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My last post on the Corporate Transparency Act (the “CTA”) was just more than a month ago. What a difference a month makes! It seemed like every time I sat down to write an update, something changed . . . . As I head off to the Association of American Law Schools annual meeting in San Francisco, I thought I would offer a quick set of links for you to enjoy if you want to briefly catch up. You can find a nice summary here. But the essence is as follows.

Following the nationwide injunction prohibiting enforcement of the CTA early last month, the U.S. government appealed. On December 23, a motions panel of the United States Court of Appeals for the Fifth Circuit granted the government’s emergency motion for a stay pending appeal. The court’s order also expedited the appeal to the next available oral argument panel. On December 26–a mere three days later, the Fifth Circuit vacated that stay, reviving, in effect, the U.S. District Court’s nationwide injunction against the government’s enforcement of the CTA. Got that? (Feel free to read it again.)

On December 31 (happy new year!), the U.S. Solicitor General applied to…

Thing One:  SEC Commissioner Mark Uyeda recently posted this dissent regarding an SEC enforcement action against Cantor Fitzgerald. The action accused Cantor Fitzgerald of taking SPACs public while already having begun to have substantive negotiations with potential merger targets.  Commissioner Uyeda argues that in the context of SPACs – which are designed to merge with someone eventually – preliminary negotiations with targets should not be considered material until they are close to reaching binding contract.

John Jenkins at Deal Lawyers Blog points out Uyeda’s views may be more representative of what we can expect from the incoming administration.  And I particularly note as much because (as Uyeda mentions) the SEC settled an enforcement action against Digital World Acquisition Corp. for failing to disclose discussions with Trump Media before the DWAC IPO. 

Notably, the case against Patrick Orlando, the former DWAC CEO, was filed last year and continues to be litigated. 

Thing Two: I was fascinated by this Bloomberg story about ATIC, the main insurance company for taxis/rideshares in New York, which recently was declared insolvent. (Anyone who teaches Walkovsky v. Carlton can’t help but be interested in NYC taxi insurance regulation.)

Anyway, the main takeaway…

Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders … shall be the Court of Chancery of the State

…

Hennion and Walsh, a FINRA member firm, has taken an unusually aggressive position, claiming that because it has procured expungements through the FINRA forum, members of the public cannot discuss the underlying conduct. A cease and desist letter sent to a law firm claims that the firm “posts information relating to Hennion and Walsh, Inc. and its’ [sic] employees which has been found to be false and has been ordered to be expunged.” The letter goes on to claim, without authority, that it’s “illegal to provide a false statement . . .of an individual’s character and/or reputation” and that unspecified “relevant records reflect the information you have posted for public consumption has been deemed to be false, was ordered to be expunged and that order has been confirmed in a court of competent jurisdiction.”

The letter doesn’t specify exactly what statements it wants removed, but I presume it’s blog posts or other things featuring news of past Hennion and Walsh settlements or complaints against Hennion and Walsh employees. These are all fairly typical things for a plaintiff-side firm to post. If one investor has filed or settled a claim against a particular broker, there may be other aggrieved…

In law school, students take a professional responsibility exam and then take the MPRE exam. After graduation, they sit through (often boring) continuing legal education courses and try to get that precious ethics credit.

I don’t teach professional responsibility anymore, although I do speak about ethics in my Compliance, Corporate Governance, and Sustainability and my Business and Human Rights courses.

But as business professors, I’m not sure that we spend enough time talking about business ethics. Yes, it’s important to know about conflicts of interests but do we know how to advise our business clients on the issues that affect them?

I get to flex my “ethics” muscles in an interdisciplinary Innovation, Technology, and Design program housed in our School of Engineering, where I teach a course on Ethics, Equity, and Responsibility- basically Ethics and Technology.

They say grading is the worst part of being a professor.

But not this week.

My students in the ITD class brought me to tears reading their final exams.

I was impressed by their projects on regulating technologies like social media, cloning, AI, and robotics, and by their business plans and pitches for new innovations.

I would invest in some of them today if…

If you’re a law professor, please consider sending a team to Miami on January 16th for the University of Miami’s inaugural contract drafting and negotiation competition.

We have slots for 4 more teams and there is no registration fee due to the generosity of our sponsors, Law Insider and SimpleDocs. We are excited to welcome students from the University of Miami, William & Mary, SMU Dedman, St. Thomas (Miami), and North Carolina Central University.

We will award $5000 in cash prizes and students will be in beautiful Miami, Florida in January. What more could you want? We will hold registration open until December 20 or until we fill the slots.

Key dates are below:

Saturday December 21, 2024:

8:00am: Written Round prompt release

Monday January 13, 2025:

5:00pm: Deadline for Written Round contract submission.

8:00pm: Release of Negotiation Round 1 prompt.

All required in-person events will be held at the Newman Alumni Center

6200 San Amaro Dr, Coral Gables, FL 33146

Thursday January 16, 2025

3:00-4:00pm: Registration and Check In

4:00-5:20pm: Negotiation Round 1

5:30-7:00pm: Networking Reception

7:30-10:00pm: Dine Around Dinners

10:00pm: Negotiation Round 2 prompts released.

Friday January 17, 2025

8:30am-10:00am: Continental breakfast available

9:00am-10:00am: Registration and Check In…

In my previous post on a November 7th Society of Corporate Compliance and Ethics (SCCE) panel on ESG through the life cycle of a business, I outlined the shifting landscape of ESG in the wake of recent regulatory and social developments in the U.S. This follow-up provides more detail on the insights shared by my fellow panelists, Eugenia Maria Di Marco and Ahpaly Coradin, who explored ESG in the contexts of startups, international markets, private equity, and M&A. As President-elect Trump continues to name cabinet members and advisors, I and others expect that ESG issues will continue to be a hot button issue here in the US.

Ahpaly shared his perspective on ESG trends, particularly in private equity. Although he acknowledged that in the US, interest in ESG is waning, many PE firms still screen for ESG risks at the initial target selection stage and during due diligence. Larger firms see market positioning and risk mitigation as the main benefits of ESG. However, revenue growth and capital allocation are not primary motivators due to the lack of data. He noted that many limited partners are increasingly deploying capital away from sectors like tobacco, alcohol, and to a lesser…

Earlier this week, I spoke on a panel for the SEC’s Investor Advisory Committee. The was the agenda. Although the video is not yet up and available publicly, I put the draft of my remarks up on SSRN.

Other panelists included:

If you’re interested in these issues, the panel may be worth listening to when the SEC makes it available.

One of the challenges with the discussion is how to zero in on what we mean by alternative investments. As conceived for the panel, the category includes the wide world of things beyond ordinary stocks, bonds, and public stock/bond mutual funds that may show up in a brokerage account.

This is an issue we’re going to have to navigate in the coming years. It’s not an easy one. There is a huge difference between the sorts of products issued by leading private equity firms and major institutional issuers and some of the other…