Archive for September, 2008
Investigation of FCC Ends, For Now
posted by Danielle Citron
In January 2008, the House Energy and Commerce Committee initiated a formal investigation into the FCC’s “regulatory procedures and practices.” At issue were concerns that agency officials abused how items were brought to a vote, leaked information to certain lobbyists and not to others, and insisted up moving forward with modifications of the ban on newspaper-broadcast cross-ownership depsite attempts to stop or delay agency action by members of FCC oversight committees in both Houses. According to Chairman John Dingell, the investigation would assess if the FCC’s procedures were conducted in a “fair, open, efficient, and transparent manner.” In March, the Committee asked FCC Chairman Kevin Martin for emails, memoranda, notes, phone conversations, meeting schedules and other information on the setting of FCC agendas, any limitations on communications between employees on official agency business, contacts with industry, personnel reassignments, among other things.
The Committee has just announced the end of its investigation. Now, the Committee is “considering how best to make our findings public, including a committee report.” The investigation did not include public hearings. Although the Committee members are no doubt distracted by the current fiscal crisis, one can hope that their report is issued soon.
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September 29, 2008 at 11:04 am
Posted in: Administrative Law, Media Law
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Thinking Through a Crisis
posted by Frank Pasquale
I’m trying to think through the larger lessons of the current economic turmoil. Though I can’t get to them immediately, these books are on the reading pile:
David A. Moss, When All Else Fails: Government as the Ultimate Risk Manager.
Frank Partnoy, Infectious Greed: How Deceit and Risk Corrupted the Financial Markets.
Robert Brenner, The Boom and the Bubble: The US in the World Economy.
Sheldon Wolin, Democracy Incorporated.
In the meantime, this interview with John Bogle is interesting, as is this with Gretchen Morgenstern.
Any other book/article recommendations from readers?
September 27, 2008 at 4:27 pm
Posted in: Economic Analysis of Law
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I’d Like to Buy the World a Coase
posted by Frank Pasquale
You can find some wonderful things on SSRN. Here’s a paper that sounds like a plan for world peace:
I show that in a true Coasean world – a world with no transaction costs – there would be no disagreement on moral questions. . . . There would be no disagreement on the question of capital punishment or abortion.
I’d like to buy the world a Coase, too . . . . or at least improve education. As the world approaches DeLillan surreality, perhaps it’s time to send in the clowns.
September 27, 2008 at 3:50 pm
Posted in: Economic Analysis of Law
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Two Women, Great Legacies
posted by Danielle Citron
This week marked the passing of two women journalists who pioneered great change in their times. According to The New York Times obituaries section, Nancy Hicks Maynard, the first black woman to be a reporter at the New York Times, died at 61. Ms. Maynard joined the New York Times in 1968 where she stayed until 1974. At the Times, she reported on race riots, student takeovers at Columbia and Cornell, and the death of Robert F. Kennedy. She also wrote for the paper’s education and science news departments. She founded the Maynard Institute for Journalism Education, which has trained hundreds of minority journalists in the past 31 years. Ms. Maynard and her husband, Robert C. Maynard, a columnist for the Washington Post, bought the financially-ailing Oakland Tribune in 1983. The Times reports that her interest in journalism was sparked after a fire destroyed her former elementary school in Harlem. Outraged by the way her community was described in the press, she “decided she could make a difference.” Indeed, she did.
And so did Mary Garber, a journalist who first began covering athletics more than 60 years ago when female sportwriters were barred from press boxes and locker-room interviews, who passed away on Sunday. When Ms. Garber began her career as a sportswriter, the craft was dominated by men. Coaches treated her badly, her fellow sportswriters ignored her, and professional associations excluded her. But she perservered, first covering high school sports and then on college athletics. She also highlighted the acheivements of black athletes in the 1950s, in particular at Winston-Salem State, a time when “news about black people ended up on the Sunday newspaper’s ‘colored page.’” The Hall of Fame basketball coach Clarence Gaines told a reporter in 1990 that “We had outstanding athletes . . . and Mary came to write about them when no one else cared. Mary was always trying to help the underdog.” She later wrote for The Twin City Sentinel in Winston-Salem and The Winston-Salem Journal. In 2005, at 89, she became the first woman to receive the Associated Press Sports Editors’ Red Smith Award, presented annually for major contributions to sports journalism.
September 26, 2008 at 6:39 pm
Posted in: Current Events
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The Troubles with Partisan Election Administration
posted by Danielle Citron
McClatchy Newspapers reports that a Republican county clerk in Colorado has been accused of using the state’s registration laws to suppress student voting, which is expected to heavily favor Democratic presidential nominee Senator Obama. The clerk apparently distributed a flier to the college that said: “What this means is that if your parents still claim you on their income tax returns, and they file that return in a state other than Colorado, you are not eligible to vote or vote in Colorado.” (Jon Greenbaum of the Lawyers Committee for Civil Rights Under Law explains that states and counties cannot adopt rules that one group of voters differently than others). Colorado Democrats also accused another county elections clerk, a delegate to the Republican National Convention, of taking other steps that would dampen voting by college students. That clerk admitted that he “mistakenly published information that was incorrect.” Local election officials in Virginia and South Carolina have similarly discouraged college students from voting. And, in Michigan, Democrats have filed a lawsuit seeking an order barring Republicans from using lists of people facing mortgage foreclosure proceedings as a basis for challenging their eligibility.
The partisan nature of election administration is troubling, both because it has long raised issues of deception to suppress voting and because it lowers the pubic’s confidence in the election process. As election law expert Richard Hasen has advocated, states should replace partisan election officials with a cadres of nonpartisan, professionalized election administrators on the state and local levels of government.
September 26, 2008 at 6:14 pm
Posted in: Administrative Law, Current Events
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Reading the Tea Leaves
posted by Dave Hoffman
I’ve been reading the Corner today. Based on this, this, and this, it looks like the Republican Study Committee is going to give up on its unworkable, ideologically blinkered, and foolish plan to deregulate the banking industry and give it a tax break. The RSC, and John McCain, are terrified of being blamed for shutting down the economy. Which could happen as early as Tuesday, as Jonathan Lipson points out in a comment to my earlier post.
My prediction: a bill with an insurance option (presumably priced so that no one will actually buy it) and, possibly, some of the nonsensical transparency solutions thrown into the mix. Passed by Sunday. And then? Full time employment for the administrative law bar.
I’ll be in Toronto for the weekend at CLEA. If I turn out to be wrong about the bailout, maybe I’ll just stay there for the winter. I’ve heard it’s nice.
September 26, 2008 at 2:13 pm
Posted in: Corporate Law
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Waffle, Flip-Flop, and Signs of Armageddon
posted by Deven Desai
Whew. McCain is going to the debate. No more, Should I Stay Or Should I Go, this whole economic problem is about ME, ME, ME. Then again there are a few debates to go so anything is possible. I used to say between Obama, Clinton, and McCain I was happy for the country. Of course I have one I think is the best, but if any of them won, I thought the country was going to have some good leadership. For the record I like Bush senior. The man went as far as international law allowed and raised taxes when he had to do so and knew it might bite him later. McCain’s slide from someone with a philosophy to a pandering, madman is just sad. And yes he is flip-flopping, waffling and so on. Just watch
Maybe it isn’t his fault. After all, when the headlines on a web page with 300 million readers a month offers McCain Will Attend Debate (which should not be a story unless manufactured by grandstanding; see the video above to understand this point), Chinese Gymnast Explains Age Controversy, Why Space Tourist Wants His $21 MILLION Back, WaMu Collapse Is Largest U.S. Bank Failure Ever, Man Crosses English Channel On Jet-Propelled Wing, Congress Restarts Troubled Bailout Talks, and Facebook Profiles Can Reveal Narcissism Study Suggests, maybe such moves are the only way to get attention.
And as predictions are in vogue: A NeoPunk Rock movement will surge as people express anger at idiocy (see also Burn After Reading) and marathon dancing will return but as a reality show (which are in a way marathon dancing updated).
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September 26, 2008 at 12:29 pm
Posted in: Uncategorized
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The Fleeting Expletives Case
posted by Timothy Zick
In preparation for a Supreme Court Preview event here at William & Mary, I’ve been reading the briefs in FCC v. Fox, the so-called “fleeting expletives” case. I am to serve as one of the “justices” at our simulated oral argument (the Supreme Court will hear argument on November 4), in which Erwin Chemerinsky and Tom Goldstein will be advocates. The case is presented to the Court as a run mine administrative law case. For those not familiar with the case, it involves review of the FCC’s decision in 2004 to sanction broadcast of even isolated or inadvertent (“fleeting”) expletives. The policy change seems to have been animated by fleeting utterances of variations of the words “fuck” and “shit” by Bono, Cher, Nicole Richie, and a host of “shock jocks.” At the risk of having myself recused, I want to briefly address what Fox refers to in its merits brief as “the 800 pound gorilla in the corner of the room” — whether the FCC’s indecency regime comports with the First Amendment.
In its “contextual” enforcement since the change of policy, the FCC has held that the use of expletives in Saving Private Ryan and on a morning news program were not indecent, while the use of expletives in a documentary on the blues was sanctionable. In any other context, of course, this sort of regime would raise serious and likely fatal First Amendment problems. That it does (or may) not in the broadcast context is owing to the Court’s decision in FCC v. Pacifica Foundation (1976), which narrowly permitted the FCC to move the “verbal shock treatment” of the Carlin “Filthy Words” monologue and other “indecent” expression into a “safe harbor” (10 p.m. to 6 a.m.) when children would be less likely to be listening and watching. If the First Amendment is the “800-pound gorilla,” Pacifica is the elephant in the room in the pending case. Its limited grant of authority to the FCC was largely premised on (1) the “uniquely pervasive presence” of broadcast media and (2) the fact that broadcast content was “uniquely accessible to children.” But today neither of these premises seems factually correct. Cable, Internet, and other media are as or likely more “pervasive” than broadcast, and all are accessible to children. In addition, technologies like the V-Chip would seem to offer less restrictive alternatives to the expansive indecency regime now used by the FCC. Finally, as Fox notes, several decisions subsequent to Pacifica have invalidated indecency standards very similar to the one enforced by the FCC. For these and other reasons, in the final portion of its brief Fox argues that the FCC’s present indecency regime violates the First Amendment.
I think there is some merit to Fox’s arguments, although the Court need not and likely will not go this far in the pending case should it decide to reject the FCC’s policy change. But is it time to go even further, and overrule Pacifica? I’ve always had some trouble accepting the Court’s rationale in Pacifica, including the notion that the broadcast of certain words is akin to an unavoidable “assault.” But at this point the decision seems like a glaring anachronism. I admit that in a world slathered with so many forms of indecency, there is an argument for preserving at least this one safe haven or zone of decency. And I have no sympathy for the networks if, as some suspect, their challenge is based on a perceived competitive disadvantage with cable in the race to the cultural bottom. But would broadcast really devolve into an expletive free-for-all if the FCC stopped policing for “indecent” words? (It didn’t in the decades leading up to the FCC’s policy change.) With so many communication/entertainment options and filtering technologies available, is occasionally indecent language on broadcast stations still a substantial concern? To how many people? (Nearly all of the 234 complaints in the Bono incident were mass-generated by a single group.) In the end, I’m just not sure that the FCC’s regime, including its most recent regulatory “swear jar” approach, is worth the candle. I wonder what others, particularly parents, think.
[Update: According to a recent survey, 39% would extend indecency restrictions currently applicable to cable and satellite television.]
September 26, 2008 at 10:48 am
Posted in: First Amendment
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Throwing Executive Salaries to the Mob
posted by Nate Oman
Things are shifting so rapidly that it is dangerous to talk about consensus, but there does seem to be consensus that the executives of institutions that may benefit from the unloading of toxic securities need to take some sort of a hit. Why? It seems to me that there are a number of possible answers, some of them good some of them not.
In a conversation at the school bus stop the other morning, I heard the suggestion that the financial markets were in trouble because the executives were sucking so much of the value out of market with their huge salaries. “How can some people get paid hundreds of millions of dollars,” one parent said, “and there still be money left to pay mortgages.” I bit my tongue, but this sort of talk is just mathematically ignorant. The securitized debt market is $13 trillion and the credit derivatives market is $64 trillion. A couple of hundred million dollars is chump change. Still it is important to realize that there are a lot of people out there who think like this, and they vote.
A similar but slightly different argument is that the executives are morally culpable for the meltdown. It is not that their salaries are big enough to move markets on their own, but rather that they made a lot of stupid decisions that are costing other people a lot of money and they ought to be punished. The argument here, I take it, is frankly retributive. There has been wrong-doing and it ought to be punished. Alternatively, it may be based on some notion of unjust enrichment. The executives are profiting from their malfeasance and ought not to be allowed to do so.
September 26, 2008 at 10:35 am
Posted in: Corporate Law
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This Post May Already Be Moot
posted by Neil Buchanan
I had planned to write today about the next steps in dealing with the financial crisis, following the agreement in Washington on the major contours of a bailout plan. Last night, however, the plan fell apart, with House Republicans walking away from the negotiations. The nature of any actions at the Federal level — as I write at 8:30am EDT on Friday — are thus very much in doubt. With the situation in flux, I will take the opportunity here to offer a few thoughts on the crisis and a number of ways that it might yet be handled, either picking up where we left off or starting from scratch.
September 26, 2008 at 8:37 am
Posted in: Uncategorized
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John McCain’s Unworkable Plan to Deregulate and Insure Our Way Out of the Crisis
posted by Dave Hoffman
Tonight, John McCain, by tacitly lending his support to the House Republican revolt against the Grand Compromise Bailout Plan, succeeded (?) in causing the negotiations to fail, at least for the time being. Expect a very black Friday on the market.
In the meantime, I’m trying to figure exactly what the McCain-backed counter-proposal means. The center piece is private-party funded insurance, with the premium price set by the government. Here’s the key line in the proposal: “The Treasury Department can design a system to charge premiums to the holders of MBS to fully finance this insurance.” It can? How? Let’s explore three possibilities.
First, assume the government would just set the insurance premiums at some very high number. Let’s even call it extortionate, since that’s what the markets today would force you to pay to take on that kind of risk. Why would private companies agree to pay this rate? If the answer is that the companies will be forced to buy insurance, I don’t see how that wouldn’t immediately lead to those companies simply declaring bankruptcy. That, my friends, isn’t the kind of liquidity solution we’re looking for. Rather, it’s what we’ve got today.
Second, assume that the government tries to price insurance at a low rate. Everyone pays the premiums, happily, because as I understand the proposal the government will be on the hook for failure, and we’ve now just done the bailout without any meaningful governance reforms.
Third, assume the government tries to price the insurance accurately, i.e., to reflect the likelihood that it will have to pay-out claims. Super. But figuring out the default risk is exactly the problem that the market has tried, and failed, to solve over the last year. Tens of thousands of the brightest, most motivated, brains on Wall Street have thrown themselves at this sucker. And the House Republican Study Committee thinks that the Federal Government’s Treasury Department will be able to figure this out over the next few days.
Maybe I’m missing something, but the insurance plan seems, on its face, to be a joke, and not intended as a real solution to the liquidity crisis. There must be something else here.
September 26, 2008 at 12:05 am
Posted in: Corporate Law
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Agreement on Principles
posted by Lawrence Cunningham
Following is the full text of an Agreement on Principles circulated today at 2:24 pm EST by Senate Banking Committee:
1. Taxpayer Protection
a. Requires Treasury Secretary to set standards to prevent excessive or inappropriate executive compensation for participating corporations
b. To minimize risk to the American taxpayer, requires that any transaction include equity sharing
c. Requires most profits to be used to reduce the national debt
2. Oversight and Transparency
a. Treasury Secretary is prohibited from acting in an arbitrary or capricious manner or in any way that is inconsistent with existing law
b. Establishes strong oversight board with cease and desist authority
c. Requires program transparency and public accountability through regular, detailed reports to Congress disclosing exercise of the Treasury Secretary’s authority
d. Establishes an independent Inspector General to monitor the use of the Treasury Secretary’s authority
e. Requires GAO audits to ensure proper use of funds, appropriate internal controls, and to prevent waste, fraud, and abuse
3. Homeownership Protection
a. Maximize and coordinate efforts to modify mortgages for homeowners at risk of foreclosure
b. Requires loan modifications for mortgages owned or controlled by the Federal Government
c. Direct a percentage of future profits to the Affordable Housing Fund and the Capital Magnet Fund to meet America’s housing needs
4. Funding Authority
a. Treasury Secretary’s request for $700 billion is authorized, with $250 billion available immediately and an additional $100 billion released upon his or her certification that funds are needed
b. The final $350 billion is subject to a Congressional joint resolution disapproval
September 25, 2008 at 5:01 pm
Posted in: Current Events
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Real Estate’s Latest Game of Chance
posted by Kaimipono D. Wenger
Today’s NYT contains an article titled “Real Estate’s Latest Game of Chance.” No, it’s not about the bailout. But it could be. The article discusses the rise of raffles as a real estate sales device for property in a falling market:
Two years ago, Ms. Crawford and her husband, Dennis Kelly, moved from their log house in Hancock, Md., to a renovated 1929 farmhouse nearby, which they bought for $375,000. They put their old house, which they owned outright, on the market, planning to pay for the new one with proceeds from the sale. But the real estate market cooled, and the house sat unsold. Two months after the move, saddled with a costly mortgage, the couple reluctantly put their new farmhouse up for sale; after more than a year, it didn’t find a buyer, either. “Soon it was going to go into foreclosure,” said Ms. Crawford, a 60-year-old elementary school teacher, a hint of the panic of that time creeping into her voice.
Desperate, Ms. Crawford came up with a novel strategy: she would hold a raffle. Tickets would go for $100 each, and one lucky person would win the farmhouse. If they could sell enough tickets, they could walk away debt-free.
Last December, the couple teamed with a real estate agent and a local charity and set about publicizing the raffle, posting flyers and calling news outlets. By the time the drawing was held at a local country club this past March, they had sold almost 6,500 tickets, raising enough money to cover the cost of the house along with a surplus of more than $200,000 that went to the charity. Having already moved back to the log house, they counted themselves lucky to still have a place to live.
Now, I’m sure our lawmakers are duly considering all options. But let’s look at the picture, here. We have hard-to-value assets, a skeptical market, dropping prices. This is exactly what the Crawford-Kellys faced. Maybe it’s time for the Fed to skip the market altogether, like the Crawford-Kellys did. Maybe it’s time for . . . bailout raffle.
September 25, 2008 at 4:45 pm
Posted in: Current Events
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Barack Obama, meet . . . Barack Obama
posted by Jaya Ramji-Nogales
After two weeks of watching our economy implode, taking your retirement plan, your bonus, and the value of your home down the toilet, you people need a little comic relief. That’s what I’m here for. For those who haven’t been listening closely to their NPR, it turns out that there are at least eight Barack Obamas running for election in Brazil this year. Yes, you heard that right. Under Brazilian law, it turns out, candidates are allowed to run for office under any name, as long as it’s not offensive. So eight aspiring politicos, including a former air conditioner salesman and a man claiming a resemblance to Obama (but not actually bearing one), have officially changed their names in hope that it will bring them victory in October’s municipal elections. According to a very fun but very unscientific poll by The Economist, Brazilian voters would hand victory to Obama over McCain, and one re-named candidate saw his popularity rise (from third place to a tie for first) after changing his name. What’s that you were saying about lipstick on a pig?
September 25, 2008 at 4:43 pm
Posted in: Humor
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The Fourth Amendment: Its History and Interpretation
posted by Thomas Clancy
I have a new book on the Fourth Amedment that I hope some of you might find useful. Due to the wide applicability of governmental intrusions–ranging from countless thousands of daily intrusions at airports, traffic stops, drug testing, obtaining digital evidence, traditional criminal law enforcement practices, regulatory inspections, and many other searches and seizures–the Amendment is the most commonly implicated and litigated part of our Constitution.
This treatise is designed to be an accessible and authoritative resource for scholars, judges, practitioners, and others on the Fourth Amendment. It comprehensively treats United States Supreme Court caselaw. It takes a structural approach to the Fourth Amendment, addressing foundational questions: What is a search? What is a seizure? What does the Amendment protect? Who does it protect? When is it satisfied? When does the exclusionary rule apply? The treatise is organized by topic so a reader can have ready access to current doctrine and is able to examine in additional sections how current doctrine developed. The historical events and the Court’s development of search and seizure principles provide context to and perspective on current doctrine.
It is published by Carolina Academic Press and additional information about the book, including the front material and how to order, can be found at www.cap-press.com/books/1795
September 25, 2008 at 3:59 pm
Posted in: Criminal Procedure
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A Shoe Drops
posted by Dave Hoffman
This isn’t terrific news:
Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.
September 25, 2008 at 11:11 am
Posted in: Corporate Law
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On the Simultaneous Necessity and Impossibility of Deeper Analysis of the Speculative Economy
posted by Frank Pasquale
I’ll be off the blog the next week or so finishing a book chapter and doing a conference. But I wanted to make one final note on the blitzkrieg bailout bill.
This bailout has people all over the ideological spectrum feeling queasy. Conservative republicans call it socialism; progressives are deeming it crony capitalism at its worst. It may well end up being none of these things, if it is well-administered and we follow something akin to the Swedish model of demanding equity stakes in the bailed out companies (and here’s another possible precedent). However, the fire-drill manner in which we’re doing this inevitably brings to mind Chris Hoofnagle’s dark portrait of deregulationism in The Denialist Deck of Cards–the sinking feeling that power brokers will tell us “there’s no need for regulation” when times are good, and “no time to figure out good regulation” when the inevitable emergency materializes.
But even more disheartening to me is the fact that we may be missing an opportunity to fundamentally rethink how we measure the performance of the economy.
September 25, 2008 at 10:30 am
Posted in: Economic Analysis of Law
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Where’s the SEC?
posted by Lawrence Cunningham
Credit market dramas have put the Securities and Exchange Commission in the background, where Chairman Chris Cox is being stung by rebuke for his neglect of investor interests and capital market safety, while fiddling away with luxury items few care about like high-tech financial reporting called XBRL. Now stalled yet again, despite earlier exuberance, is the SEC’s proposal to switch the US from its own accounting standards (GAAP) to new international financial reporting standards (IFRS).
Mr. Cox formally began to back this initiative aggressively early last year. He staked much of his legacy on it. Auditors and managers favor it and benefit from it. Investors and auditing standard setters express serious reservations about the plan, which many say has been rushed. Even the SEC seemed to accept this criticism, most recently saying it would propose a longer timetable for the shift than Mr. Cox and the SEC initially imagined.
Still, the SEC promised a month ago, on August 27, that a Release outlining milestones on this road would be forthcoming shortly. As of today, the SEC has issued no such Release, despite the SEC Chief Accountant, Conrad Hewitt, and Corporate Finance Chief, John White, describing its contents and assuring the public one would be forthcoming “this summer.”
Why not?
September 24, 2008 at 7:24 pm
Posted in: Securities
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Thinking Transcendentally
posted by Thomas Crocker
The mortgage crises follows a pattern of reasoning analogous to that sometimes followed in the national security context. When it comes to national security, we are warned that the Constitution is “not a suicide pact.” This catch-phrase is used for the argument that in times of national security threats, constitutionally protected civil liberties should not be used to constrain the necessary actions of executive officials. Why? Because security is a necessary condition for the enjoyment of civil liberties. Without security, so the argument goes, we can have no liberty. Thus, when times are tough, we should not allow constitutional commitments to get in the way of allowing officials to act as necessary to protect national security. (I critique a specific application of this argument here).
Similar reasoning seems to be at stake in the present financial crisis. In nearly as direct a catch-phrase, we are warned that leaving financial obligations untouched as they are would be an economic “suicide pact,” leading to unpredictable, though likely dire, consequences for the country as a whole. (Bernanke: action is “urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and our economy.”) In times of threat to the overall security of the economy, background beliefs in individual economic decisions and legal obligations (more or less, some version of laissez faire capitalism) should not be deployed to constrain the necessary actions of executive officials. Why? Because structural security of the economy is a necessary condition for the good of us all. Thus, when economic times are particularly tough, we should empower executive officials to act as necessary to protect economic security.
Both of these rationales depend on a form of transcendental argument: the necessary condition for the possibility of X (enjoying liberty), is Y (the provision for security). My central question is: Can We Think Transcendentally about Something Other Than Security?
September 24, 2008 at 7:01 pm
Posted in: Current Events, Law and Inequality, Politics
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The Draft Bailout Plan: Say Goodbye to Director Primacy
posted by Dave Hoffman
Via TPM comes the executive summary of the draft bailout plan circulating on the hill. Looks like Dodd’s bill, though with language about executive compensation that provides a “perverse incentive” for “inappropriate or excessive risk taking”. Additionally, participating companies have to permit extremely broad shareholder democracy! (This would be a pretty extraordinary change in current practice.) There also language about helping mortgagees that Frank & Kaimi ought to like.
Notably absent: any discussion of the cost of the program or its funding; a bailout of foreign firms; a pricing mechanism.
More later. Off to teach Corps, where I will, no doubt, speculate wildly about what this does to the future of Delaware’s preeminence as a source of corporate law.
September 24, 2008 at 5:50 pm
Posted in: Corporate Law
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