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Anne Tucker

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Anne Tucker teaches and researches contracts, corporations, securities regulations, and investment funds.

Tucker’s research focuses on three areas of business law. The first is on the regulation and administration of funds (both public and private funds) and how pooled investments can achieve significant personal and social ends, such as retirement security and private funding for social entrepreneurship. Second, she focuses on impact investing and contract terms that reinforce impact objectives alongside financial returns. Third, she studies corporate governance, including the role of institutional investors as shareholders. Read More

Chief Justice John Roberts wrote for himself, Justice Anthony Kennedy and the four liberal justices that:

“Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them… If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

Justice Antonin Scalia wrote the dissent, joined by Clarence Thomas and Samuel Alito, suggesting that the health care reform should be called SCOTUScare because the high court has now intervened twice to save the flawed law.

The opinion is available here: http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf

The AALS Annual meeting will be held in NYC in January, 2016.  The Section on Business Associations will be co-hosting a program entitled The Corporate Law and Economics Revolution 40 Years Later: The Impact of Economics and Finance Scholarship on Modern Corporate Law.

Presenters will include Judge Frank Easterbrook, Professor Roberta Romano  (Yale) and Professor Kent Greenfield (Boston College).

 The full call for papers is available here:  Download AALS Call for Papers 2016-1. The deadline for submitting an abstract (please send to Professor Usha Rodrigues at  rodrig@uga.edu) is August 27, 2015. 

SEC Commissioner Kara M. Stein provided remarks at the Brookings Institute’s 75th Anniversary of the Investment Company Act on Monday, June 15th.  Now if that isn’t an exciting introduction to a post, I just don’t know what is.  She addressed a topic that is of great interest to me and a focus of my research:  retail/retirement investors.  I tend to call them Citizen Shareholders in my writing, and it is sentiment shared by Commissioner Stein:

“By retail investor, I mean the everyday citizen or household that is investing – not institutional investors or pension funds.  Eighty-nine percent of mutual fund assets are attributable to retail investors.” (emphasis added).

In her remarks she detailed several troubling aspects of the mutual fund industry–a primary investment source for retail investors– liquidity, leverage and disclosure.  She also highlighted future SEC rule making initiatives related to these issues.   For example, the Commission recently proposed new rules to enhance data reported to the Commission by registered funds. The proposed rule is available  here (Download SEC proposed disclosure rules) and received comments can be tracked on the SEC’s website here.

Noting that a major function of the 1940 Investment Act was transparency and…

My recent scholarship (e.g., Outside Investor & Retirement Revolution) has focused on retirement and institutional investors. On the retirement investor side, I frequently address the impact that fees have on retirement investment returns, in part, as a critique of the opacity and lack of choice in the defined contribution plans (i.e., 401K and 457 plans). A focus on fee reduction (as well as simple diversification) has driven growth in the index and electronically-traded (ETF) funds, which charge lower fees because they are passively managed.  These simple lessons in finance are not just relevant to the individual investor.  Earlier this week, CalPERS announced that it would cut fund management fees by reducing (nearly in half) the number of active fund managers overseeing the investment of its over $300 billion in assets.  The New York Times reported that:

Eliminating some external managers will help Calpers shore up its investments by reducing fees. Last year, it paid $1.6 billion in management fees, $400 million of which was a one-time payment for its real estate managers, a Calpers spokesman said.

With larger pools of assets shifted to the remaining asset managers, CalPERS should have more leverage to demand lower fees and cost…

Yesterday Martin Lipton, of Wachtell, Lipton, Rosen & Katz, posted “Dealing with Activist Hedge Funds” at the Harvard Law School Forum on Corporate Governance and Financial Reform. This is more like a checklist included at the end of a treatise than a typical blog post and it promises many different uses from new associate training to inclusion in a corporate governance seminar syllabus  (CHECK!), to helping clients understand the landscape of activist hedge funds.  The post summarized common activist attack methods like proxy fights, withhold votes, proxy resolutions, and PR campaigns, etc.  It also provides a company/target defense checklist addressing major categories of action such as:

  • Creating designated corporate teams
  • Shareholder relations
  • Board of Director management strategies
  • Stock & financial monitoring

Additionally, the post categorizes, in some detail, the various response options available to targets as well as documents the shifting landscape of hedge fund activism: 

Many major activist attacks involve a network of activist investors (“wolf pack”) which supports the lead activist hedge fund, but attempts to avoid the disclosure and other laws and regulations that would hinder or prevent the attack if they were, or were deemed to be, a “group” that is acting in

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Earlier I blogged (on the BLPB here and CLS Blue Sky Blog here) about my co-authored piece, Institutional Investing When Shareholders Are Not Supreme–a 30-year empirical and case review study analyzing institutional investors’ response to constituency statutes as one lens into the question of institutional capital available for alternative purpose firms, like benefit corporations.  On Monday, I wrote a short post on our article for the Harvard Law School Forum on Corporate Governance and Financial Reform, which is available here.  

-Anne Tucker

This week I have found myself reading the co-authored, empirical piece by C.N.V. Krishnan, Frank Partnoy, and Randall Thomas titled, Top Hedge Funds and Shareholder Activism.  Through their sample they observe that top hedge funds have repetitional capital in that the market responds more positively to announcements by certain hedge funds with certain features, like a longer track record, larger assets under management and management participation through board of director seats.  Its an interesting and insightful article on the role, and value, of hedge funds. The authors conclude that 

The market appears to anticipate the superior performance of these top hedge funds even before announcement of intervention. Moreover, post-intervention target-firm operating performance associated with these top hedge funds is significantly superior to that of other hedge fund activists.

The focus on reputation reminded of Elisabeth de Fontenay’s good work on reputation in private equity.  Her article, Private Equity Firms as Gatekeepers, 33 Review of Banking & Financial Law 115-189 (2014).  de Fontenay argues in her piece that: 

private equity firms act as gatekeepers in the debt markets. As repeat players, private equity firms use their reputations with creditors to mitigate the problems of borrower adverse selection

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CRN: #46  Corporate and Securities Law in Society

 LSA 2015 Schedule

 

THURSDAY, MAY 28

 

 

2:45 PM – 4:30 PM

3319—Roundtable: Shareholders, Stewardship & Accountability

Room: Mercer 

 

  
 

FRIDAY, MAY 29

 

 

9:30 AM – 11:15 AM

3321—Corporations and Their Constituencies: Employees, Customers, Creditors, and the Public

Room: Adams

1:30 PM – 3:15 PM

3322—Banking, Securities, and Beyond: Evaluating Financial Regulation in Varied Contexts

Room: Adams

3:30 PM – 5:15 PM

3325—Business Decisionmaking and Business Law: Exploring Implications for Constituencies and Communities

Room: Adams 

5:30 PM – 7:15 PM

3326—New Insights on Law and Regulation’s Evolution and Efficacy

Room: Adams

SATURDAY, MAY 30

 

 

 

8:15 AM – 10:00 AM

3320—Ownership and Control: New Considerations on Litigation, Governance Structures, and Shareholder Activism

Room: Adams

Professor  Steven Davidoff Solomon posted this article to the DealBook yesterday highlighting France’s new 2-votes for long-term shareholders law:  The Florange Law.  

The centerpiece of the Florange Law is a mandate that French companies give two votes to any share held for longer than two years. This goes against the historical one-vote-for-every-share system that most countries have. The law allows an opt-out if two-thirds of shareholders approve one by March 31, 2016.

ISS issued a guide (Download Impact-of-florange-act-france) opposing the law and encouraging investors to pressure directors to opt out of the law (through amendments to corporate bylaws) before the deadline.  

Professor Davidoff Solomon questions the strength of the one-share-one-vote corporate democracy in the U.S., noting that recent IPOs, like Facebook, went public with two classes of stock as a anti-takeover measure.  There is also the related question of what impact a law like this would have given the turnover rates of many institutional investors. 

-Anne Tucker

From the industrious editors at Chapman Law Review soliciting papers for their 2016 Symposium on Cybesecurity:

Cybersecurity has become a critical national security and corporate security problem in the last fifteen years. Examples include hackings of the Pentagon, SONY, Target, JPMorgan Chase, Home Depot, various universities, and hospitals. A lively debate is now raging in Congress, academia, and in the corporate world over what steps should be taken. Attorneys are at the forefront of the problem in advising clients and securing confidential information. What duties do attorneys and corporations have to prevent a cyberattack? What duties do attorneys and corporations owe to their clientele? What actions should attorneys and corporations take to mitigate a cyberattack once it occurs? What measures can businesses take to respond in the future? What steps should the U.S. Government take to protect its public and private entities? How can the U.S. Government respond to attacks on private entities? What domestic law governs cyberattacks and their responses? 

The Chapman Law Review will explore these and other questions at our next symposium on January 29, 2016, to be held at the Dale E. Fowler School of Law at Chapman University.  We invite interested scholars and practitioners to

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