May 01, 2016
icon Conference Invitation: Corporation Compliance at Rutgers On May 20
Posted by David Zaring

Link here, details below.

The Rutgers Center for Corporate Law and Governance is presenting a conference on corporate compliance on Friday, May 20, 2016, from 8:30 AM to 3:30 PM, entitled New Directions in Corporate Compliance. The conference will take place at Rutgers Law School, 217 North Fifth Street, Camden, NJ 08102.

Corporate and regulatory compliance has exploded as an area of importance to a variety of business organizations in recent years. Corporate compliance programs must be well planned and rigorously implemented throughout a business organization. Notwithstanding the importance of corporate compliance, there is disagreement over the best way to implement and enforce a compliance program.

This conference will bring together academics, practitioners, and government officials, who approach compliance from different perspectives. The conference will include sessions on litigating the adequacy of a compliance program, structural issues in the compliance department, and organizational culture and developing a culture of compliance. Andrew Donohue, Chief of Staff of the U.S. Securities and Exchange Commission, will present a keynote luncheon address.

Other speakers include: Catherine Bromilow, Partner, PwC Center for Board Governance; Stephen L. Cohen, Associate Director, Securities and Exchange Commission; James Fanto, Gerald Baylin Professor of Law, Brooklyn Law School; Donald C. Langevoort, Thomas Aquinas Reynold Professor of Law, Georgetown Law; Joseph E. Murphy, Author of 501 Ideas for Your Compliance & Ethics Program; Donna Nagy, C. Ben Dutton Professor of Law, Indiana University Maurer School of Law; Charles V. Senatore, Executive Vice President, Fidelity Investments, Greg Urban, Arthur Hobson Quinn Professor of Anthropology, University of Pennsylvania; and John Walsh, Partner, Sutherland

The conference is free and open to the public. A reception will follow. To RSVP, please contact Deborah Leak at dl524@camden.rutgers.edu. CLE credit is available for NJ, NY, and PA. For additional information about CLE credit, contact Deborah Leak.

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April 29, 2016
icon We shop at the candidates' online stores
Posted by Matt Bodie

On the Friday in the midst of a heated presidential season, I thought we could take a spin through some of the Presidential candidates' online stores and see what merchandise is on offer.  After all, the Glom's motto is "Business|Law|Economics|Society."  What crosses those boundaries better than the stuff that the candidates are selling?

more ...

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April 28, 2016
icon Agency, Partnerships LLCs, and Unincorporated Associations & Nonprofit and Philanthropy Law: CFP
Posted by Usha Rodrigues

LLCs, New Charitable Forms, and the Rise of Philanthrocapitalism

 

2017 AALS Annual Meeting

 January 3-7, 2017

San Francisco, CA

In December 2015, Facebook founder Mark Zuckerberg and his wife, Dr. Priscilla Chan, pledged their personal fortune—then valued at $45 billion—to the Chan-Zuckerberg Initiative (CZI), a philanthropic effort aimed at “advancing human potential and promoting equality.” But instead of organizing CZI using a traditional charitable structure, the couple organized CZI as a for-profit Delaware LLC. CZI is perhaps the most notable example, but not the only example, of Silicon Valley billionaires exploiting the LLC form to advance philanthropic efforts.  But are LLCs and other for-profit business structures compatible with philanthropy? What are the tax, governance, and other policy implications of this new tool of philanthrocapitalism? What happens when LLCs, rather than traditional charitable forms, are used for “philanthropic” purposes?

From the heart of Silicon Valley, the AALS Section on Agency, Partnerships LLCs, and Unincorporated Associations and Section on Nonprofit and Philanthropy Law will host a joint program tackling these timely issues. In addition to featuring invited speakers, we seek speakers (and papers) selected from this call.

Any full-time faculty of an AALS member or fee-paid school who has written an unpublished paper, is working on a paper, or who is interested in writing a paper in this area is invited to submit a 1- or 2-page proposal by June 1, 2016.  The Executive Committees of the Sections will review all submissions and select two papers by July 1, 2016.  If selected, a very polished draft must be submitted by November 30, 2016.  All submissions and inquiries should be directed to the Chairs of the Sections at the email addresses below:

Mohsen Manesh

Associate Professor

University of Oregon School of Law

mohsen@uoregon.edu

Garry W. Jenkins

Associate Dean for Academic Affairs

John C. Elam/Vorys Sater Professor of Law

Moritz College of Law, Ohio State University

jenkins.434@osu.edu

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April 25, 2016
icon Court Order Style Mediation
Posted by David Zaring

I usually think of dispute resolution has a question of the delegation of control.  If you negotiate a settlement, you control the process and the decision.  If you arbitrate or sue, you delegate decision (and with courts, process) control to someone else.  Mediation is somewhere between those two poles, where you control the decision put let the mediator intervene in the process.

That's not really what happened in the Argentinian debt negotiations, which were recently concluded successfully.

Mediating in closed-door negotiations, Mr. Pollack cajoled both sides, at times resorting to theatrical moves like getting a court order to summon Mr. Singer, the founder of Elliott, to his office.

Mr. Pollack is a senior trial lawyer, one who doesn't particularly sound like an orthodox mediator.  Using a court order to force one of the parties to a mediation to negotiate is a bit more process control that most mediators usually have.  Anyway, a deal was reached, and I think you're supposed to say that a good mediator leaves everyone feeling a little bit unhappy:

Mr. Pollack’s rule of no pens and paper during crucial negotiations frustrated some, with two hedge fund managers complaining privately that the mediator was an obstacle to the settlement process.

If you like getting into the weeds of a settlement negotiation, I commend this story.

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April 24, 2016
icon Corporate Practice Commentator's Top Ten Corporate and Securities Articles of 2015
Posted by Usha Rodrigues

The list is out!  And it contains many former Glom guests and friends of Glom.  Congratulations to all.

Bartlett, Robert P. III. Do Institutional Investors Value the Rule 10b-5 Private Right of Action? Evidence from Investors' Trading Behavior following Morrison v. National Australia Bank Ltd. 44 J. Legal Stud. 183-227 (2015).

Bebchuk, Lucian, Alon Brav and Wei Jiang. The Long-term Effects of Hedge Fund Activism. 115 Colum. L. Rev. 1085-1155 (2015).

Bratton, William W. and Michael L. Wachter. Bankers and Chancellors. 93 Tex. L. Rev. 1-84 (2014).

Cain, Matthew D. and Steven Davidoff Solomon. A Great Game: The Dynamics of State Competition and Litigation. 100 Iowa L. Rev. 465-500 (2015).

Casey, Anthony J. The New Corporate Web: Tailored Entity Partitions and Creditors' Selective Enforcement. 124 Yale L. J. 2680-2744 (2015).

Coates, John C. IV. Cost-benefit Analysis of Financial Regulation: Case Studies and Implications. 124 Yale L .J. 882-1011 (2015).

Edelman, Paul H., Randall S. Thomas and Robert B. Thompson. Shareholder Voting in an Age of Intermediary Capitalism. 87 S. Cal. L. Rev. 1359-1434 (2014).

Fisch, Jill E., Sean J. Griffith and Steven Davidoff Solomon. Confronting the Peppercorn Settlement in Merger Litigation: An Empirical Analysis and a Proposal for Reform. 93 Tex. L. Rev. 557-624 (2015).

Fried, Jesse M. The Uneasy Case for Favoring Long-term Shareholders. 124 Yale L. J. 1554-1627 (2015).

Judge, Kathryn. Intermediary Influence. 82 U. Chi. L. Rev. 573-642 (2015).

Kahan, Marcel and Edward Rock. Symbolic Corporate Governance Politics. 94 B.U. L. Rev. 1997 (2014).

Velikonja, Urska. Public Compensation for Private Harm: Evidence from the SEC's Fair Fund Distributions. 67 Stan. L. Rev. 331-395 (2015).

Permalink | Legal Scholarship | Comments (View) | Bookmark

April 22, 2016
icon The Uber Settlement is an Unstable Equilibrium and/or Collective Bargaining
Posted by Matt Bodie

Uber has settled two California class actions in which the underlying issue was their employee status.  The company will pay up to $100 million to the class of roughly 385,000 drivers and also provide a new process for "deactivation" that provides drivers with a voice in whether Uber takes them off of its platform.  There is a lot of great academic writing about Uber out there, and I hope to contribute to the lit soon, but at present I just wanted to flag two quick points:

  1. This "settlement" does not and cannot settle the ultimate issue of whether Uber drivers are employees or independent contractors.  As Shannon Liss-Riordan, the attorney representing the drivers in the suit (as well as a classmate of David and mine), said in a statement: "“Importantly, the case is being settled — not decided.  No court has decided here whether Uber drivers are employees or independent contractors and that debate will not end here."  I suppose this class of drivers is giving up their claims, but it's not preclusive to future drivers or the State of California or Massachusetts or the IRS, as far as I can tell.  So what exactly is Uber getting for its money?  These class claims are settled (if the court approves), but the issue remains open and will continue to generate potential claims down the road.  However, Uber does get a temporary litigation reprieve and a better relationship with its drivers.  Which leads to the second point . . . .
  2. This settlement really looks like a collective bargaining agreement. It provides the workers with:
    • additional pay (aka a settlement "bonus") based on miles driven
    • a peer-driven arbitration-like process for deactivation (aka termination)
    • an internal arbitration-like process for pay disputes
    • a notification that tips are not included in the Uber fee, and 
    • the facilitation and recognition of an Uber Driver Association who will bargain with Uber (or, in the works of the press release, "who will be able to bring drivers' concerns to Uber management, who will engage in good faith discussions (on a quarterly basis) regarding how to address these concerns")

   That last one really clinches it, no?  But if the drivers are not employees, then will this Driver Association be an unlawful restraint of trade?  Or will the NLRB find the drivers to be employees despite the settlement and then find that Uber has violated NLRA Sec. 8(a)(2) by providing assistance to a labor organization?  (Uber's CEO says the company "will help fund these two associations.")

Congrats to Shannon and the Uber drivers for pulling off what looks to be a real step forward for the drivers' relationship with the company.  But in my view, the settlement that seeks to confirm that drivers are not employees only ends up making them look even more like employees.

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April 21, 2016
icon Business Law at Ryerson in Toronto
Posted by David Zaring

If you're interested, details after the jump.

more ...

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icon This startup's technology powered the Panama Papers investigation
Posted by Usha Rodrigues

I enjoyed this article about Swedish software (now headquartered in San Mateo--that Silicon Valley pull is hard to resist) Neo Technology, whose graphic database Neo4j allowed investigative journalists to make connections between the vast amounts of data contained in 11.5 million documents. Equally fun for me is that an MIS professor at the business school forwarded me the article because a project on which we're collaborating will use Neo4j. I'm cutting edge!

Neo Technology has paying clients that use the technology to crunch data in the service of worthy goals like giving online purchasers customized recommendation (Walmart) and fraud prevention (UBS).  But here's the money quote: "Eifrem lets investigative journalists use the free version of his software. 'I’m not in the business to make money out of eight journalists who are trying to save the world—that’s not my business model,' he said, laughing."

Permalink | Entrepreneurship, Technology | Comments (View) | Bookmark

April 20, 2016
icon AALS Call for Papers: Securities Regulation and Technological Change
Posted by Erik Gerding

Call for Papers
AALS Section on Securities Regulation - 2017 AALS Annual Meeting


January 3-7, 2017, San Francisco


The AALS Section on Securities Regulation invites papers for its program on “Securities Regulation and Technological Change” at the 2017 AALS annual meeting.

TOPIC DESCRIPTION: This panel discussion will explore the intersection of securities regulation and technology.  The Executive Committee welcomes papers on a broad range of related topics, including technology in financial markets, high frequency trading, crowdfunding, transactional and financial innovation, securities offering reform, and information overload.

ELIGIBILITY: Full-time faculty members of AALS member law schools are eligible to submit papers. Pursuant to AALS rules, faculty at fee-paid law schools, foreign faculty, adjunct and visiting faculty (without a full-time position at an AALS member law school), graduate students, fellows, and non-law school faculty are not eligible to submit. Please note that all faculty members presenting at the program are responsible for paying their own annual meeting registration fee and travel expenses. 

PAPER SUBMISSION PROCEDURE: Up to four papers may be selected from this call for papers. There is no formal requirement as to the form or length of proposals. However, more complete drafts will generally be given priority over abstracts, and presenters are expected to have a draft for commentators three weeks prior to the beginning of the AALS conference.

Papers will be selected by the Section's Executive Committee in a double-blind review. Please submit only anonymous papers by redacting from the submission the author's name and any references to the identity of the author. The title of the email submission should read: "Submission - 2017 AALS Section on Securities Regulation."

Please email submissions to the Section Chair Verity Winship at:  vwinship@illinois.edu on or before August 19, 2016.

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April 19, 2016
icon Welcome to the Blawgosphere: The Surly Subgroup
Posted by Christine Hurt

Welcome to the blawgosphere/blogosphere: The Surly Subgroup:  Tax Blogging on a Consolidated Basis!  This new blog was launched fittingly on Tax Day (yesterday).  Sorry I missed the launch, but I was running to the post office.  The array of authors promises interesting takes on a variety of tax issues:  Jennifer Bird-Pollan, Benjamin Leff, Leandra Lederman, Philip Hackney, David Herzig, Stephanie Hoffer, Diane Ring, Sam Brunson, and Shu-Yi Oei.

Happy Posting!

 

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icon 2015 Stetson Law Review Symposium - Inequality, Opportunity, and the Law of the Workplace
Posted by Matt Bodie

In March 2015, the Stetson Law Review hosted a symposium on "Inequality, Opportunity, and the Law of the Workplace."  The day was a terrific opportunity to think about how the concern about income inequality -- the focus of this guy's campaign -- is and can be addressed by the law, especially labor and employment law.  The symposium is dedicated to Michael Zimmer, who tragically passed away months after the symposium.  Below are links to videos of the event and to papers published from the symposium:

Video:

Papers

Permalink | Employees | Comments (View) | Bookmark

icon Dictation and Delegation in Securities Regulation
Posted by Usha Rodrigues

Glom readers, it has been a busy semester!  I am trying to get back to blogging, and will start with some happy news.  I've been obsessing about the politics of securities regulation for some time--specifically, why did we get the JOBS Act, and more generally what explains why and when Congress intervenes in securities law.  Between teaching and associate deaning I've also been writing, and I'm proud to report I now have a draft posted on SSRN and accepted at the Indiana Law Journal.  Abstract below; comments welcome.

 When Congress undertakes major financial reform, either it dictates the precise contours of the law itself or it delegates the bulk of the rulemaking to an administrative agency. This choice has critical consequences. Making the law self-executing in federal legislation is swift, not subject to administrative tinkering, and less vulnerable than rulemaking to judicial second-guessing. Agency action is, in contrast, deliberate, subject to ongoing bureaucratic fiddling and more vulnerable than statutes to judicial challenge.

This Article offers the first empirical analysis of the extent of congressional delegation in securities law from 1970 to the present day, examining nine pieces of congressional legislation. The data support what I call the dictation/delegation thesis. According to this thesis, even controlling for shifts in political-party dominance, Congress is more likely to delegate to an agency in the wake of a salient securities crisis than in a period of economic calm. In times of prosperity, when cohesive interest groups with unitary preferences can summon enough political will to pass deregulatory legislation on their behalf, the result will be laws that cabin agency discretion. In other words, when industry can play offense, Congress itself engages in the making of governing rules and does not punt to an agency—even on issues that would seem the logical province of administrative technocrats. In contrast, following a crisis, industry is forced to play defense rather than offense. Its goal is to minimize the deleterious impact of inevitable legislation by shifting regulation as much as possible to the agency level, where it has time to regroup and often delay regulation until the political pressure for reform abates.

Permalink | Legal Scholarship, Politics, Securities | Comments (View) | Bookmark

April 13, 2016
icon Congrats to SMU and my coauthor!
Posted by Matt Bodie

Just wanted to say congratulations to both the SMU Dedman School of Law and my coauthor Grant Hayden on Grant's upcoming move to SMU.  Grant is going there along with Joanna Grossman, James Coleman, and Dale Carpenter -- a terrific group of lateral hires.  Along with a few articles in the works, Grant and I are working on a book for Cambridge titled "Reconstructing the Corporation."  I'm excited for him and Joanna and congratulate SMU Dean Jennifer Collins and the SMU faculty for choosing an excellent set of new colleagues.

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April 08, 2016
icon The 2016 Texas Legal Scholars Workshop
Posted by Gordon Smith

The Southern Methodist University (SMU) Dedman School of Law and the University of Houston Law Center are sponsoring The 2016 Texas Legal Scholars Workshop. Here is the announcement:

Would you like early-stage feedback on a research idea? Or late-stage feedback on an article ready for submission? Or something in between? Your colleagues at SMU and Houston invite you to join us for the second annual Texas Legal Scholars Workshop, to be held on August 26-27, 2016, at the SMU Dedman School of Law in Dallas, Texas. The Texas Legal Scholars Workshop provides an intimate setting for early-career scholars (those with less than 10 years in a full-time faculty position) to receive feedback on an idea, work-in-progress, or a polished draft. We welcome legal scholars from all disciplines.

At the Workshop, each author will present a 5-10 minute synopsis of his or her paper, followed by 15-20 minutes of comments by a primary commenter, followed by an open discussion with other attendees.

The workshop will give participants the chance to meet other early-career scholars in Texas, share feedback on research, and enjoy a few social events. There is no registration fee. Attendees are responsible for their own hotel and travel expenses, but SMU will pay for meals, including a hosted dinner at a restaurant on Friday night.

more ...

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April 07, 2016
icon The MetLife Designation Opinion - To Designate, FSOC Must Do A Cost-Benefit Analysis
Posted by David Zaring

MetLife successfully appealed its designation as a SIFI to the district court in Washington, which took an awfully searching review of the factors used by the FSOC to make the determination.  The court, in the end, concluded that the council's designation was arbitrary and capricious, which means it was illegal.  The most interesting part of the opinion is the part requiring the FSOC to do a cost benefit analysis before designating.

FSOC has refused to do a quantified cost benefit analysis, which is a departure for the executive branch.  The White House requires agencies to conduct one before they promulgate expensive rules.  That a financial regulator, where excel spreadsheets and quantified stress tests are part of the job, would refuse to do one in making a determination about the riskiness of a financial institution is a pretty interesting rebuke to those who believe that cost benefit analyses are essential components of effective regulation.  But perhaps the FSOC has been listening to John Coates.

Here's what the court had to do to require a cost benefit analysis - most, um, interestingly it relied on the word "appropriate" while ignoring the word "deems" in Congress's guidance about how to do SIFI designations.  Most administrative lawyers would conclude that it was up to the Council to decide whether to take costs into account in designations if the statute provides that the FSOC “shall” consider a number of factors and also “in making a designation, any other risk-related factors that the Council deems appropriate.”

But the court thought differently:

FSOC, too, has made the decision to regulate—by designating MetLife. That decision intentionally refused to consider the cost of regulation, a consideration that is essential to reasoned rulemaking. Cf. [Michigan v. Environmental Protection Agency, 135 S. Ct. 2699 (2015)] at 2707 (“Consideration of cost reflects the understanding that reasonable regulation ordinarily requires paying attention to the advantages and the disadvantages of agency decisions.”) (emphasis in original). In light of Michigan and of Dodd-Frank’s command to consider all “appropriate” risk-related factors, 12 U.S.C. § 5323(a)(2)(K), FSOC’s position is at odds with the law and its designation of MetLife must be rescinded.

I'm pretty unpersuaded by that reasoning.  Cost benefit analysis may be a good idea, or it may not be, but I don't see how the courts should go around requiring it on the basis of a catch-all clause awarded discretion to the agency to add factors to an already long list of factors to be considered in SIFI designations.

Permalink | Administrative Law, Finance, Financial Crisis, Financial Institutions | Comments (View) | Bookmark

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