January 14, 2016
icon The Los Angeles Rams and the End of Professional Football in the Gateway City
Posted by Matt Bodie

The Rams are moving back to L.A.  I think most of the country doesn't care or is vaguely happy for L.A., since the Rams were taken from Angelenos in 1995.  They had a nice run in St. Louis, including "the Greatest Show on Turf" and a Super Bowl, but now they go back to their presumably rightful location.  (But not Cleveland.)  As a St. Louisan, my feelings are a bit more mixed, as the NFL put the local and state governments through a variety of hoops and then ended up disregarding what was actually a pretty generous stadium plan.  (Too generous.) If you are interested in the local perspective with a big slice of outrage, you can read Bernie Miklasz here.

Coincidentally, Lawrence Phillips died in prison the day after the relocation decision. Phillips was the Rams' first-round pick in 1996 -- he was picked 6th overall after rushing for 165 yards and two touchdowns in the Fiesta Bowl for the national champion Nebraska Cornhuskers.  Phillips had been suspended earlier that season after being arrested for assaulting his girlfriend, a player on the women's basketball team, when he allegedly dragged her down a flight of stairs by her hair.  Phillips would have likely gone higher than sixth in the draft based on talent alone, as several teams cited his "off-field" troubles as a matter of concern.  After trading Jerome Bettis to make way for Phillips, the Rams released him in the midst of his second season.  He played for Miami for one year, played in the European League, and then played for the 49ers in 1999.  San Francisco released him before the end of the season. Phillips was blamed for missing a block that led to a hit on Steve Young that rendered him unconscious.  Young's concussion from that hit ultimately led him to retire from the NFL.

Phillips played for the AFL and CFL for a few subsequent years.  He was released by one CFL team after charges of sexual assault were raised.  In 2008 and 2009, he was tried and convicted for two separate sets of charges: driving his car at three teenagers after a pick-up football game and choking a former girlfriend into unconsciousness.   He was sentenced to 31 years.  

In April 2015, Phillips's cellmate -- the cousin of an NFL player -- was found dead by strangulation in their cell.  Phillips was charged with first-degree murder in September.  The day before Phillips's death, he had been ordered to stand trial for the murder.  The cause of his death has been characterized as a suicide.

Permalink | Current Affairs, Sports | Comments (View) | Bookmark

January 13, 2016
icon Financial Firms Really Hate Being SIFIs
Posted by David Zaring

For those who believe that bank regulators are totally captured, I give you MetLife's very grudging decision to maybe break itself up in an effort to get undesignated as a systemically important financial institution, subject to extra capital requirements and Fed supervision.  GE hated being a SIFI so much that it got out of of the business of finance.  MetLife was so outraged by its designation that it sued.  And the enormous asset managers, such as BlackRock, watching this must be terrified that they will be designated next.

The exception?  Very large banks, who were already subject to Fed supervision, aren't trying to get smaller, or at least haven't so far.  It could be that one of the things that they consider to be part of their skill set is dealing with regulators.  For those who grew into prominence with other skills, regulatory management is clearly not worth the candle.  But that's what big banks do.


The giant insurer MetLife said on Tuesday that it was exploring spinning off its retail life and annuity business in the United States because of financial pressures it is facing under regulations put in place in the wake of the financial crisis.

The decision was made two years after the Financial Stability Oversight Council, a group created by the 2010 Dodd-Frank regulatory legislation, named MetLife a systemically important nonbank financial institution, or SiFi. That designation carries requirements to set aside more capital as a cushion against a substantial decline in the nation’s financial markets as occurred in 2008, potentially limiting its earnings.

MetLife is considering several options, including an initial public offering to create a company that would, presumably, be better able to compete with smaller life insurance and annuity providers who are not subject to the same regulatory restrictions.

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

January 12, 2016
icon The Top 250 Legal Authors
Posted by David Zaring

Seth Barrett Tillman points us to a ranking developed by HeinOnLine.  I'm all about citation studies these days having just - if I may boast - chalked up my thousandth in Westlaw's law review database.  The Hein study is both plausible and a little controversial, so I'm sure you'll want to take a look - at the top are Posner and Sunstein, but lower on the list are prominent, but interesting crim, enviromental, philosophical, and other scholars.  Hein says that its "list is calculated based on an analysis of all articles in HeinOnline. We then ranked each author in each category: number of times cited by articles, number of times cited by articles written in the past 10 years, number of times cited by cases, and number of times accessed and averaged the rankings to produce this list of the 250 authors that scored the highest when averaging all categories."

Permalink | Accounting | Comments (View) | Bookmark

January 11, 2016
icon Family Film Blogging: Bridge of Spies
Posted by Christine Hurt

Very rarely do movies create heroes out of insurance defense attorneys, but Bridge of Spies tries to remedy that fact.  This Saturday, my oldest said she wanted to see "that Tom Hanks movie about war."  I interpreted that to mean Bridge of Spies, which is at our discount theater, so off we went.

The movie is based on true events depicted in the book Strangers on a Bridge, written by James B. Donovan, played by Tom Hanks in the movie.  Donovan, a partner at a NY law firm handling insurance defense cases, is asked by the head of the NY bar to represent pro bono an accused Russian spy, known in the movie as Rudolf Abel.  We later learn that Donovan participated in the Nuremberg prosecutions, so he is no stranger to high-level political prosecutions.  Though he is encouraged to take the case, he soon finds that he is not expected to push very hard for an acquittal or an appeal, as Abel is clearly guilty of espionage and Cold War fears are high in 1962.  He grows to respect Abel for being a model employee (he will not agree to cooperate or be a double agent) for the USSR, and eventually saves him from the death penalty.  However, his representation takes a toll on his reputation and his family.

The real center of the movie, however, is he exchange of Abel for Francis Gary Powers, the U-2 pilot shot down over the USSR.  Donovan, as a private citizen, is asked to represent Abel in a strange negotiation with the USSR for Powers and the newly born East Germany for the release of a Yale graduate student, Frederic Pryor.  As someone who watched the Berlin wall fall, and (my daughter) someone who never knew the Berlin wall, watching the wall be constructed and the immediate impact on Berliners was the most interesting part of the movie.  Donovan must travel daily from West Berlin to East Berlin to conduct these strange pantomime negotiations, and of course his litigation settlement skills are quite valuable here.  

If you were aware of the story, then you know how the movie ends, but in talking to others I've noticed a lot of people did not know the Powers story.  Interestingly, the trailer doesn't mention Powers, though it shows shots of scenes in which the actor portraying him appears.  The website does not use his name, either.  This seems to be an obvious choice on their part, but the reason is not obvious to me.  I gather that history is not clear on whether Powers followed orders to self-destruct the plane and commit suicide before being taken prisoner, and his military honors and awards came late and posthumously.  However, I'm not sure whether naming Powers as the American spy in question in the trailer would have kept people away, drawn people to the theater, or neither.  Perhaps the producers didn't want audiences to stay away from a movie with a known ending, though Apollo 13 seemed to do okay.  Anyway, the focus of the movie is Donovan, and Powers' on-screen time is minimal.

Is it a good movie?  It was enjoyable for a Saturday afternoon for $4.  I think my daughter (16) thought it was long, and it did drag along.  Hank's Donovan is very likable, and always fun to watch.  

Permalink | Film | Comments (View) | Bookmark

January 07, 2016
icon AALS Section Meetings
Posted by Gordon Smith

It was an eventful first day at AALS, including some unscripted excitement at the Securities Regulation panel. When I scooted my chair back from the participant's table, one of the legs went off the end of the dais ... and I soon followed. I have never felt as helpless as I did while falling backwards off the stage! (Don't mind me, everyone!) Fortunately, I wasn't hurt, but it was plenty embarrassing.

My sudden cold (and loss of voice) kept me out of the afternoon sessions, but I heard good things about the first practical skills session (Pedagogy for New Law School Teachers: Teaching Transactional Skills Using Interactive Methods in Doctrinal Classes: Flipped Class Rooms, Lab Courses, Drafting and More). I am still looking forward to several section meetings:

  • Contracts: Braided Contracting and the Interplay of Formal and Informal Enforcement Strategies in Contract Relationships
  • Business Associations and Law and Economics, The Corporate Law and Economics Revolution 40 Years Later: The Impact of Economics and Finance Scholarship on Modern Corporate Law
  • Transactional Law and Skills, Transactional Lawyering and Contractual Innovation
  • Creditors’ and Debtors’ Rights Section, Bankruptcy for the Ninety-Five Percent: Making the System Work for Small and Medium-Sized Businesses and Sole Proprietors

Here's hoping to a quick recovery for tomorrow!

Permalink | AALS | Comments (View) | Bookmark

January 06, 2016
icon What Is Shadow Banking?
Posted by David Zaring

I weighed in with a couple of quotes on shadow banking, which Hillary Clinton thinks Bernie Sanders doesn't want to regulate, and breaking up the banks, which Sanders wants to do.

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

January 05, 2016
icon Securities Regulation Panel at AALS -- Thursday, January 7 at 10:30 a.m.
Posted by Christine Hurt


Like Usha, I hope to see lots of familiar and new faces at the AALS Conference!  I will kick off my time there moderating the Securities Regulation Section panel on Thursday at 10:30 a.m.  The title of the panel is "The Future of Securities Regulation:  Innovation, Regulation and Enforcement," and we have three papers chosen from a stack of very good, anonymized submissions.  Our three papers are:

Minor Myers & Charles Korsmo, Aggregation by Acquisition:  Replacing Class Actions with a Market for Legal Claims

Hillary Sale & Robert Thompson, Market Intermediation, Publicness, and Securities Class Actions

Urska Velikonja, Reporting Agency Performance:  Behind the SEC's Enforcement Statistics

In addition, Jill Fisch and Gordon Smith will comment on each paper.


Hope to see you there!



Permalink | AALS | Comments (View) | Bookmark

icon See you at AALS!
Posted by Usha Rodrigues

I'll be leaving for New York tomorrow, and if you're attending AALS 2016, here's where I'll be:

Thursday, 1/7 1:30: Arc of Career: Scholarly Engagement Post Tenure (Hilton, Gramercy East)

I'll be speaking on this panel moderated by Scott Dodson (University of California, Hastings College of the Law) with Bennett Capers  (Brooklyn Law School), Samuel Jordan (Saint Louis University School of Law), L. Song Richardson (University of California, Irvine School of Law), and Stephen I. Vladeck (American University, Washington College of Law).  I'm sort of thinking of it as What Do People Do Post Tenure?Except without pigs driving pickle cars.

Friday, 1/8 1:30 Joint Session of the Sections for Business Associations and Law & Economics (Hilton Sutton South)

I am Chair-Elect for the BA Section and am moderating what promises to be a great panel. We have an incredible lineup including two AALS "Speakers of Note." Our three senior commentators are Judge Frank Easterbrook (Seventh Circuit Court of Appeals), H. Kent Greenfield (Boston College Law School) and  Roberta Romano (Yale Law School).  Panelists selected from our call for papers were Tamara C. Belinfanti (New York Law School), Kathryn Judge (Columbia University School of Law), and K. Sabeel Rahman (Brooklyn Law School).  

I hope to see you in NYC! 


Permalink | AALS | Comments (View) | Bookmark

January 04, 2016
icon Family Film Blogging (Non-Star Wars Edition): Creed and Concussion
Posted by Christine Hurt

We took the older kids to some non-Star Wars PG-13 movies this holiday, though I am still resisting going to see Daddy's Home, which just seems awkwardly horrible from the trailer I've seen dozens of times now.  The two we did go see were Creed and Concussion, and I would heartily recommend them both.

As you probably now, Creed is a sequel/reboot of the Rocky franchise, which I have to say I lost track of after Mr. T and the Russians.  In fact, I'm not sure I've ever seen Rocky the original from start to finish.  I did see the last half of I and the first part of II during a marathon last year, so I think I'm good on the basics.  Rocky III was the first movie I saw sitting next to a boy, so I can remember it pretty well.  Enough about me.

So, Sylvester Stallone has now realized that he cannot carry the franchise indefinitely, and this episode focuses on Adonis Creed (Donnie), the son of Apollo Creed, born out-of-wedlock by Apollo's mistress after his fatal boxing match with Ivan Drago in Rocky IV.  Donnie ends up in the foster care system after the death of his mother, but Apollo's widow eventually finds him and becomes his guardian.  Donnie spends the last half of his adolescence in plush Californian opulence, nurtured by his "Ma," but secretly satisfies his desire to fight by boxing in Tijuana.  Though he becomes successful in the financial industry at a young age, he leaves it behind to move to Philadelphia to ask Rocky Balboa to train him.  Of course, Rocky at first balks at the suggestion, having become a semi-reclusive figure after the death of Adrian, running a restaurant and living in his old, modest home.  (Apparently, Rocky lost his fortune in Rocky V, which I missed.)  Eventually, however, Rocky takes on Donnie as a fighter, and the two take on a familial-type relationship.  Donnie calls him "Unc," and he moves in with him.

Donnie and Rocky try to keep his identity a secret, but of course Adonis' relationship to Apollo is leaked to the media.  Following this revelation, the heavyweight champion, who is awaiting a probable prison sentence, offers to fight Donnie for the championship.  The fight will bring the Irish fighter a lot of money and publicity, which will help his family after he goes to prison.  Donnie of course has nothing to lose.  The fight is a lot like the championship fight between Rocky and Apollo in the original movie, in case you haven't figured that out yet.

I never watch actual boxing, but I kind of enjoy boxing movies.  I once heard a director explain that boxing movies are really dancing movies, and that makes a lot of sense to me.  Michael B. Jordan, who we knew from Parenthood and The Fantastic Four, was pretty amazing in this really physical role.  And Stallone, who did not write the screenplay, gives a great, understated performance as Rocky Balboa.  If you are a Rocky fan, there are plenty of homage moments that will make you nostalgic.  If you aren't, then you will enjoy the movie afresh. 

Concussion is also a movie about a contact sport, but this movie focuses more on the darker side of athletic violence, not the poetic beauty.  Based on a true story, the film focuses on Dr. Bennet Omalu, a forensic pathologist who, working in Pittsburgh, was assigned to perform an autopsy on a former Pittsburgh Steeler center, Mike Webster.  Against the wishes of his colleagues, he performs extra tests to determine why Webster's mental health had deteriorated to the point where he was living in his truck, sniffing super glue and taser-ing himself so he could sleep.  Dr. Omalu identifies brain damage undetectable by CT scans, seemingly caused by repetitive sub-concussive blows to the head over the course of Webster's successful NFL career.  He shows his findings to notable academics at Columbia University, and together with the head coroner in Pittsburgh, publishes his findings.  The movie chronicles the downward trajectory of his medical career as his work earns him jeers, death threats, and damage to his reputation. The film presents a scene in which the FBI will investigate the Pittsburgh coroner and try to force Dr. Omalu into being either a witness or defendant to the trumped-up charges, but Slate has exposed this scene as misleading.  I have not done any independent research on the FBI investigation.  Eventually, Dr. Omalu gains access to the brains of three other NFL players, all of whom exhibit the same damage.  Dr. Omalu was later vindicated, but only at great personal cost.

Commentators on the movie continue to argue over the implications of Dr. Omalu's research and whether NFL players are exposing themselves to outsized risks.  The movie, however, does pose interesting questions.  Even if the evidence against football collisions was incontrovertible and airtight, would it make a difference?  Would fans stop watching or players stop playing?  Would 10% of moms not let their kids play football, and (as suggested in the movie) professional football would die?  If the coroner assigned to Mike Webster had been a Steeler's fan, or even a football fan, would chronic traumatic encephalopathy (CTE) never have been detected?  The Sony email leaks apparently contained emails suggested that the movie was changed so as not to anger the NFL.  Even so, the movie seems to be fairly straightforward in its blaming the NFL for not disclosing risks that it had discovered and not seriously investigating red flags.  In the end, it is a movie, and the movie is quite compelling.

Permalink | Film | Comments (View) | Bookmark

icon Regulatory Consultancies Now Come In Democrat and Republican Flavors
Posted by David Zaring

Daniel Gallagher has announced that he will be joining Patomak Partners, a company that is going to do the same thing that Promontory and PWC does - accumulate regulators who can get banks and broker-dealers out of regulatory trouble, partly by relying on the expertise and contacts of their principals, who tend to have run the agencies regulating the banks.  It's a huge growth industry in banking regulation, sometimes dubbed shadow regulation, and a controversial one, because revolving door etc.  I, however, am all in favor of the revolving door, and see nothing particularly wrong with this one.

However!  Patomak is new and young and small, but what it represents is the politicization of these sorts of firms.  Promontory invented the genre, and it was started by Democrats, but it reads as relatively non partisan.  A review of the masthead of Patomak reveals a litany of Republican former political appointees at the SEC and CFTC, starting with the president and CEO, Gallagher, and Paul Atkins, probably the most aggressively conservative SEC commissioners ever, surely at a cost to their standing with the agency staff.

It makes you wonder what the play is.  Trent Lott successfully created a Republican K Street, annoyed at the liberal dominance of lobbying firms, and thinking that the existence of a parallel more conservative DC ecosystem would benefit his party.  Those firms do fine, I think, but being able to seriously negotiate with enforcement officials usually requires a vaguely non-partisan hue; that's one reason why law firm white collar practices generally don't sort into liberal and conservative.  I'm not sure that a right wing financial regulation consultancy makes a ton of sense from a business perspective.  So maybe you think this is like a think tank - a place where politicians hang out and make a little money before accepting their next appointment.  Except that the next appointment for SEC and CFTC commissioners, other than chair, never usually happens.  Instead, they go to law firms or academia, and become wise old people of capital markets regulation.

I suspect that the assumption is that even independent agency work is getting increasingly politicized, and so the next time there's a Republican presidency, the SEC and CFTC appointees are going to listen to Patomak, and aren't going to listen to anyone else.  That will make for some feast and famine years for the business, and isn't an entirely appetizing prospect for regulation in general.  It's also a big bet by Atkins and Gallagher, et al, on President Trump, or whoever.  But maybe they were having a hard time getting hired by less partisan firms.


Permalink | Administrative Law, Securities | Comments (View) | Bookmark

January 03, 2016
icon Family Film Blogging (Special Edition): Star Wars: The Force Awakens
Posted by Christine Hurt

Sorry for the belated post!  We spent the holidays doing fun family things, including going to the movies.  This review is about the highlight of our movie-going: Star Wars:  The Force Awakens, otherwise known as Episode VII.  I'm assuming that everyone who wants to see it has, so I'll let the spoilers fly.

I have to say that when the movie opens and the "Star Wars" banner starts to scroll, I got a little choked up.  For those of us of a certain age, Star Wars was the background of our childhood/tweendom.  We were told there would be nine movies, three that preceded the original trilogy, and three that followed.  As adults, we heard that the three prequels would come first.  (I was a little saddened.  I wasn't as interested in how Anakin fell as how Han and Leia got married.)  Then the prequels were. . well. . .awful.  So, the news that in our middle age, the last three would be made was met with excitement mixed with a lot of anxiety.  Would these be awful, too?  Would they be all ewoks and Jar Jar?  Would the acting be so bad as to make you laugh in inappropriate parts?  So, with some trepidation, a generation of viewers bought tickets ahead of time to see Episode VII.  

And it was good.  Maybe great, maybe amazing, but definitely all was good.  At the end there was clapping and rejoicing, for the story but also for the sense that the movie makers (Disney now, not George Lucas) heard the fans.  Understood what was so genre-defining and game-changing about Episode III.  Gave the fans the story, without muppets and bad actors.  If the original movie resonated with the audience's priors about good and evil, the latest installment resonates with the audience's need to be understood and heard.  George Lucas has criticized the "retro" Episode VII for pandering to the fans.  Whatever.  I loved it.  I walked out and wanted to walk right back in again.

If you've seen the movie, then you can track Episode VII and Episode IV and have already realized they are the same (awesome) movie.  There is a bad guy, who used to be a good guy (Kylo Ren), and a bad guy mentor (Supreme Leader Snoke), who are trying to take over the galaxy under the name the First Order.  There is a resistance leader who has secret information (Poe) who gives it to a droid (BB-8) to deliver it to the resistance.  There are two young people who bump into BB-8's mission (Rey and Finn) and each have their own reasons for following or wanting to leave.  Both Rey and Finn have parts of Luke and Han Solo.  Rey is a scavenger and a tinkerer and a pilot (like Han), but she obviously has a higher calling to the force (like Luke).  Finn is moved by love (like Luke), but also has self-preservation tendencies (like Han).  But they are interesting in their own right.  Finn is FN-2187, a stormtrooper.  These iconic troops that have been nameless and faceless to Star Wars fans now have a backstory.  Finn was taken from his family by the First Order and programmed to fight.  (His programming seems to not have taken at all!)  After his first battle, Finn decides to escape but needs a pilot to help him.  Luckily for him, Poe is being held prisoner and is the best pilot in the resistance.  Together, they escape, heading toward Jakku, to find BB-8 and take the secret information back to the resistance.  After their ship is disabled, Finn wakes up on Jakku, where he meets up with Rey, who has befriended BB-8.  After stormtroopers come calling, the three take off in the Millennium Falcon (!!) to get the information to the resistance.  Guess what the information is?  A map to where Luke Skywalker has been living in self-imposed exile!!

So, the story is set and the parallels to the original lead one to predict where the plot is going to go.  Characters are related to one another, someone dies in a way that inspires the newest Jedi, etc.  Along the way we meet back up with Han and Chewbacca, and even General (nee Princess) Leia.  There are many, many moments of homage to the original, and I ate them up with the rest of the audience.  

There are lots of things to criticize, of course.  The galaxy, which has as many non-humanoid beings as humanoid beings, seems to be about 2% female and .00002% nonwhite.  Droids may be more slave than robot.  (We rewatched the original three, and even in those movies, droids inconsistently feel pain, fear torture or destruction, and have feelings.)  As many people have pointed out, the best parts of the movie are unoriginal.  But I will watch it again and again.  Rey is a much more interesting female character than Princess Leia, and a less whiny Jedi than Luke.  (Don't get me started about Hayden Christensen's Anakin.  Anakin is such a bad Jedi, he makes Finn look like a great stormtrooper.)  Finn seems also more three-dimensional than Han.  I'm very interested to see where the plot is going.

Where is the plot going?  One of the Star Wars trailers has a voice-over by Luke (Mark Hamill), saying "The Force is strong in my family.  My father has it.  I have it.  My sister has it.  And you have it."  This is a riff on the same speech Luke gives Leia in Episode VI, but with the last sentence added.  This speech is never given in Episode VII (in fact Luke doesn't speak in this episode).  So, we assume that he will eventually give the speech to Rey, but how does Rey have the Force?  Is she related to Luke?  Will the movies ever mention midichlorians again (no!).  To be continued. . . .

Permalink | | Comments (View) | Bookmark

December 23, 2015
icon Bernie Sanders On Reforming The Fed
Posted by David Zaring

He's got an interesting op-ed in the Times.  One proposal - to get rid of the reserve bank structure - is one that I associate with Peter Conti-Brown, of this parish.

The chief executives of some of the largest banks in America are allowed to serve on its boards. During the Wall Street crisis of 2007, Jamie Dimon, the chief executive and chairman of JPMorgan Chase, served on the New York Fed’s board of directors while his bank received more than $390 billion in financial assistance from the Fed. Next year, four of the 12 presidents at the regional Federal Reserve Banks will be former executives from one firm: Goldman Sachs.

These are clear conflicts of interest, the kind that would not be allowed at other agencies. We would not tolerate the head of Exxon Mobil running the Environmental Protection Agency. We don’t allow the Federal Communications Commission to be dominated by Verizon executives. And we should not allow big bank executives to serve on the boards of the main agency in charge of regulating financial institutions.

If I were elected president, the foxes would no longer guard the henhouse. To ensure the safety and soundness of our banking system, we need to fundamentally restructure the Fed’s governance system to eliminate conflicts of interest. Board members should be nominated by the president and chosen by the Senate. Banking industry executives must no longer be allowed to serve on the Fed’s boards and to handpick its members and staff. Board positions should instead include representatives from all walks of life — including labor, consumers, homeowners, urban residents, farmers and small businesses.

That change makes a ton of sense.  But there's also a call by Sanders, duplicated by Rand Paul and others, to "audit the Fed."

In 2010, I inserted an amendment in Dodd-Frank to audit the emergency lending by the Fed during the financial crisis. We need to go further and require the Government Accountability Office to conduct a full and independent audit of the Fed each and every year.

I don't even know what this means.  Audit how?  To what end?  Does someone think that the Fed fails to accurately report its assets and liabilities?  A GAO report on the Fed would differ from what we already know about the Fed's finances not one whit.  When confronted with avidly pursued meaningless policy claims, my assumption is that it's a means to some other end.  In Paul's case, that end would be to eliminate the Fed.  Sanders can't possibly want the same thing, can he?


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

December 22, 2015
icon Bebchuk and Jackson on Political Spending Disclosure
Posted by David Zaring

If you missed it, Lucian Bebchuk and Robert Jackson are in the Times today decrying the budget bill's one year prohibition on the SEC's issuance of political spending disclosure requirements rules.  That's pretty micro-managey, and you can't imagine the legislature getting so involved in the details of banking regulation.  Bebchuk and Jackson are, as proponents of regulation here, displeased:

The rider also undermines the standing of the S.E.C. It reflects a judgment that the commission and its staff, which have served the investing public well for generations, cannot be trusted to reach an appropriate decision about whether and how to develop rules in this area. Legislators should not tie the hands of independent and expert regulators and prevent them from doing their job.

And the rider undermines the critical premises on which the Supreme Court has relied in its Citizens United decision. In this consequential decision, the court reasoned that “the procedures of corporate democracy” would ensure that political spending by public companies does not depart from shareholder interests. Without disclosure to investors, however, such procedures cannot be expected to limit or prevent such departures.

Under a Carolene Products theory, this would be the sort of case that could call for judicial involvement; it involves legislators legislating for opacity about who gives to their own campaigns - a self interested effort that undermines the democratic process.  

Permalink | Administrative Law, Securities | Comments (View) | Bookmark

December 17, 2015
icon ICYMI: Using the Fed to Fund Highways
Posted by David Zaring

Earlier this week, while on the road, I had a column in DealBook on the use of the Fed's balance sheet to fund the bipartisan highway bill.  I'm skeptical:

The bill exemplifies a new trend of legislative hostility toward the agency, which has expressed itself in Republican-sponsored bills calling for audits of the central bank, efforts to limit the Fed’s discretion in setting monetary policy and even calls for its dissolution.

Those bills had never gone far. But now, the tax-averse legislature has chosen to pay for new highway funding through two raids on the Fed’s budget. If this bill becomes law, it will represent a new and troubling interference by Congress in the affairs of the central bank.

The first raid drains the central bank’s “rainy day fund,” money set aside from revenue earned from its trading operations – it trades government debt to set monetary policy — to deal with the possibility of market losses.

The second raid reduces the dividend that the Fed has paid to its member banks. Since 1913, that dividend has been set at 6 percent. Under the highway bill, the new, lower dividend would track the rate of return on the 10-year Treasury note, currently around 2.2 percent, with the difference being used for highway funding.

Reactions and corrections welcome!

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

December 16, 2015
icon The Investiture of Tamika Montgomery-Reeves
Posted by Usha Rodrigues
 I told you where I'd be last Friday: proudly attending the investiture of Georgia Law alum Tamika Montgomery-Reeves.  Here's the report.
I had attended one investiture before in my life, of a federal judge. That one took place in a large venue-- I was in the top tier of seats, relatively far from the action--and was a joyous celebration of an impressive career. Having attended that ceremony, I thought I knew what to expect. 
I was wrong.  
Arriving at the Court of Chancery, I walked up to one of two busy but friendly officials and gave my name. She consulted a color coded seat map-- I was coded purple, a "friend."  My instructions: Sit on the right, in rows 3 or 4.  The first 2 rows were reserved for Tamika's family, who I think numbered at least 30, and many of whom had traveled from Georgia for the occasion.   
Rows 3 or 4?  
Readers, the ceremony was in a room 2/3 the size of the classroom in which I teach corporations.  Intimate about captures it. As I told my friend and former colleague Chuck O'Kelley, I had toyed with the idea of, if not live blogging, at least taking advantage of the anonymity of the audience to peck out some thoughts on my iPad as the ceremony unfolded. Oh, no, my friends.  There was no anonymity in the Chancery Court that day. On the contrary, the investiture ceremony felt intensely personal.   I snapped a few pics on my iPhone 4, but better quality shots are available here.  The ceremony was videotaped, and here are links to the first and second portions of the investiture.  Below are some of my personal highlights (with the time markers for the videos in parentheses).
Chancellor Bouchard presided.  When Tamika's 7-month-old son began crying during his opening remarks, he said without missing a beat, "Don't worry, Jackson, our litigants feel like that all the time..." (1:26 clip 1).  With those few words he did what all good speakers do when confronted with an audience of people from different walks of life, many of whom are dressed formally and unsure of what to expect--he made a joke (on the fly, no less) that set everyone at ease.  Chancellor Bouchard also got a little muddled on the order, and made a self-deprecating remark about messing things up (4:50). It was my  first time hearing him in court, and he was the epitome of graciousness. 
Pastor Toney Montgomery, Tamika's uncle, gave a powerful invocation (5:35).  Tamika's husband, Jeffrey A. Reeves, and her parents and parents-in-law gathered around her for her robing. Governor Markell offered remarks.    My friend Bill Chandler also made some remarks (18:10) and those of you that know him in person or by opinion know, they are well worth a listen. Bill reflected on Tamika's many fine qualities (21:00) and then offered her some advice as a judge (29:30 clip 1 and then the very beginning of clip 2).  You may disagree, but I heard his words as advice to the whole Chancery Court from a respected and beloved member of the Delaware judiciary about how to preserve and protect the special character of the Chancery Court.  Tamika's first words from the bench were also excellent and well worth a listen (4:55 clip).  She stressed the value of education and family support.  Most resonant for me personally was two anecdotes about Bill (13:50) and some reflections on the effect Chuck O'Kelley, then a professor at Georgia Law, had on her life and career (16:15).  Sometimes in the administrivia of my current life I lose sight of the profound impact a single professor can have on an individual. 
Two more thoughts.  First, at the reception afterwards the adjective I heard most often to describe the ceremony was moving. Governor Markell and the judicial nominating commission have been busy. The Chancery Court has turned over 100% in the past few years, and the Supreme Court as well.   Even people who had attended many recent investitures found Tamika's to be particularly moving. 

I'll end with this paragraph, versions of which I've typed and deleted at least twice.  Here goes: Chancellor Bouchard closed his remarks with these words: "Tamika is just the second woman and the first African American to serve on the Court, and some may say, "Well, it's about time!"  But I would like to think that we were just waiting, however patiently, for the right person, and that we found the right person, as many here today will attest." (4:00).  Chancellor Bouchard's words gave me pause because I, for one, do think Delaware took too long on this--that there must have been other women and minorities that would have made fine candidates for the Chancery Court before Tamika.  Still, I'm glad he said what he did. What he did in those few sentences was both acknowledge the historic importance of this particular investiture and then immediately turn the spotlight back onto Tamika as an extraordinary individual. Quite a grace note, when you come to think of it.


Permalink | Delaware | Comments (View) | Bookmark

Recent Comments
Popular Threads
Search The Glom
The Glom on Twitter
Archives by Topic
Archives by Date
February 2016
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29          
Miscellaneous Links