Earlier today, a number of law school securities clinics met online with the SEC thanks to its Office of the Investor Advocate to talk about what they have been seeing in their cases. By the most recent count, we’re down to only about 12 securities clinics nationwide. Jill Gross has written about these disappearing clinics. In my role, I teach business organizations, securities regulation, professional responsibility, and also offer a clinic from time to time. At UNLV, clinics are not always offered every semester because our faculty also teach other courses. With the need to turn a clinic on and off, I can’t run the kind of investor protection clinic I ran when I was at Michigan State because the cases just don’t wrap up in a semester. Although we’ve done it in the past at UNLV with good results for clients and students, it’s not something that works well without attorney support to carry the cases and provide broader assistance when we’re not in session. With that in mind, we’ve offered a “Public Policy”clinic here this semester with a focus on helping non-profits in preparing comment letters and advocating for their own goals. This new offering focuses mostly on
Cleaning Corporate Governance
Four leading scholars (Jens Frankenreiter, Cathy Hwang, Yaron Nili, & Eric Talley) recently released a new paper, entitled Cleaning Corporate Governance. This is the abstract:
Although empirical scholarship dominates the field of law and finance, much of it shares a common vulnerability: an abiding faith in the accuracy and integrity of a small, specialized collection of corporate governance data. In this paper, we unveil a novel collection of three decades’ worth of corporate charters for thousands of public companies, which shows that this faith is misplaced.
We make three principal contributions to the literature. First, we label our corpus for a variety of firm- and state-level governance features. Doing so reveals significant infirmities within the most well-known corporate governance datasets, including an error rate exceeding eighty percent in the G-Index, the most widely used proxy for “good governance” in law and finance. Correcting these errors substantially weakens one of the most well-known results in law and finance, which associates good governance with higher investment returns. Second, we make our corpus freely available to others, in hope of providing a long-overdue resource for traditional scholars as well as those exploring new frontiers in corporate governance,
Chatman & Peters on Academic Hiring
Carliss Chatman and Najarian Peters recently posted The Soft-Shoe and Shuffle of Law School Hiring Committee Practices, which is forthcoming in the UCLA Law Review Discourse. The piece presents their perspective on the hiring process for legal academics and how many students currently experience the academy. Since it was posted, it has averaged well over a hundred downloads a day.
The abstract also captures attention:
“We have too many Black and Brown faculty,” said no one ever in any law school. Each year we sit in appointments discussions and hear the same things. The classics-oldies but goodies from appointments committees are:
“We can’t find any qualified Black candidates.”
“There weren’t any in the Faculty Appointments Register (FAR), we scoured websites and emailed our Black friend yet found no one.” One of our colleagues actually lifted a large binder filled with leaflets from the FAR from one year over her head with both hands and waved it side to side to punctuate this very point in a faculty meeting. Everyone around the room including the Brown and other non-white faculty shook their heads in agreement co-signing. Seeing this made one of us wonder whether the FAR binder was some kind
Statutory vs. Regulatory Exemptions
Nevada legislators recently introduced legislation to create a statutory exemption from licensure for the investment advisers for certain qualifying private funds. The language appears nearly identical to the model regulation released by the North American Securities Administrators Association (NASAA). Notably, NASSA explained that its regulatory approach would be “contingent in many respects on how the SEC moves forward on implementation in this area. Consequently, if the SEC makes significant alterations to its proposals NASAA may be required to reevaluate the provisions in any proposed model rule or rules.” Nevada’s own Securities Division also recently released a proposed regulatory update which includes NASAA’s model regulatory exemption.
There are really two questions here. The first is whether an appropriately tailored exemption from licensing requirements should exist for certain private funds. Nevada’s own securities regulators support the exemption and included it in their draft regulations. As it stands, putting the exemption into place does not require the Nevada Legislature to do anything. The exemption appears highly likely to be embodied in the final regulatory code at the conclusion of the ordinary regulatory process. I filed a comment letter on this with the Nevada legislature and have reviewed the letters filed by supporters of
More Comments on Expungement Rulemaking
Amid the transition, the SEC continues to oversee rulemaking on expungement. I gave some initial thoughts in my last post before putting another comment letter together. FINRA does deserve some real credit for attempting to improve the process. Still, you shouldn’t have much confidence in the overall system because it’s not built in a way that is likely to surface relevant information for the arbitrators making the only meaningful decisions in the process. Today, if you find out a broker had an expungement, all you really know is that the broker is three times as dangerous to you as the average broker. You should probably just avoid doing business with the broker. It’s hard to see how winning expungements in the current system would cause rational and well-informed investors to trust a broker if they knew about the expungement.
Under the current rules and the Amended Proposal, arbitrators will continue to apply inconsistent evidentiary standards before recommending expungements. My initial letter showcased an arbitrator using a preponderance standard. This second one presented another one who concluded that something more than a preponderance standard must apply. Despite the inconsistent standards already being applied within its forum, FINRA has declined to articulate
New Book | Companies Are People Too
Carliss Chatman has a new book out aimed at an audience aged six years old and up. It’s called Companies Are People Too and available on Amazon now. I’ve sent copies to all my nieces already. It’s accessible and helps explain the role companies play in our society. If you’re a business lawyer looking for a way to help explain what you do, this can provide a great entry point. It’s currently #1 on Amazon in Children’s Money Books.
Hiring Announcement — Stanford Corporate Governance Teaching Fellow
Teaching Fellow – Corporate Governance and Practice LLM, Stanford Law School
Stanford Law School offers multiple specialized LLM programs to international students who have practiced law outside the U.S. The Corporate Governance and Practice LLM program admits approximately 20 students annually. Working under the supervision of Professor Michael Klausner, the Faculty Director of the program, the Teaching Fellow will assume significant academic, advising, and administrative responsibilities for these students. Applicants for this fellowship are sought for a two-year commitment, starting in summer 2021.
The Teaching Fellow will be responsible for teaching two courses: one on corporate law from an economics perspective; and another on corporate law practice. The latter course will include outside speakers from practice. The fellow will also organize other academic and social events, and will be responsible for managing the Corporate Governance and Practice LLM program on a day-to-day basis, advising LLM students on academic and career issues, responding to inquiries from prospective LLM applicants, screening and admitting applicants, and interacting with faculty in support of the LLM program goals and needs. The fellow will have the support of and work with the Associate Dean for Graduate Programs, the Associate Dean for Student Affairs, the Executive Director of the International
“How Big is Our ‘Us’?”
Recently, I listened to the NPR Hidden Brain’s podcast titled “Playing Favorites: When Kindness Toward Some Means Callousness Toward Others.”
This podcast hit on topics that I have been thinking about a good bit lately—namely selfishness, giving, poverty, family, favoritism, and a culture of “us against them.” This post only has the slightest connection to business, so I will include the rest of the post under the break.
Teaching Moment: LLCs Don’t Have “Corporate” Name Endings
I am teaching Business Associations this summer, and I am excited to get back in the classroom. Well, I was. Instead, I am teaching in virtual class room via Zoom. I am still glad to be interacting with students in a teaching capacity, but I sure miss the classroom setting. I am glad, though, to have this experience so I am closer to what this has been like for our students and faculty. I still have the benefit of my colleagues experiences, students who have been in the online learning environment, and a little time to plan, so it’s better for me than it was for everyone in March. Still, there is quite a learning curve on all of this.
Over the past several years, I have asked students to create a fictional limited liability company (LLC) for our first class. It does a number of things. To begin, it connects them with a whole host of decisions businesses must make in choosing their entity form. It also introduces them to the use of forms and how that works. I always give them an old version of the form. This year, I used 2017 Articles of Organization for a West
Dear Students
This has been quite a first year as a dean. Heck, it’s been quite a year for all of us.
I woke up (very) early this morning, and it struck me that I hadn’t been in contact with our students since Friday, which was our last day of classes. I don’t want to be a distraction to their studies, but I also realized the midway through the first week, they might need a reminder of what they have accomplished in the face of unique and unprecedented challenges. Following is the note I sent our students, which I share for all of us who might need a reminder of what we’re accomplishing. It is addressed to our Creighton Law students, but it’s for all law students. Hang in there.
Dear Students,
It’s the middle of the first week of what has to be the strangest finals we have ever experienced. This is always a time of hard work, long days, and high stress, but never before have we had to be so separate while going through it. We can’t experience study group or lunch breaks with friends, or play basketball or soccer in a group to blow off steam.