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Today, in honor of my Dad, my father-in-law, my cousin, my administrative assistant, many friends, and others who have honored us with their military service, I am posting a link to a recent episode of The Home Team with Jared Allen’s Homes for Wounded Warriors.  The episode features an interview by my former student, Betty Rhoades, of one of my new military buddies, Captain Chris Davis, USMC.  Chris is a 3L at UT Law and a super guy.  He founded a nonprofit last year, Vols for Vets, of which I (and others) are very proud.

Thanks to all who have served in our armed forces for helping to protect us from enemies far and near.  Your service is to be honored and cherished.  We thank you for our lives and our freedom.

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Jonathan Macey and Joshua Mitts have just posted an intriguing new article, Asking the Right Question: The Statutory Right of Appraisal and Efficient Markets, regarding calculation of value for the purposes of an appraisal action.

As I’ve posted about previously (here and here), Delaware is in the midst of a judicial reinterpretation of its appraisal statute, placing new emphasis on market pricing for determining the value of publicly traded stock.  Currently, one open question is whether “market” pricing refers to the deal price, assuming the process was relatively clean, or the unaffected trading price of the stock. 

Macey & Mitts begin by agreeing with VC Laster’s opinion in Verition Partners Master Fund, Ltd., et al. v. Aruba Networks, Inc., that valuation should be based on the trading price, and not the deal price, and their discussion after is where things get interesting.

First, they point out that apparently, Delaware courts only will consider trading price relevant to an appraisal action if price is efficient.  But they argue that even prices of stock that trades inefficiently would serve as a better indicator of value than more traditional calculations like discounted cash flow, in part because there are…

The Theranos collapse and Elizabeth Holmes’ indictment makes me wonder about what investor biases may have played a role in allowing Theranos to operate as long as it did.  In an op-ed in The Hill, Ann McGinley and I point out that it might have been her seemingly deliberate projection of an idealized masculinity:  

Presenting the right identity may unlock millions in funding and bypass close, critical reviews. Consider Elizabeth Holmes, the recently indicted founder of Theranos. Flanked by a board sporting retired military officers, she presented herself as a masculinized take on the Steve Jobsian ideal — aping his wardrobe choices with a black turtleneck sweater.

Her costume was often complimented by a blazer’s broad shoulders, and she spoke with a startlingly deep voice.  The presentation exuded a hard-charging masculinity, allowing backers to see her as a Jungian fantasy of Jobs’ second coming. 

The op-ed ties back to the bigger law review article discussing the ways in which a bias toward favored identities causes founders to perform their and their entities’ identities to please sources of capital. 

Gender bias (and other forms of implicit bias) likely does more than just raise capital costs for founders.  It also seems to saddle…

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Yesterday, I had the pleasure of participating in Case Western Reserve Law Review Conference and Leet Symposium, Fiduciary Duty, Corporate Goals, and Shareholder Activism.  It was a fun and lively set of discussions with some interesting themes that hit right in my sweet spot of interests, so I had a wonderful time.  I’ll give a brief synopsis of the topics under the cut, but the entire thing will soon be available as a webcast online at the above link, and next year the law review will publish a special symposium issue.

Also, I just apologize in advance if I misdescribe anyone’s remarks – if you see this post and want to correct me, feel free to send an email.

[More under the jump]

The SEC’s influential Investor Advisory Committee has just released new recommendations for the SEC as it continues to move forward with its effort to raise the standard for investment advice given to retail customers.  Although the entire recommendation is worth reading, it highlights the special importance of making sure that account-type recommendations fall within the rule.  As it currently stands, the proposed regulation does not apply to initial recommendations about what kind of account a customer should select.

The Committee described the issue’s critical importance:

Some of the most important decisions investors make arise at the outset of the relationship, before they receive recommendations regarding specific transactions. These include decisions about whether to roll money out of a retirement account and into an IRA, what type of account to open (where the firm has more than one account type available), and the scope of services to be provided. Those central decisions, generally made at the beginning of a brokerage or advisory relationship, set up the contours of the relationship. They will often have a far greater impact on the investor than subsequent recommendations regarding which specific securities to invest in.

Rollover recommendations, for example, are frequently provided at a critical

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