Uncategorized

Subscribe to Uncategorized via RSS

I’ve previously blogged about the battle to muzzle proxy advisor services with new regulations, including posting a summary of the SEC’s roundtable on the subject, a discussion of the (lack of) existing regulation, comments on the SEC’s withdrawal of two no-action letters concerning the use of such services.

This week, we have a bit of new news.  First, the SEC announced that Commisioner Elad Roisman will be spearheading efforts in this area.  That matters because, as I previously observed, Commissioner Roisman seems particularly sympathetic to the idea that firms should have an opportunity to review and comment and/or correct proxy advisor recommendations.   So I’m guessing that’s something the SEC is going to propose.

Second, NASDAQ, Inc. – along with many other public companies (not all of which are NASDAQ companies, btw) – submitted a letter to the SEC requesting various changes to the proxy rules, including more regulation of proxy advisors.  And the first thing I’ll note about the NASDAQ letter is that it’s nine pages long – 1.5 pages of text, and the rest is just a list of signatories. 

I also notice that NASDAQ’s proposals are quite similar to those that were included in…

Rory Van Loo (@RoryVanLoo) recently posted a new article exploring how automated personal assistants increasingly influence consumer purchasing decisions.  As these digital intermediaries play an ever-larger role, we need to think more about how protecting consumers requires protecting these digital intermediaries.  He opens with an example showing how a digital assistant may soon be able to efficiently shift consumer purchasing:

Siri. As part of my regular monitoring of your spending, I have located an opportunity to save money on your phone bill and on your grocery bill each month. Would you like to hear more?

Consumer. Tell me about the phone bill.

Siri. Based on your monthly data usage and the performance of the networks where you spend most of your time, you can receive comparable service through Sprint at $140 less per year. Let me know if you want to hear more. Or, if you would like me to switch your account, place your thumbprint on the phone.

Although some might fear the arrival and widespread adoption of this technology, I’d be thrilled.  Sure, I could puzzle through Project Fi, Sprint, and Verizon to find the optimal deal, but my time has real value and I cannot…

…

I teach in the Energy Management Program at the University of Oklahoma, which was “the first of its kind” and recently celebrated its 60th Anniversary Diamond Jubilee.  Last spring, the title of a book in the office’s library caught my eye: Just Because You Can Doesn’t Mean You Should. The importance of prudence, a sensible and careful attitude when you make judgements and decisions; behaviour that avoids unnecessary risks, is often underappreciated, particularly in the area of financial market innovation.  Intrigued, I borrowed the book and began to read.  Although I’d never spoken with its author, Mike S. McConnell, I’d seen him in attending the Program’s Board of Advisors Meetings. 

The book’s Introduction has a great quote that I’ve now used in both classroom and lecture settings: “We did things because we could do them – not because we should do them.  I think Enron crossed the line between “could” and “should” and never actually saw it.  Moreover, it happened at many levels, from matters with the Board to our contention that “gray” financial structures were within the rules.  These structures may have been within the rules, but I’m not sure that means we should have used…

It’s a crazy time for me right now, so this week I just offer five feature articles that I read last year, each of which did a business-related deep dive that, for one reason or another, had my jaw-dropping (and in more than one case, had me laughing out loud).

Josh Dzieza, Prime and Punishment: Dirty Dealing in the $175 Billion Amazon Marketplace. On the dirty tricks sellers use to sabotage their rivals and the quasi-court system Amazon has created to handle complaints.  Compare, by the way, to Molly Roberts on Facebook’s proposal for its own Facebook court.

Taffy Brodesser-Akner, How Goop’s Haters Made Gwyneth Paltrow’s Company Worth $250 Million.  One of the things that struck me here was where the author points out that women’s health concerns are often dismissed by doctors, which might drive them to seek help from nontraditional sources.  I’ve heard a similar explanation for the anti-vaxx movement – pregnant women are objectified and ignored by the medical establishment, which drives them to reclaim some kind of agency by rejecting that establishment entirely.

Elizabeth Evitts Dickinson, A Dress for Everyone: Claire McCardell took on the fashion industry — and revolutionized what women …

Last week I participated in the LawWithoutWalls kickoff in Segovia, Spain. LWOW, as it’s affectionately called, originated at the University of Miami and is the brainchild of Professor Michele DeStefano. Although I’ve served as a mentor since its inception, I’ve attached  LWOW’s summary of the program: 

Over the course of 16 weeks, each team co-creates a Project of Worth: a business case and practicable solution to a real problem sponsored by a corporate legal department, law company, or law firm. In the process, the program refines the skills of those involved, recharges the law market with innovations across business, law and technology, and revitalizes relationships with colleagues, clients, and future talent across the globe.  

 

Law and business students from 35 schools around the world work together virtually (other than the kickoff) and learn about branding, business plans, legal tech, and marketing from some of top minds in the world during weekly webinars. This year’s topics include:

  • Team A: Waste Not, Want Change: How can advances in technology further a reduction in food waste? (Sponsored by Accenture) 
  • Team B: Organizing Chaos: How can distributed ledger technology facilitate advances in identification management in the foster care system? (Sponsored by

…

On February 15, the Washington & Lee Law Review will host a one-day symposium on the intersection of Civil Rights and Shareholder Activism.  In March of 1968, a civil rights organization, the Medical Committee for Human Rights, received five shares of Dow Chemical Company stock as a gift.  Well-known for its work deploying doctors and nurses on the front lines of civil rights protests across the American South, MCHR had no track record of shareholder activism.  Within a year, however, MCHR had initiated its first shareholder proposal to stop Dow from manufacturing and selling napalm for military use in the Vietnam War.  The activism campaign advanced MCHR’s commitment to civil and human rights, but it also represented an important innovation in shareholders’ use of corporate governance tools. The civil rights group had catalyzed a movement: shareholder activism campaigns on pollution, minority hiring, and apartheid were quickly brought by other shareholders at major U.S. companies like General Motors and Honeywell, Inc. and, over the decades, numerous other campaigns have followed.

Fifty years later, shareholder activism on ESG matters is surging. In the 2019 Proxy Season, companies will face shareholder campaigns on economic inequality, human rights, discrimination on the basis of race, gender…

…

Yesterday, I had the honor of participating in a symposium organized by the University of Pennsylvania Journal of Business Law, in collaboration with the Center for the Study of Business Ethics, Regulation, & Crime at the University of Maryland (C-BERC), on Harmonizing Business Law.  It was a well-organized, engaging, and informative event.  It also introduced me to some great research that I plan to highlight today and in future posts.  

I’ll keep this first look brief as I traveled all day and I want to circle back to this topic later once I learn more.  Gideon Mark, Associate Professor and Associate Director of C-BERC at the Robert H. Smith School of Business at the University of Maryland, discussed Spoofing and Layering, noting the minimal attention these topics have received in business law scholarship.  If you’re like me, you’re probably vaguely aware of these concepts, but couldn’t provide an elegant definition on your own.  Let me help.  Section 747 of Dodd-Frank, which amends the Commodity Exchange Act to prohibit disruptive trading practices, terms “bidding or offering with the intent to cancel the bid or offer before execution” to be spoofing.  Layering is a specific type…

Like everyone else, it seems, I decided to watch the dueling Fyre festival documentaries on Hulu and Netflix.  (If you don’t know what I’m talking about, read this.)  At first, I had moral qualms about it because they’re each a bit skeevy, in their own way: the Hulu one paid Fyre’s organizer, Billy McFarland, to sit for an interview – so he profits from it – and the Netflix one was produced by the same media team that promoted the Fyre festival.

Then I reminded myself that I don’t, ahem, actually pay for Netflix or Hulu, and I felt much better.

I’ve read a lot of reviews of the two films and most of them seem to prefer Hulu’s.  I myself prefer Netflix’s.  The Hulu documentary was a lot lighter on the specifics of how the disaster unfolded, and a lot heavier on trying to make a broad claim about “millennials” being in thrall to social media and influencers, a claim that I found facile.

My interest was more in the technicalities of how this kind of massive fraud is perpetuated, how people go along with it, and that’s what Netflix’s documentary is about.  We get a lot of interviews with people who were involved with the project – including the residents of the Bahamian island where the festival occurred – and we get a clearer picture of what happened. 

[More under the cut]