A while ago, I noted a New York Times article about the effect of SEC Chair Mary Jo White’s recusals from cases because of her husband’s work at Cravath. The Times has a follow-up today. Apparently, the 2-2 split that results when Ms. White recuses herself is causing some real enforcement headaches, including missing a statute-of-limitations deadline.
In Remembrance of Those Who Fell
In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.
We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.
Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.
-John McCrae, In Flanders Fields
Today is Memorial Day. Before you run to the beach or the park, or wherever you’re spending the holiday, take a moment to remember those dear soldiers who have fallen. They won’t be going to the beach or park today. They gave their lives so you could live.
You may think, as I do, that some of our more recent battles were better not fought, but that doesn’t make the sacrifices of the soldiers who fought in them any less noble or honorable. The loss of life is even more tragic or regrettable when stupid politicians needlessly
$2 Million in Attorneys’ Fees for “No Quantifiable Benefit”
You may recall my blog post this fall about the Delaware Chancery Court opinion in In Re Nine Systems Corporation Shareholders Litigation. That case discusses what happens when a self-dealing transaction results in a fair price, thus causing no damage to the corporation, but the process followed was fair. The court held that the plaintiff could still recover attorneys’ fees and costs. I noted that the only people likely to be satisfied with that result were plaintiffs’ attorneys. (It makes no difference to the plaintiffs in the case because they had a contingent fee agreement with their attorneys-no recovery, no attorneys’ fees to be paid.)
The Chancery Court just entered its order awarding plaintiffs’ counsel, Jones Day, $2 million dollars in attorneys’ fees and expenses. That’s right, the attorneys get $2 million even though, as the Vice Chancellor notes, “the quantifiable benefit obtained in this litigation was $0.” Thus, the defendants have to pay $2 million to counsel for helping the court determine that nothing they did harmed the corporation or its shareholders.
It could have been worse; plaintiffs’ counsel asked for $11 million.
I’m afraid that this opinion will give plaintiffs’ attorneys an incentive to search for problems
Scholarship & Advocacy Conflicts + Corporate Constitutional Rights
Thanks to faithful BLPB reader Scott Killingsworth for the tip about this new article appearing in the New Yorker detailing the scholarship and advocacy of renowned Harvard constitutional law professor Laurence Tribe. The article raises questions about conflicts of interest between scholarship and advocacy.
[I]t would also be foolish to ignore the inherent tension in searching for truth while also working for paying clients. The scholar-warrior may lapse into a far more contemptible figure: the scholar for hire, who sells his name and his title for cash. A subtler danger comes from the well-known and nearly unavoidable tendency lawyers have of identifying with their clients.
The article also highlights his role in the current debate on corporate constitutional rights.
Tribe has taken a strong view of individual rights; his view of corporate rights is similar, and in this capacity he has at times advanced constitutional arguments that might invalidate great parts of the administrative state, in a manner recalling the Supreme Court’s jurisprudence of the nineteen-twenties and thirties. In that sense, the current condemnation of Tribe can be seen as part of a larger progressive backlash against the use of the Bill of Rights to serve corporate interests.
This
Call for Papers – AALS Sections on Business Associations and Law & Economics
The AALS Sections on Business Associations and Law & Economics are pleased to announce a Call for Papers for a joint program to be held on Friday, January 8, 2016 at the AALS 2016 Annual Meeting in New York City. The topic of the program is “The Corporate Law and Economics Revolution 40 Years Later: The Impact of Economics and Finance Scholarship on Modern Corporate Law.”
Corporate law scholarship continues to engage in a dialogue with the wave of law and economics scholarship that exploded in the 1980s. The law and economics revolution dramatically shifted the way that scholars, courts, practitioners, and business leaders see the relationship between management and shareholders.
Modern corporate law theories owe much to literature in economics and finance, such as Jensen and Meckling’s 1976 article on agency costs within the firm and Eugene Fama’s work on efficient capital markets. By the 1980s, many ambitious legal scholars were applying insights from economics and finance literature to corporate law and the capital markets. They explored such ideas as the market for corporate control, the market for corporate law, the need for systematic corporate disclosure, the role of the board, and the role of shareholders in corporate governance.
Nat’l Bus. Law Scholars Conf. Line up & Extended Deadline
National Business Law Scholars Conference
Thursday & Friday, June 4-5, 2015 (Seton Hall University School of Law, Newark, NJ)
The organizers have put together a great line up of speakers and this conference is becoming (has already become) an intellectual highlight for the summer. Keynote speakers include: SEC Commissioner Troy Paredes, and Boston College Law Professor Kent Greenfield.
In addition to the call for papers, which has been extended to May 8th (email Eric Chaffee), the conference will feature a Plenary Panel on the Extraterritorial Application of Federal Financial Markets Regulations with the following participants:
Colleen Baker (view bio)
Lecturer, University of Illinois, College of Business
Sean Griffith (view bio)
T.J. Maloney Chair in Business Law; Director, Fordham Corporate Law Center
Eric Pan (view bio)
Associate Director, Office of International Affairs, U.S. Securities & Exchange Commission
Joshua White (view bio)
University of Georgia, Terry College of Business
For those of you unfamiliar with the NBLSC, here’s a conference description from the organizers:
This is the sixth annual meeting of the NBLSC, a conference which annually draws together legal scholars from across the United States and around the world. We welcome all
What’s in a Title?
Perhaps this post would have been timelier before the spring submission cycle, but hopefully it will be helpful in framing title options for pieces being developed this summer. One of the many benefits of co-authorship is learning substantive and procedural knowledge from your collaborators. On a recent article, I worked with three economists who have different skill sets, perspectives, and discipline standards. When we were trying to finalize our title, we came up with several different categories or types of article titles—a framework that I will utilize again in the future and which I am sharing with you today. We selected the “themed” based title for our article, Institutional Investing When Shareholders Are Not Supreme, and a play on words, Institutional Investors’ Appetite for Alternatives, for a shorter piece appearing on Columbia Blue Sky Blog.
Title Framework:
SOBER: Institutional Investing after Constituency Statutes
QUESTION: Does Changing Shareholder Value Maximization Standards Change Institutional Investors’ Behavior?
CONTRAST: Institutional Investors Behavior Before and After Constituency Statutes
PLAY ON WORDS: Appetite for Alternatives: Institutional Investors’ Behavior in the Fact of Shareholder Value Maximization Pressures
FORWARD THINKING: What Does Institutional Investors Behavior after Constituency Statutes Tell Us Regarding
“Best Interest Contracts”–Proposed DOL Regulation of Retirement Brokers
In an earlier BLPB post, I wrote about President Obama’s call for greater regulation of retirement investment brokers. The proposed reforms focused on elevating the current standard that brokers’ investment advice must be “suitable” to something closer to an enforceable fiduciary duty to counter financial incentives for some brokers to channel investors into higher-fee investment options.
Yesterday, the U.S. Department of Labor released new proposed rules (Proposed Rule), which would classify brokers as “fiduciaries” under ERISA but allow them to continue to receive brokerage commissions and fees (a practice that would otherwise violate ERISA conflict-of-interest rules) so long as the brokers and customers enter into a “Best Interest Contract”.
The exemption proposed in this notice (“the Best Interest Contract Exemption”) was developed to promote the provision of investment advice that is in the best interest of retail investors such as plan participants and beneficiaries, IRA owners, and small plans. Proposed Rule at 4.
In 1975, the DOL issued rules defining investment advice for purposes of triggering fiduciary status under ERISA and the attended duties and conflict-of-interest prohibitions. That 1975 definition is still in use, is narrow, and excludes much of paid-for investment advice, particularly that
Call for Papers – Fourth European Research Conference on Microfinance
CALL FOR PAPERS
Fourth European Research Conference on Microfinance
1-3 June 2015
Geneva School of Economics and Management, University of Geneva
Geneva, Switzerland
Access to suitable and affordable finance is a precondition for meeting basic human needs in incomes and employment, health, education, work, housing, energy, water and transport. Microfinance – and more broadly, financial inclusion – will continue to be on the research and policy agenda. 2015 will be a special occasion to question received notions about the link between access to finance and welfare. In 2015 the Millennium Development Goals will make place for the Sustainable Development Goals. A broad debate and exchange on micro, macro and policy topics in financial inclusion will advance our knowledge and ultimately improve institutional performance and policy. This applies in particular to issues of financial market organization, but also patterns, diversity and trade-offs in institutional performance, scope for fiscal instruments, impact of technology on efficiency and outreach etc.
The European Research Conference on Microfinance is a unique platform of exchange for academics involved in microfinance research. The three former conferences organized by the Centre for European Research in Microfinance (CERMI) at the Université Libre de Bruxelles in 2009, by the University of
Phillips on “Can Entrepreneurial Education Restore Faith in Legal Education?”
My colleague Mark Phillips recently published a short article in the Nashville Bar Journal entitled Can Entrepreneurial Education Restore Faith in Legal Education? (pgs. 6-7). Mark primarily teaches entreprenuership classes in the undergraduate and graduate business schools at Belmont University, but has a JD from NYU Law, in addition to his MBA from NYU (Stern) and his PHD from George Washington University.
For local readers, Mark will be speaking at a Nashville Bar Association breakfast on Nov 11th (at 8 am at Noshville restaurant at 1918 Broadway, Nashville, TN 37203). Mark has also started a website (www.eEsquire.net), which may be of interest to readers.
A portion of Mark’s recent Nashville Bar Journal article is below:
A great deal was lost in legal industry during the recent recession, but perhaps the most lasting damage was inflicted upon the reputation of law schools. When news broke in 2011 that a significant number of law schools had distorted their placement figures to increase enrollment and rankings, both current and prospective law students were shocked. After a stretch of bad publicity, coupled with some inevitable lawsuits, law schools worked to erase their new-found stigma through greater disclosure and transparency. Yet