center at The University of Tennessee, Knoxville, and a dear colleague and mentor, C. Warren Neel, who passed away at the end of March.  Set forth below are the reflections I shared at the luncheon–in relevant part.   These are my prepared remarks, but I often comment extemporaneously, rather than read.  So, please understand that I did not exactly say what is set forth below, although it accurately captures the content I delivered.

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Lawyers must be lawyers, and so I start with law.

On July 30, 2002, President George W. Bush signed into law the Sarbanes-Oxley Act of 2002—the most broad-based federalization of corporate governance since the adoption of the federal securities law regime itself in the 1930s. It was in the shadow of that landmark legislation that The University of Tennessee’s Corporate Governance Center—now appropriately named the Neel Corporate Governance Center—was born. Like the legislation itself, the Corporate Governance Center cast a wide net. As an interdisciplinary research program that includes the College of Law and the College of Business…

There’s been a lot of thinking recently about retail shareholder power.  The meme stock phenomenon, and the popularity of platforms like Robinhood, showed that retail shareholders can in sufficient numbers have a real influence over corporate behavior.   This had led authors like Sergio Alberto Gramitto Ricci and Christina Sautter to argue that we may be witnessing a revolution as retail shareholders assert themselves, bringing perhaps concerns about ESG and sustainability the fore.

A while back, Jill Fisch proposed that retail shareholders be given access to the type of electronic tools available to institutional shareholders so that they could create standing voting instructions, allowing them to cast ballots in corporate elections automatically according to predefined preferences.  That vision appears to close to realization; today, there are new programs that make it easier for retail shareholders to cast ballots, including in accordance with preset preferences.  As I understand the Iconik service, for a monthly fee, you can set your preferences and have the app automatically vote them – or you elect to follow the instructions provided by a third party provider like As You Sow or Third Act.  If you do that, it’s free.

And of course, we…

I’m excited to announce this new position. It’s particularly timely as just this morning, I had breakfast with venture capitalists, founders, and others in the tech ecosystem nurtured and propelled by the founders of Emerge Americas. This is a great time to be in Miami. Here are the details.

The University of Miami School of Law seeks to appoint an Inaugural Law & Technology Resident Fellow.  

This will be an exciting opportunity as the Fellow will join a vibrant community of scholars and practitioners working at the intersection of law and technology. Miami-Dade County and the surrounding Tech Hub is enjoying a dramatic expansion in technology-related startups and finance.  MiamiLaw has an established J.D. degree concentration in Business of Innovation, Law, and Technology (BILT). Faculty have set up numerous technology-related programs including Law Without Walls (LWOW) and the We Robot conference.

MiamiLaw currently offers courses in: AI and Robot Law; Blockchain Technology and Business Strategies; Digital Asset and Blockchain Regulation; Digital Transformation Services: Business & Legal Considerations; Dispute Resolution; Technology and The Digital Economy; E-Sports; Electronic Discovery; Genomic Medicine, Ethics and the Law; Intellectual Property in Digital Media; Introduction to Programming For Lawyers; NFTs: Legal and Business Considerations…

Dear BLPB Readers:

“The American Business Law Journal invites ALSB members who are interested in serving on the Editorial Board of the ABLJ to apply for the position of Articles Editor. The ABLJ is widely regarded, nationally and internationally, as a premier peer-reviewed journal. Serving as an Articles Editor provides an opportunity to serve the Academy of Legal Studies in Business and broader academic discipline at the highest levels of service. 

The incoming Articles Editor will begin to serve on the Board in August 2023. Board members commit to serve for three years: two years as Articles Editor and one year as Senior Articles Editor. After that, Articles Editors have the option of continuing to serve two more years—one as Managing Editor and another as Editor-in-Chief. Articles Editors supervise the review of articles that have been submitted to the ABLJ to determine which manuscripts to recommend for publication. If a manuscript is accepted, the Articles Editor is responsible for working with the author to oversee changes in both style and substance. If a manuscript is believed to be publishable but in need of further work, the Articles Editor outlines specific revisions and further lines of research that the author should pursue. The Articles Editor’s recommendations for works-in-progress are perhaps the most important and creative aspect of the job because they provide the guidance necessary for works …