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A while back, I wondered whether we could expect to see a federal securities fraud lawsuit filed over the Dole Food merger. If so, it would be that rarest of animals – a Section 10(b) claim predicated on the allegation that the defendants intentionally manipulated prices downward rather than upward.

Well, wish granted. A couple of days ago, my old law firm (I swear I had nothing to do with it!) filed a complaint in the District of Delaware alleging that Dole Food, Murdock, and Carter intentionally drove down Dole’s stock price to facilitate Murdock’s buyout. The complaint doesn’t explain the legal theories, but it seems to be setting up a claim that – because Carter was the only one who directly made false statements – he was acting as Murdock’s agent when doing so . See, e.g., ¶38 (“With Carter able to serve as Murdock’s mouthpiece, Defendants effectuated Murdock’s buyout of Dole on the cheap.”).  Apparently, the federal plaintiffs were waiting for a resolution to the state claims before filing their own action.

I’ve flogged this horse before (is that even a metaphor?) but these kinds of parallel lawsuits (especially when considered in conjunction with…

Do we have to go back to the creation of LLPs to remember a time when an organizational form was so much in the news?

First, as my co-blogger Joshua Fershee pointed out, news of Mark Zuckerberg’s investment/charitable/political vehicle, the Chan Zuckerberg Initiative LLC, has been making headlines over its structure. 

Beyond that, however, the New York Times has run a couple of stories now on the growing use of LLCs in the real estate market – both to hide the identities of wealthy foreign investors in Manhattan property and perhaps skirt bank secrecy laws, and to shield the identity of fraudsters who scam people out of the deeds to their houses. As a result, New York is imposing new requirements for disclosure of LLC members involved in real estate transfers.  And this report from the Sunlight Foundation highlights how the minimal disclosure requirements for LLCs has made them a popular tool for obscuring the origin of political donations.  It seems there might still be a few kinks to work out in the form, although if jurisdictions go the way of NYC, we’ll see patchwork disclosure requirements that apply only within specific areas.

In any…

The New York Times DealBook has a fascinating piece on the relationship between JPMorgan Chase and one of its former brokers, Johnny Burris. After Burris complained publicly about JPMorgan’s sales practices, he was terminated and customer complaints began to appear in his regulatory files. Some of the “complaining” customers now say they had no problems with Mr. Burris. One of the customers who allegedly filed a complaint can’t even read or write. And it appears that JPMorgan was involved in drafting at least some of the complaints.

Definitely worth reading.

Thanks to Greg Day, assistant professor of economics and legal studies at the Spears School of Business at Oklahoma State University, for joining us as a guest blogger for the month of November.

Greg’s posts are collected below and his scholarship is available here:

Following up on Arbitration and Human Rights

Cobras and Housing Markets

Do Sophisticated Parties Really Prefer the Freedom of Contract?

And Now Another Corporate Inversion–And More Corporate Inversion Restrictions

Hillary Sale and Robert Thompson have published a new article to SSRN discussing the role of 10b-5 class actions, and, in particular, how private class actions function to protect the goals of securities regulation more broadly, including investor protection and general confidence in U.S. securities markets.  One of their key insights is that the concept of market efficiency is critical both to the current system of regulation, and to the 10b-5 class action – and that there is a basic hypocrisy when large, publicly-traded issuers take advantage of the concept of market efficiency to reduce their regulatory disclosure burdens while simultaneously arguing against market efficiency to defeat securities claims.  They contend the presumption of reliance – and what should be a very narrow space for defendants’ rebuttal of price impact, thus allowing classes to be certified – fits well with the class action’s role in protecting markets.

I agree with their thesis generally, namely, the role that securities class actions play in policing markets, rather than as a direct system for compensating defrauded investors.  In fact, I argued in a recent paper that courts have altered their definitions of organizational scienter to account for the changing role of the securities…

It’s Thanksgiving, which means it’s time to do Christmas shopping. No, that’s not it. I’m sure Thanksgiving is supposed to be about more than that. Food? Football? No, there’s something else. It’s on the tip of my tongue; I just can’t quite remember. . . . . . . . .

Oh, yeah: being thankful.

I’m thankful for many things, but I want to use this column to thank some of the people who have touched my professional life.

First, thanks to my co-bloggers (in alphabetical order): Josh Fershee; Joan Heminway; Ann Lipton; Haskell Murray; Marcia Nanine; Stefan Padfield; and Anne Tucker. Their blog posts are always interesting and informative, and usually, I have to admit, better than anything I write. But, if you think their blog posts are good, you ought to see the incredible behind-the-scenes e-mail conversations we share. I have learned a lot from each of them. Believe it or not, I’ve only met two of them in person, but I’m happy to have all of them in my academic life.

Second, I’m thankful for my colleagues here at the University of Nebraska—well, most of them anyway. All of them are deserving of thanks—if for nothing else…

GIVING-THANKS

Last year, in my first Thanksgiving week post, I gave public thanks for my students. I could just as easily have done that again this year.  My students continue to impress and inspire me.  And that is certainly something to be grateful for–year in, and year out.

This year, however, I also want to acknowledge my thanks for all of the special colleagues I have in the academy (and yes, fellow BLPB editors, that includes you!) and the bar that make my job complete.  When I have needed assistance, support, or just a good laugh, it is my fellow law peeps–and especially my business law peeps–to whom I most often turn and on whom I almost always rely.

You, my law teacher and lawyer friends, have:

  • read and edited my early syllabi, exams, and assignments, preventing me from making mistakes that new law professors often make;
  • taught my Business Associations class when my mother was dying so I could be by her side;
  • helped my son learn about e-discovery and various types of law practice so that he could launch his career;
  • provided assistance to my Corporate Finance students when they needed specialized guidance or advice on their planning and

…