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Mosaic Dialogue Series
13D Filing Requirements: Time is of the Essence

There has been significant controversy surrounding the required disclosures by investors acquiring a 5% stake in public companies. Under current law, investors must disclose ownership of 5% or more within 10 days. Many issuers are in favor of shortening this disclosure window, with some favoring reporting as soon as one business day after the 5% threshold is crossed. They argue that the 10 day reporting lag deprives the market of material information and can facilitate market manipulation. Shareholders argue that shortening the disclosure window effectively allows issuers to set a ceiling on the number of shares an activist may acquire. Furthermore, at some companies, a poison pill can be triggered if the 5% threshold is crossed, preventing additional accumulation of shares by an activist investor.

Should the current 13D filing requirements be amended? Does the 10 day lag result in activists obscuring their actions? Would shortening the window assist issuers in preventing accumulation of shares by investors seeking change? Join us as we answer these questions and others on this important and timely topic.

Speakers:

Andrew M. Freedman, Partner, Olshan Frome Wolosky, LLP
Kai Haakon E. Liekefett…

There have been a few recent articles in the news discussing diversity – or its lack – among lawyers.

First, Deborah Rhode writes in the Washington Post that law is one of the whitest professions.  People of color make up one fifth of law school grads but only 7 percent of law firm partners – and those numbers drop to 2 or 3 percent in BigLaw.  She argues that among other barriers, unconscious bias still plays a role in hindering the advancement of African American lawyers.  She also points out that women, as well, struggle to make partner – perhaps reflecting the difficulty that women have walking the tightrope of being aggressive enough to do their jobs, but not so aggressive that they come off as unfeminine.

Picking up on these themes, the American Lawyer recently published a report on how BigLaw is failing women.  Sometimes, these failures are attributed to demanding work schedules that make it difficult for women to shoulder responsibilities for childcare – which is why one law firm was recently profiled in the New York Times for hiring mainly women, and allowing them to adjust their schedules around their parenting responsibilities.  But flexible work schedules…

Greetings from Havana. I spent 3 days last week with the Florida bar learning about the Cuban legal system and foreign investment from local and Canadian lawyers and a Cuban-based American reporter. I have spent the past several days looking at art from over 40 countries at the Biennal. My internet is spotty and I’m typing this on my phone so please excuse any spacing issues. Only 5 percent of people have internet access so a hotel lobby is prized real estate.
Over the next few months I will be researching about Cuba, foreign investment, and the human rights implications. I have a particular interest in this because for many years pre-academy I had to ensure that my former company and its subsidiaries did not violate the law by doing business with Cuba. Although the embargo is still in place, more and more US companies are applying every day for OFAC licenses to enter the Cuban market.
If you have any insight/opinions on the pros/cons of bilateral investment treaties (there are already dozens with Cuba), whether Cuba will follow the VietNam model for modernizing its economy, or whether foreign investment can spur human rights reforms or just perpetuate the status…

Non-lawyers think lawyers love to talk, that it’s almost impossible to get them to shut up. Unfortunately for those of us in legal education, that stereotype doesn’t fit most law students.

It is difficult to get many law students to talk in class. Discussions are often dominated by just a few students, known to their peers as “gunners.” Many law students, including some of the brightest, won’t participate in class unless you force them to.

I have struggled with this issue throughout my teaching career, fighting to get all of my students actively involved in class, because the research clearly shows that active participants learn more.

Jay Howard, a sociology professor and dean at Butler University, has just written a book I wish I’d had when I began teaching. The book, Discussion in the College Classroom: Getting Your Students Engaged and Participating in Person and Online, is aimed at professors teaching undergraduates, but much of what Howard has to say applies equally to law students.

According to Howard, the problem arises in part from a mismatch of norms—students and professors have different expectations.

  • Professors want students to pay attention. Students pay what Howard calls “civil attention,” showing external cues

…

Section 10(b) of the Securities Exchange Act prohibits anyone from engaging in manipulative or deceptive activities in connection with a securities transaction.  Rule 10b-5, promulgated under Section 10(b), prohibits anyone from “mak[ing] any untrue statement of a material fact” or “omit[ting] to state a material fact necessary in order to make the statements made… not misleading” in connection with securities transactions.

Recently, several Section 10(b) lawsuits have been filed alleging that companies hired stock promoters to pen enthusiastic articles about the companies’ prospects.  The lawsuits were apparently inspired by an exposé published at Seeking Alpha regarding stock promoter practices.  The CEO of one of the companies involved was ultimately arrested on charges of criminal securities fraud, both for hiring promoters, and for more garden variety manipulative practices.

In all of these cases, the promotional articles did not disclose that they were paid promotions, nor did they accurately disclose their authorship.  Instead, they were either published under colorful pseudonyms like “Wonderful Wizard,” and “Equity Options Guru,” or under more mundane fictional attributions, such as “James Ratz.”  (A name certainly likely to inspire trust….). 

These cases raise a number of interesting technical questions regarding the scope of Section 10(b), not the least of which is, can the plaintiffs get around Janus?

[More under the jump]

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.
          -John McCrae, In Flanders Fields

Today is Memorial Day. Before you run to the beach or the park, or wherever you’re spending the holiday, take a moment to remember those dear soldiers who have fallen. They won’t be going to the beach or park today. They gave their lives so you could live.

You may think, as I do, that some of our more recent battles were better not fought, but that doesn’t make the sacrifices of the soldiers who fought in them any less noble or honorable. The loss of life is even more tragic or regrettable when stupid politicians needlessly…