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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

We’ve covered the TripAdvisor litigation here for some time.  With the case before the Delaware Supreme Court, Nevada has weighed in with an amicus brief.  Nevada, on behalf of Francisco Aguilar, Nevada’s Secretary of State, was represented by its Office of the Attorney General,  friend of the BLPB, Anthony Rickey, and DLA Piper’s John Reed.  Ann’s Tweet even makes an appearance.

Nevada argues that Delaware’s Chancery Court should not accept allegations in a complaint about Nevada law instead of analyzing Nevada law itself.  It also argues that the decision risks creating an exit tax on any corporation that seeks to leave Delaware for Nevada–or some other state.  To the extent that any other state arguably offers benefits that wouldn’t be available to a controlling shareholder in Delaware, the same standards would apply.  Thus, a reincorporation to Texas, Florida, or California might even be covered.  Depending on how far you take it, any corporation seeking to redomesticate to any of the many states with constituency statutes might face the same kind of challenge.

The amicus also points out that claims that Nevada has “raced to the bottom” should sound familiar to Delaware because Delaware itself has faced this…

The Department of Labor recently released its new fiduciary rule.  I covered the initial announcement here.  These are direct links to the parts of the rulemaking package:

FINAL RULE: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/erisa/retirement-security/final-rule.pdf

PTE 2020-02: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/erisa/retirement-security/prohibited-transaction-exemption-2020-02.pdf

PTE 84-24: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/erisa/retirement-security/prohibited-transaction-exemption-84-24.pdf

Other PTE Amendments: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/erisa/retirement-security/prohibited-transaction-exemptions-75-1-77-4-80-83-83-1-and-86-128.pdf

The New York Times has also covered the release.  I contributed my view to the piece.  As I see it, if printing a financial adviser’s disclosers will run your printer out of toner, you should just find a different financial adviser.  

The simplest way to buy advice is to hire a “fee-only” independent certified financial planner who is a registered investment adviser, which means they are required to act as fiduciaries when providing investment advice about securities (stocks, mutual funds and the like). As part of that fiduciary duty, they must eliminate conflicts or disclose them.

“Your odds of conflicts go up, the longer their disclosures are,” said Benjamin Edwards, a professor at the William S. Boyd School of Law at the University of Las Vegas.

There will be much more on this to come.  The rule is great for ordinary people because it uniformly raises standards for advice about their retirement account money.  One of the major problems…

Samantha Prince, Timothy G. Azizkhan, Cassidy R. Prince, and Luke Gorman recently released an interesting paper on the effects of 401(k) vesting schedules. With defined-contribution plans, employees always get to keep the contributions withheld from their paychecks.  Whether the employee will always keep the employer contributions depends on the vesting schedule in play, if any.

And vesting schedules really matter.  The authors found that in the 909 2022 filings they reviewed at least 1.8 million employees lost out on at least a portion of their employer contributions.  After the employees forfeit employer contributions on termination, the employers get to recycle the funds within the plan, avoiding the need for additional contributions. The filings indicated that employer contributions that were recycled were over $1.5 billion. This large sum represents money failing to follow the employee out the door because employment terminated before employees “vested” under the plans.

The analysis shows a partial picture of the broader American landscape because they analyzed 909 different single employer plans.  Still, the plans analyzed covered some major employers such as Amazon and Home Depot.

There are two main types of vesting schedules–graded vesting and cliff vesting.  In graded plans, the employee gradually gets to keep…

Andrew Jennings recently featured Nicole Iannarone and her work on the Business Scholarship Podcast.  You can access the episode here.  It focuses on a paper on securities arbitration and some of her recent work.  I’d like to direct your attention to the last five minutes or so.  It discusses being appointed as an arbitrator.  

If you’re a business law professor, you’re probably pretty well qualified to serve as arbitrator.  It might also give you insight into what happens in these kinds of disputes.  Because I’m involved with a securities arbitration bar association, I’m deemed to be a non-public arbitrator so I don’t get selected often.

But if you’re fair-minded and not in a major city, there is a real need for more competent arbitrators.  The paperwork and training doesn’t take all that long, and it’s pretty interesting if you get selected.

A recent decision from Judge Andrew S. Hanen of the Southern District of Texas found that a pump and dump scheme could not be prosecuted as wire fraud.

I’m trying to wrap my head around it and struggling.  It seems to find that the government could not prosecute a pump and dump scheme because the defendants only wanted to make money and did not want to deprive any specific people of money or property.  The mere fact that the pump and dump scheme occurred through a market and not in direct personal transactions seems to have driven the decision.

Bloomberg’s Matt Levine has covered it.  It also made CNN.  

Notably, the indictment even includes statements that the Defendants said things like “we’re robbing … idiots of their money.”

For a long time, compensated non-attorney representatives (NARs) have been a blight on FINRA’s securities arbitration forum.  PIABA released a report highlighting problems with these groups in 2017.  After considering the issue, FINRA moved to largely ban non-attorneys from representing investors in securities arbitration.  The proposed rule change expressly permits law school clinics or their equivalent to continue to appear on behalf of investors.  The proposal was even approved by the SEC’s Division of Trading and Markets on January 18, 2024 pursuant to its delegated authority. 

Despite the lack of any opposition in the comment file, an unknown SEC Commissioner blocked the rule from going into effect under “Rule 431 of the Commission’s Rules of Practice” on January 19, 2024.  That rule provides that:

An action made pursuant to delegated authority shall have immediate effect and be deemed the action of the Commission. Upon filing with the Commission of a notice of intention to petition for review, or upon notice to the Secretary of the vote of a Commissioner that a matter be reviewed, an action made pursuant to delegated authority shall be stayed until the Commission orders otherwise. . . .

As it stands, the change has been indefinitely…

Vice Chancellor Laster recently requested information from litigants in Seavitt v. N-able, Inc. with this letter.  According to the complaint:

Plaintiff brings this action because N-able is presently flouting this foundational principle of Delaware law through a contractual arrangement designed to entrench and perpetuate certain favored stockholders’ control over N-able’s business and affairs. Specifically, in violation of DGCL Section 141(a), N-able has provided certain favored stockholders—affiliates of the private equity firms Silver Lake Group, LLC (“Silver Lake”) and Thoma Bravo, LLC (“Thoma Bravo,” and together with Silver Lake, the “PE Investors”)—with a contractual power to control the most important decisions and functions properly entrusted to the Company’s Board under our corporate system.  

. . . 

Third, in violation of DGCL Section 141(k) and in further derogation of the stockholder franchise, N-able has adopted an invalid provision in its operative Amended and Restated Certificate of Incorporation (the “Certificate”), purporting to provide that as long as the PE Investors own in the aggregate 30% of the voting power of the Company’s outstanding shares, “directors may be removed with or without cause upon the affirmative vote of the [PE Investors]. . .” This provision violates DGCL Section 141(k), which

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Senator Sanders recently released the Majority Report for the Senate’s Health, Labor, Education, and Pensions Committee.  That report has some grim findings about American retirements.  About half of people 55 and older have no retirement savings.  As we all know, defined-benefit pensions have become increasingly rare.  Unfortunately, defined-contribution pensions are often unavailable for a huge chunk of the workforce.  About 50 million workers don’t have a way to save for retirement through their payroll.

The report and its figures has to be part of any conversation now about how to think about efforts to improve the quality of financial advice and retirement savings.

There is much more in the report than this quick summary, and if you write or think about retirement issues, you should check it out.

Vice Chancellor Laster has issued his opinion in the TripAdvisor case.  I’m still digesting it, but the overall framework does not surprise me.  As I can’t improve on the opinion’s recitation of the basic factual situation, here it is:

A Delaware corporation has two classes of stock. The CEO/Chair owns highvote shares carrying a majority of the outstanding voting power, giving him hard majority control. The board decides to convert the Delaware corporation into a Nevada corporation, and the CEO/Chair delivers the necessary stockholder vote. The board does not establish any protections to simulate arm’s length bargaining. The conversion is not conditioned on either special committee approval or a majority-ofthe-minority vote.

A stockholder plaintiff challenges the conversion.1 The plaintiff argues that Nevada law offers fewer litigation rights to stockholders and provides greater litigation protections to fiduciaries like the directors and the CEO/Chair. The plaintiff alleges that the directors and the CEO/Chair approved the conversion to secure the litigation protections for themselves. In support of those assertions, the plaintiff cites the materials the board considered, disclosures in the company’s proxy statement, the work of distinguished legal scholars about the content of Nevada law, and public statements by Nevada policy makers about

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