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Benjamin P. Edwards

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Benjamin Edwards joined the faculty of the William S. Boyd School of Law in 2017. He researches and writes about business and securities law, corporate governance, arbitration, and consumer protection.

Prior to teaching, Professor Edwards practiced as a securities litigator in the New York office of Skadden, Arps, Slate, Meagher & Flom LLP. At Skadden, he represented clients in complex civil litigation, including securities class actions arising out of the Madoff Ponzi scheme and litigation arising out of the 2008 financial crisis. Read More

Over at The Race to the Bottom Blog, Jay Brown has posted a 3-part series reviewing Klaassen v. Allegro Development, a case currently pending before the Delaware Supreme Court, which deals with the issue of how much notice a board is required to provide a CEO before firing him or her.  What follows are brief excepts from each of the three parts, but you should definitely follow the links for the full discussion if this material is of interest to you.

Part 1

Increasingly … governance cases involve disputes among directors.  What does a management friendly approach mean in that context?  Most likely, it means an approach that favors management directors (i.e., the CEO) over non-management directors, particularly independent directors…. This hypothesis provides an interesting template for a review of Klaassen v. Allegro Development.  The case essentially involved a dispute between a CEO and the non-management directors…. At a meeting held on Nov. 1, 2012, the board voted to remove the CEO [Klaassen].  Klaassen eventually filed suit challenging the dismissal…. The board in turn asserted that the actions were at most voidable and subject to equitable defenses.  They argued for, and the Chancery Court found applicable…

Sofya Manukyan has published “Can the ICESCR Be an Alternative for Environmental Protection? Analysis of the Effectiveness of the ICESCR in Holding State and Non-State Actors Accountable for Environmental Degradation” on SSRN.  Here is an excerpt of the abstract:

[O]ne method for tackling the problem of environmental degradation is creating universal mandatory norms to which all corporations would adhere. Another method, however, which is considered in this work in more details, is the approach to the issue of environmental degradation from the human rights perspective, particularly from the perspective of each human being having the right to live in a healthy, clean environment. As the reflection of this right is found in the state binding UN Covenant on Economic, Social and Cultural Rights (ICESCR), we consider this indirect approach to the environmental protection as a possible effective method for addressing the issues of environmental degradation.

Therefore, in this work we first justify our choice of approaching the environmental protection from the perspective of state’s human rights obligations, rather than from the perspective of voluntary guidelines adopted by corporations and financial institutions. We then analyze how relevant articles of the ICESCR address the issue of environmental degradation. After…

Laura Brandstetter & Martin Jacob have posted “Do Corporate Tax Cuts Increase Investments?” on SSRN.  Here is the abstract:

This paper studies the effect of corporate taxes on investment. Using firm-level data on German corporations, we investigate the 2008 tax reform that cut corporate taxes by 10 percentage points. We expect heterogeneous investment responses across firms, since firms with a foreign parent have more cross-country profit shifting opportunities than domestically owned firms. Using a matching difference-in-differences approach, we show that, following the corporate tax cut, domestically owned firms increased investments to a larger extent than foreign-owned firms. Our results imply that corporate tax changes can increase corporate investment but have heterogeneous investment responses across firms.

Andrew F. Tuch has posted, “Financial Conglomerates and Chinese Walls,” on SSRN.  Here is the abstract:

The organizational structure of financial conglomerates gives rise to fundamental regulatory challenges. Legally, the structure subjects firms to multiple, incompatible client duties. Practically, the structure provides firms with a huge reservoir of non-public information that they may use to further their self-interests, potentially harming clients and third parties. The primary regulatory response to these challenges and a core feature of the financial regulatory architecture is the Chinese wall or information barrier. Rather than examine measures to strengthen Chinese walls, to date legal scholars have focused on the circumstances in which to deny them legal effect, while economists have focused on demonstrating Chinese walls’ practical ineffectiveness in a range of important contexts.

This paper discusses the phenomenon of failing Chinese walls, explains why it occurs, and proposes a regulatory solution. The paper argues that limits on market discipline and evidential difficulties in detecting and proving the use of non-public information account for the failures of Chinese walls. It shows how the Volcker Rule, a core plank of the Dodd-Frank Act, will likely reduce harms flowing from failing Chinese walls, despite the rule’s…

Over at The Race to the Bottom, Jay Brown has compiled a series of post on the recent proxy advisory services roundtable.  Here are the relevant links:

  • Introduction (“To be frank … roundtables do not often move the issue forward.  Comments can be random or incomplete. In a room full of experts, they can be woefully unprepared and tendentious. Statements can be predictable and provide little additional value to the debate.  This Roundtable, however, was different. It was very well done.”).
  • The Participants (“There was a good cross section of views to say the least.”).
  • The Data (“[T]he evidence presented at the Roundtable indicated that the largest asset managers (BlackRock for example) viewed the recommendations as an input, not a controlling influence.”).
  • Voting Decisions and the Need for Data Tagging (“Mutual funds must file voting data on Form N-PX…. [we should] require the filing of the data in an interactive format.”).
  • The Issue of Concentration (“Concentration is … a structural issue that exists in many places in the securities markets and the proxy process.”).
  • Plumbing Problems (“Michelle Edkins from BlackRock … noted that BlackRock retained ISS not only for advice but for other services as well. Some

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All the information you need is on the registration page.  Here are some relevant excerpts:

The Society of Socio-Economists (SOS) is a society of law teachers, teachers of economics and other disciplines, and other professionals and interested people who approach economic issues in harmony with the principles articulated in the statement of principles entitled “What Is Socio-Economics.” [Please see excerpt below.]  SOS holds an annual meeting in conjunction with the Annual Meeting of the Association of American Law Schools (AALS) in coordination with the AALS Section on Socio-Economics….

Statement of Socio-Economics Principles

Socio-economics begins with the assumption that economic behavior and phenomena are not wholly governed or described by any one analytical discipline, but are embedded in society, polity, culture, and nature.  Drawing upon economics, sociology, political science, psychology, anthropology, biology and other social and natural sciences, philosophy, history, law, management, and other disciplines, socio-economics regards competitive behavior as a subset of human behavior within a societal and natural context that both enables and constrains competition and cooperation.  Rather than assume that the individual pursuit of self-interest automatically or generally tends toward an optimal allocation of resources, socio-economics assumes that societal sources of order are necessary for people and…

Richard Schragger & Micah Schwartzman have posted “Some Realism about Corporate Rights” on SSRN.  Here is the abstract:

Can we meaningfully speak of a church’s right to conscience or a corporation’s right to religious liberty? One way to approach this question is by inquiring into the nature of churches and corporations, asking whether these are the kinds of entities that can or should have rights. We have recently seen this kind of reasoning in public debates over whether corporations have free speech rights, and, relatedly, in arguments about the religious free exercise rights of churches, non-profits, and for-profit corporations. Those in favor of such rights sometimes argue that corporations and churches are moral agents, capable of exercising rights separate and apart from the rights and interests of their members; whereas, those opposed tend to argue that churches, corporations or groups are mere aggregations of individuals, or else artificial persons created or recognized by the state to advance the interests of those who compose them.

In this paper, we argue that this form of argument is mistaken and that debates about the ontological status of group or corporate entities are largely irrelevant. One does not need a particular…

Eric Chiappinelli has posted “The Underappreciated Importance of Personal Jurisdiction in Delaware’s Success” on SSRN.  Here is the abstract:

The judges of the Delaware Court of Chancery are aggressively trying to stop stockholder/plaintiffs from filing corporate law cases outside of Delaware. Delaware believes that its position as the center of corporate litigation is in danger because cases are no longer filed exclusively there. If litigation continues to flow away from Delaware, it would jeopardize Delaware’s prominence in corporate law and the large revenues Delaware receives from out of state businesses that are incorporated there.

I argue that scholars and the Delaware judges underappreciate the vital importance of personal jurisdiction over corporate directors in Delaware’s quest to become and remain the center of corporate litigation. I show that Delaware’s dominance in litigation in large part stemmed from, and is now dependent upon, its unique system of personal jurisdiction.

None of Delaware’s attempts to stop cases from flowing out of Delaware will be enduringly successful without addressing the weaknesses in its current personal jurisdiction statute. I argue that Delaware should adopt a new statute that both will remedy the current flaws and will be effective in encouraging stockholder/plaintiffs to

The increase in institutional ownership of corporate stock has led to questions about the role of financial intermediaries in the corporate governance process. This post focuses on the issues associated with the so-called “separation of ownership from ownership,” arising from the growth of three types of institutional investors, pensions, mutual funds, and hedge funds.

Originally, the anti-takeover law passed its court challenges because the judges accepted faulty data that showed investors could acquire at least 85 percent of the target corporation and satisfy the Williams Act, Subramanian said. But none of the cases used to support the anti-takeover law actually allowed hostile suitors to acquire a controlling 85 percent of a target company, he said, and plaintiffs using research from new studies would be able to convince a judge that the statute is unconstitutionally restrictive.

For me, the financial crisis was an eye-opening moment. I’ve long believed in free market economics and believed that the Church would do a lot of good…

  • If you are looking for some books to help you better understand our economic history, try: Timothy Shenk on “The Long Shadow of Mont Pèlerin” – reviewing Angus Burgin’s The Great Persuasion (“[U]ncovering a history where the supposed founders of the American chapter of neoliberalism at the University of Chicago reprimand Hayek’s The Road to Serfdom for overdoing its indictment of the state while Keynes reports himself “in a deeply moved agreement” with the very same text.”).
  • For the blogroll: Jennifer Taub’s “perpetual crisis” blog (“a blog on banking, corporate governance, and financial market reform”).
  • Finally, you might be interested in Michael Pettis on “When Are Markets ‘Rational’?” (“To me, much of the argument about whether or not markets are efficient misses the point. There

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