Archive for the ‘Corporate Law’ Category
UCLA Law Review 57:1 (October)
posted by UCLA Law Review
Volume 57, Issue 1 (October 2009)
Articles
| From Privacy To Liberty: The Fourth Amendment After Lawrence | Thomas P. Crocker | 1 |
| Who Can Sue Over Government Surveillance? | Scott Michelman | 71 |
| Leverage in the Board Room: The Unsung Influence of Private Lenders in Corporate Governance | Frederick Tung | 115 |
Essay
| After the Bailout: Regulating Systemic Moral Hazard | Karl S. Okamoto | 183 |
Comments
| Evaluating The Public Interest: Regulation Of Industrial Hemp Under The Controlled Substances Act | Christine A. Kolosov | 237 |
| Improving The Education Of California’s Juvenile Offenders: An Alternative To Consent Decrees | Stefanie Low | 275 |
| The Right to Control One’s Name | Julia Shear Kushner | 313 |
Discourse
| Getting the Framers Wrong: A Response to Professor Geoffrey Stone | Samuel Calhoun | |
| The Perils of Religious Passion: A Response to Professor Samuel Calhoun | Geoffrey Stone |
Th UCLA Law Review is also pleased to announce the launch of a our new website.
October 30, 2009 at 4:21 pm
Posted in: Civil Rights, Constitutional Law, Corporate Law, Law Rev (UCLA), Privacy, Privacy (Electronic Surveillance), Privacy (Law Enforcement), Uncategorized
Print This Post
2 Comments
The Yale Law Journal Online: Citizens Not United: The Lack of Stockholder Voluntariness in Corporate Political Speech
posted by Yale Law Journal
The Yale Law Journal Online is pleased to announce the publication of Citizens Not United: The Lack of Stockholder Voluntariness in Corporate Political Speech by Elizabeth Pollman, a Stanford Law Fellow and former practitioner at Latham & Watkins LLP. Pollman’s piece covers the potential for sweeping changes to corporate political speech law in light of the Supreme Court proceedings in Citizens United v. Federal Election Commission.
October 26, 2009 at 1:30 pm
Posted in: Corporate Law, Law Rev (Yale), Law Rev Forum, Media Law, Politics, Supreme Court
Print This Post
No Comments
Smart or Not So Smart Money; The Limits on Derivatives and Regulating Them
posted by Deven Desai
The New York Times op-ed by Calvin Trillin, Wall Street Smarts, has a parable-like quality with the two characters meeting and exchanging wisdom. The lesson offered by the wiseman: “The financial system nearly collapsed,” he said, “because smart guys had started working on Wall Street.” The piece goes on to explain why that is a good explanation. It seems that the not-so-smart sat at the top of the heap and ran the companies: “Guys who didn’t have the foggiest notion of what a credit default swap was. All our guys knew was that they were getting disgustingly rich, and they had gotten to like that.” There is also an claim about what is enough and what is greed in this tale. I leave it to others to debate or verify these ideas (our own Mr. Cunningham has been a favorite for me on these issues). Now, a paper by some folks at Princeton may show that not even the smart guys knew what they were doing.
As Andrew Appel explores in his post Intractability of Financial Derivatives, the computer science world’s Intractability Theory may better explain the derivative world than other theories. (the theory is used for DRM, cryptography, and more). The paper is Computational Complexity and Information Asymmetry in Financial Products (pdf) by Sanjeev Arora, Boaz Barak, Markus Brunnermeier, and Rong Ge.
For those who are interested in the topic and/or understand the math and theory behind the risk shifting involved in this area, check out Andrew’s post. He does a great job explaining how the paper applies to a CDO (collateralized debt obligation). If you need a little more to understand why this paper and its ideas are important, consider Andrew’s take away
In principle, an alert buyer can detect tampering even if he doesn’t know which asset classes are the lemons: he simply examines all 1000 CDOs and looks for a suspicious overrepresentation of some of the asset classes in some of the CDOs. What Arora et al. show is that is an NP-complete problem (”densest subgraph”). This problem is believed to be computationally intractable; thus, even the most alert buyer can’t have enough computational power to do the analysis.
Arora et al. show it’s even worse than that: even after the buyer has lost a lot of money (because enough mortgages defaulted to devalue his “senior tranche”), he can’t prove that that tampering occurred: he can’t prove that the distribution of lemons wasn’t random. This makes it hard to get recourse in court; it also makes it hard to regulate CDOs.
UPDATE: It appears from the comments to Andrew’s post that CDO and derivatives are not precisely the same thing. In addition, the comments explore the limits of the study. It is a good discussion.
ALSO check out the FAQ for the paper. It addresses many issues that the initiated may want to probe.
October 18, 2009 at 9:17 am
Tags: computer science, derivatives, securities law
Posted in: Corporate Finance, Corporate Law, Securities, Securities Regulation
Print This Post
4 Comments
What Factors Correlate With Veil Piercing Success?
posted by Dave Hoffman
When Does This Get Pierced?
If you’ve made it through the content of complaints, some data about who gets sued, and descriptive statistics about wins and losses, you basically are pot committed to this veil piercing project. In this post, I’m going to exploit that commitment by describing the results of our statistical analysis of two different kinds of success that plaintiffs may achieve in veil piercing cases: (1) on motions; and (2) at the case level. If you don’t care to follow me beyond the jump, here’s the bottom line (from our abstract):
“Voluntary creditor causes of action promote veil piercing; LLCs are in very limited circumstances better insulated from veil piercing claims than corporations; undercapitalization is strongly associated with success while conclusory grounds like “façade” and “sham” are not; and defendants’ legal sophistication is predictive of plaintiff failure. Extra-legal factors play a more striking and counterintuitive role. Plaintiffs suing companies with few employees are much more likely to win veil piercing motions, and obtain relief in cases, than plaintiffs suing companies employing many workers. This results holds even when controlling for legally-relevant variables. Contrary to both theory and previous empirical work, we also find that judicial liberalism is inversely related to the likelihood of plaintiff success.”
October 9, 2009 at 6:51 am
Posted in: Contract Law & Beyond, Corporate Law, Economic Analysis of Law, Empirical Analysis of Law, Law School (Scholarship)
Print This Post
One Comment
What Does Veil Piercing Success Mean Anyway?
posted by Dave Hoffman
If you look at opinions, winning in a veil piercing case is pretty easy to define: did the court agree to pierce the veil, reaching through an entity to its shareholders. If you were inclined, you could model success at those terminal moments in cases, asking which factors (described in the opinions) correlated with courts agreeing to pierce.
There’s value in this approach, not least because opinions shape reality. But there’s a problem too. Not only are opinions unrepresentative, but they come late in cases. The result is an extreme form of selection. It’s not clear (to me, anyway) what the null hypothesis regarding the effect of independent variables ought to be for late-stage dispositions.
Dockets offer the promise of a different approach: asking which factors correlate with success or failure early in cases. Further, assuming that adjudicated motions teach the parties about the strength of their cases, and that they settle strategically, we can even start to learn from the timing and incidence of settlement.
In this post, I’m going to relay some descriptive statistics about the veil piercing successes that plaintiffs achieved in our data. (I’m continuing to pull the data and some text from our paper.) To those who are getting annoyed by all of these posts, I’m sorry! I’ve been living with this project for a long time — I’m excited to finally share it publicly.
October 8, 2009 at 7:24 am
Posted in: Contract Law & Beyond, Corporate Law, Economic Analysis of Law, Empirical Analysis of Law, Law Practice, Law School (Scholarship)
Print This Post
2 Comments
Who Gets Sued in Veil Piercing Cases?
posted by Dave Hoffman
As I described yesterday, Christy Boyd and I have collected a representative sample of veil piercing complaints and have written up some of our analysis of that data in Disputing Limited Liability. Before talking about the meat of the project — the wins and losses — I’ll describe another piece of information that you can extract from complaints but not opinions: who gets sued. In the 690 cases in our sample, plaintiffs sought to pierce the veil of 870 entities. With the generous support of Temple’s Law Library, we purchased information about those entities from Dunn & Bradstreet, including the number of employees and revenues per firm, corporate structure, and organizational home. After the flip, I’ll give you a taste of our findings.
October 7, 2009 at 7:28 am
Posted in: Corporate Law, Empirical Analysis of Law
Print This Post
No Comments
The Content of Veil Piercing Complaints
posted by Dave Hoffman
Over the last two years, Christy Boyd and I have been working to collect and analyze a representative sample of federal district court veil piercing cases. (Previous blogging: here on ERISA and here on weird complaints.) We now are ready to circulate the first paper arising from the data — there will be at least two others. That paper, Disputing Limited Liability, is now up on SSRN and is forthcoming in the Northwestern Law Review. I figured that having spent so much time collecting the data, I might as well get a few blog posts out of talking about our findings! I’m going to start today with some information about the kinds of complaints that plaintiffs file. In future posts, I’ll talk about who gets sued, how to model litigation in light of selection effects, the kinds of factors that influence plaintiffs’ success, and the larger implications of our findings for lawyers and scholars.
October 6, 2009 at 1:45 pm
Posted in: Corporate Law, Empirical Analysis of Law
Print This Post
5 Comments
Voting as Veto
posted by Michael Kang
It’s been great to guest blog at Concurring Opinions, but unfortunately for me, my stint here has come to a close. I’ve enjoyed it. Thanks to Dan Solove, Danielle Citron, and their colleagues for hosting me during the last couple months.
I thought that I would use my last post to introduce a work-in-progress, titled Voting as Veto (forthcoming early next year in the Mich. L. Rev.). The article began long ago with a simple observation: When my wife and I (pre-baby) had to decide where to go out for dinner, I realized that I rarely had an affirmative preference for a particular restaurant or type of food on a given night. Instead, I found myself acting almost exclusively on what I call “negative preferences,” or preferences against certain outcomes. I mainly preferred not to visit a particular restaurant or have a particular type of food on a given night. Besides the desire to reserve a veto against certain outcomes, I was reasonably indifferent most of the time about where to go otherwise. It struck me that this type of negative preference was probably common in more formal, less mundane contexts for voting that I study in my research. Although there are many forms of voting that implicitly account for negative preferences in various ways, I found very little in the legal and political science literature developing the notion of negative preferences, or systematically assessing a conception of voting as veto. Voting as Veto is my attempt at both.
In addition, I am currently working on a related essay that applies the insights of Voting as Veto to corporate shareholder voting, the subject of public attention in recent months. Unfortunately, I haven’t posted a draft of either piece on SSRN quite yet. Voting as Veto is further along and currently in the middle of the citechecking process, but as a result, it is in many pieces at the moment. However, I plan to post drafts as soon as I can, so please feel free to email me if you have any questions or comments. Thanks again.
September 22, 2009 at 5:43 am
Posted in: Corporate Law, Legal Theory, Politics
Print This Post
2 Comments
Bernie Madoff and the Unfortunate Consequences of Celebrity Bias
posted by Danielle Citron
Celebrity is intoxicating. We have long been willing to play the fool to the rich and powerful, even if that means turning a blind eye to signs of trickery. In the late 1980s, a 37-year-old con artist convinced Duke University administrators and students that he hailed from the wealthy Rothschild family of France despite the fact that he spoke no French, drove a run-down car, and offered clipped out magazine articles to show his family’s homes. During a two-year charade, the imposter borrowed (stole) thousands of dollars from Duke and joined a fraternity. (I was an Duke undergraduate at the time, but alas did not know him). More recently, Christopher Chichester tricked many into believing that he was a Rockefeller despite his gauche manners and outrageous claims (e.g, that he owned “the key to Rockefeller Center”). As Clark Rockefeller, he gained admission to exclusive clubs and married a partner at McKinsey Consulting. Only after Mr. Chichester kidnapped his daughter from his ex-wife did the police discover his true identity and connection to unsolved murders.
Perhaps such celebrity bias had some role in the SEC’s bungling of the Bernie Madoff fiasco. On Thursday, the S.E.C.’s Inspector General’s Report explored why the agency missed so many “red flags” about Madoff since 1992. The report discussed missed leads, bureaucratic snafus, and investigators’ inexperience. Investigators were far too believing because they were simply awed by him. One investigator described Madoff as “a wonderful storyteller” and a “captivating speaker.” As with the faux Rockefeller and Rothschild incidents, Madoff’s ruse worked for so long despite the clues of foul play perhaps because investigators and investors could not shake their sense of Madoff as a rich, powerful, and trusted financial guru. Madoff’s celebrity reputation anchored their thinking, permitting Madoff to get away with his scheme for far longer than it should have. As Madoff’s victims’ stories attest, celebrity bias had profoundly destructive consequences.
StockXchange Image; Wikimedia Commons Image
September 5, 2009 at 3:39 am
Posted in: Behavioral Law and Economics, Corporate Law, Culture, Current Events, Psychology and Behavior, Securities Regulation, Uncategorized
Print This Post
No Comments
UCLA Law Review 56:6 (August 2009)
posted by UCLA Law Review
Volume 56, Issue 6 (August 2009)
Articles
Overcoming Overdisclosure: Toward Tax Shelter Detection (pdf)
Joshua D. Blank
First Amendment Enforcement in Government Institutions and Programs (pdf)
Gia B. Lee
Ezra Pound’s Copyright Statute: Perpetual Rights and the Problem of Heirs (pdf)
Robert Spoo
Comments
Nonwaiver Agreements After Federal Rule of Evidence 502: A Glance at Quick-Peek and Clawback Agreements (pdf)
Jessica Wang
Narrowing the Definition of “Dwelling” Under the Fair Housing Act (pdf)
Karen Wong
Addressing Youth Bias Crime (pdf)
Jordan Blair Woods
September 2, 2009 at 3:17 pm
Posted in: Constitutional Law, Contract Law & Beyond, Corporate Law, Intellectual Property, Law Rev (UCLA), Race
Print This Post
No Comments
Updating Corporations Book
posted by Lawrence Cunningham
My co-editor, Linda Smiddy (Vermont), and I are finishing a 135-page 2009 supplement to our casebook, Corporations and Other Business Organizations. This is the first supplement we’ve done since the current 2006 edition, when I joined the book.
We prepared the supplement with a view towards our next edition, due out in 2010. A lot has happened in this field in those few years and it is a wonderful exercise to bring it all together.
For those teaching Corporations and/or Business Organizations, Linda and are drafting the following letter highlighting what’s new. We are writing it put to let those who use our book, or who might do so, know what they can expect in the supplement and next edition.
I’m posting the draft here for the same purpose, and to invite suggestions from current or prospective users of the book on how we can make it more useful. We want to preserve the enormous value put into it by our predecessor editors, the late Larry Soderquist and the late Al Sommer, as well as Pat Chew, while giving it a fresh, thoughtful and still practical utility. Read the rest of this post »
July 8, 2009 at 12:27 pm
Posted in: Corporate Law
Print This Post
No Comments
What Evil Lurks in the Hearts of Men?
posted by Dave Hoffman
When students, friends and family have asked me what I think “happened” to cause our current financial crisis, my response has been an embarrassed shrug. Embarrassed because (as a corporate law teacher) I’m expected to have clear answers. A shrug because the crisis doesn’t have a obvious anecdote or story that explains it, and lacks a clearly defined evil doer who might be plausibly blamed. The best candidate – who I’ve thrown out there to quiet persistent friends – is Joe Cassano, formerly head of AIG’s Financial Product’s Division, and the so-called “patient zero” in the crisis.
Now comes the myth-killer, Michael Lewis, with a must-read article in Vanity Fair. He starts by reminding us that “nearly a year after perhaps the most sensational corporate collapse in the history of finance, a collapse that, without the intervention of the government, would have led to the bankruptcy of every major American financial institution, plus a lot of foreign ones, too, A.I.G.’s losses and the trades that led to them still haven’t been properly explained.” And he then takes a crack at that problem, suggesting that AIG’s traders (i) made a bad (negligent?) bet on the likely course of the housing market, (ii) didn’t unwind their positions fast enough; (iii) fell victim to a liquidity crunch caused by covenants tied to their AAA rating; (iv) were made into a convenient villain by the media; and (v) like everyone else, were outsmarted by Goldman.
And how about Cassano? Here’s the key – and dispiriting – paragraph:
[T]he A.I.G. F.P. traders left behind, much as they despise him personally, refuse to believe Cassano was engaged in any kind of fraud. The problem is that they knew him. And they believe that his crime was not mere legal fraudulence but the deeper kind: a need for subservience in others and an unwillingness to acknowledge his own weaknesses. “When he said that he could not envision losses, that we wouldn’t lose a dime, I am positive that he believed that,” says one of the traders. The problem with Joe Cassano wasn’t that he knew he was wrong. It was that it was too important to him that he be right. More than anything, Joe Cassano wanted to be one of Wall Street’s big shots. He wound up being its perfect customer.
“A need for subservience in others and an unwillingness to acknowledge his own weaknesses.” The flip side of authority and confidence, and the hallmarks of an executive who has passed many gates in the corporate advancement tournament. The law lacks purchase on this kind of evil – if that is what it is.
July 7, 2009 at 2:50 pm
Posted in: Corporate Finance, Corporate Law
Print This Post
One Comment
“A great vampire squid wrapped around the face of humanity”
posted by Kaimipono D. Wenger
That’s how Matt Taibbi describes Goldman Sachs in the opening paragraph of his 12-page Rolling Stone article (which, as far as I can tell, is available online only here, in moderately annoying scanned form). From there, Taibbi picks up steam. For instance, we learn that:
The bank’s unprecedented reach and power have enabled it to turn all of America into one giant pump-and-dump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere — high gas prices, rising consumer credit rates, half-eaten pension funds, mass layoffs, future taxes to pay off bailouts. All that money that you’re losing, it’s going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where its going.
Yikes!
Is this just another crackpot conspiracy theory? (Paging Mr. Stein, Mr. Ben Stein.) Nay — Taibbi has give us proof of Goldman’s nefari-iety. It goes more or less along these lines: 1. Goldman survived the Great Depression. 2. Goldman made some savvy bets in the past ten years. 3. Goldman pays really big bonuses. Read the rest of this post »
June 26, 2009 at 11:51 am
Tags: financial crisis, goldman sachs, market, money, securities law
Posted in: Corporate Finance, Corporate Law, Current Events, Securities, Securities Regulation
Print This Post
No Comments
On Spec: Corporate Waste and Contract Law
posted by Lawrence Cunningham
Extravagant corporate expenditures are among salacious details revealed during the economic crisis, from executive compensation, celebratory parties, office renovations and naming sports stadiums. A few courts, even in Delaware, indicate willingness to police extravagance under the hoary corporate law doctrine of waste, and some observers call for reinvigorating that doctrine.
Reinvigoration would be necessary because use of the doctrine of waste to upset corporate transactions is nearly as rare as hen’s teeth. Students of contract law, when beginning to study corporate law, find this rarity strange. They are told corporate law is anchored in fiduciary principles that contrast with contract law’s operating assumption of arms’-length transactions warranting extraordinary judicial deference.
True, standard talk in corporate law jurisprudence concerning both fiduciary duty and waste expresses similar interest in judicial deference, though emphasizing greater willingness to review corporate transactions to evaluate whether officials act in good faith, with due care, and without promoting self-interest over corporate interest. It may be odd, then, that judicial willingness to police corporate transactions under the doctrine of waste is weaker than within traditional law of contracts, such as its doctrine of substantive unconscionability.
Put differently, the issue can be expressed as what kinship exists or should exist between corporate law’s doctrine of waste and contract law, especially substantive unconscionability. The following notes some familiar ways the two show remarkable kinship and the surprising ways they depart from one another. For those looking to corporate law’s doctrine of waste to promote greater corporate accountability, a modest way would simply take more meaningful lessons from the law of contracts.
June 26, 2009 at 8:47 am
Posted in: Contract Law & Beyond, Corporate Law
Print This Post
4 Comments
Hurt on Sotomayor’s Securities Law Record
posted by Danielle Citron
Over at the Conglomerate, Christine Hurt has interesting posts on Judge Sotomayor’s decisions in the securities law arena. Here is a snippet of her latest post:
The remaining 21 lawsuits seem to have results typical to those of most private securities lawsuits: the defendant wins, usually on a motion to dismiss, which is affirmed by the court of appeals. Specifically, in 16 cases the defendant was granted relief. In four cases, the defendant was granted some, but not all, of the relief requested or one defendant was granted relief, but not all. Of these four cases, no plaintiff won on a core 10b-5 securities law issue (was there reliance? materiality? loss causation?). For example, in one case, the second circuit held that although the federal securities claims were dismissed, a state law duty existed for a fiduciary duty claim. In another, several individual defendants were not granted a motion to dismiss on Section 11 claims. In another, even though the case was dismissed, the court held that the lead plaintiff had standing. The other case in which plaintiffs won partial relief was Dabit v. Merrill Lynch, which Sotomayor probably got right and the Supreme Court (reversing) probably got wrong. (My colleague Larry Ribstein’s post on this is here.) In the one case where the plaintiff won outright, the plaintiff won summary judgment in a bench trial against a foreign bank.
Although pundits are scouring her other opinions to find judicial activism, there’s none here in the 10b-5 arena. If we’re worried about the nominee showing empathy instead of following the law, there’s no evidence of runaway shareholder empathy!
June 14, 2009 at 6:39 am
Posted in: Corporate Law, Uncategorized
Print This Post
No Comments
Feds Preempting Delaware Corporate Law
posted by Lawrence Cunningham
Congress appears hungrier to eat into state corporation law than any time since 2002 1933. More than 2002’s Sarbanes-Oxley Act, the so-called Shareholder Bill of Rights Act of 2009 would invade deeper into areas traditionally known as corporation law, and the province of the states, than since federal securities regulation was created in the 1930s.
A few provisions, while bold and getting most attention, are disclosure and proxy voting matters not far afield from traditional federal securities regulation; but several, getting far less attention, are not only bold but preempt deep inside traditional state corporation law territory. Starting with the deepest and least discussed: Read the rest of this post »
May 20, 2009 at 5:28 pm
Posted in: Corporate Law
Print This Post
One Comment
Obama’s Schechter Poultry?
posted by Lawrence Cunningham
Over at the Wall Street Journal Deal Journal Blog, Michael Corkery speculates how federal law limiting private corporation executive compensation may be unconstitutional.
The issue is whether the amount and form of consideration a corporation, through its board, pays its employees, including executives, is a subject sufficiently affecting interstate commerce to authorize Congress and the President to regulate under the commerce clause.
The activities of large corporations and trading in their securities involve interstate commerce. So there’s little doubt that federal securities laws or various other laws regulating related activities pass muster.
But employee pay, particularly highest-paid executives? That is a matter concerning the internal affairs of the corporation. It implicates that conflict of law principle, which enjoys a respectable pedigree, including in constitutional law.
Obama’s proposals to cap pay for various companies would apply whether or not the federal government has invested funds in them, using debt or equity. The proposals may not be unconstitutional.
But they differ from securities law disclosure requirements and even Sarbanes-Oxley Act provisions about board independence and board supervision of auditors. Those creep into internal affairs yet the underlying accounting issues addressed involve capital allocation issues whose affect on interstate commerce is more clear cut than what to pay people.
May 13, 2009 at 6:43 pm
Posted in: Constitutional Law, Corporate Law, Uncategorized
Print This Post
6 Comments
Choices in Financial Regulation
posted by Lawrence Cunningham
Only a few stark choices face those fashioning financial regulation reform, though thousands of discrete issues may arise. As reported, David Zaring and I present a framework to assess the stark choices in a piece released this morning on SSRN entitled The Three or Four Approaches to Financial Regulation.
Scores of proposals are circulating that would overhaul financial regulation. Most propose radical change. This means concentrating power in the federal government, consolidated in the executive branch, under Presidential control, or agencies insulated from political accountability.
We caution about a perceived exuberance in the current atmosphere. We think it is more desirable to identify the particular weaknesses manifested by the current crisis and correct them, not revolutionize the system.
That means changing the prevailing approach to credit ratings for investment securities, a federal overseer of state mortgage origination and a transparent trading market for complex financial instruments.
It does not mean federal preemption of state insurance law or state banking laws, or consolidating oversight of all massive institutions in the Federal Reserve or Treasury. It may not even mean merging the SEC and CFTC.
It certainly would not officially ordain what the Fed and Treasury have been doing for more than a year: running an opaque and unaccountable roving commission in search of safety and soundness no matter the industry, whether banking, automotive, insurance, money markets, or commercial paper.
We are not optimistic that our view will prevail in the current atmosphere. Nevertheless, we think the view is worth expressing and should be considered as lawmakers and policy wonks react to the political pressures and opportunities that financial crises invariably bring. That is why Zaring and I subtitle the piece: A Cautionary Analaysis Against Exuberance in Crisis Response.
May 8, 2009 at 6:03 am
Posted in: Corporate Law, Current Events
Print This Post
2 Comments
Partnoy on the Market Crisis, Credit Rating Agencies, and The Match King
posted by Kaimipono D. Wenger
I attended a very interesting lecture yesterday, by Frank Partnoy (USD Law), here at Thomas Jefferson Law School. There were a lot of highlights, among them these:
Frank talked a fair amount about his new book, The Match King. It discusses Ivar Krueger, the Wall Street swindler of 80 years ago whose misdeeds led directly to the 33 Act. Krueger promised steady returns; used a variety of devices to hide his Ponzi scheme; in essence, he was the Bernie Madoff of the 1920s. Frank pointed out these similarities, and showed how market crises today have many factors in common with Depression-era problems. The whole discussion was extremely interesting and topical. (The WSJ agrees, saying in its review that “the tale of the Match King holds lessons for our own day and for future generations.” Seriously, go buy The Match King today if you haven’t already — and pick up Fiasco and Infectious Greed, too, if you don’t have them.)
From there, Frank branched out into a topic you’re familiar with if you’ve read any of his work — the big problems with credit rating agencies Standard & Poor’s and Moody’s. There are a variety of reputational intermediaries used today in different markets (e.g., the USDA). Ratings agencies like Standard & Poor’s and Moody’s are seen as private entities, but Frank argued that they should in fact be seen as hybrids between government and private actors. This is because they are inextricably tied to a number of legal rules; thus, they effectively become sellers of regulatory licenses.
On a broader level, Frank argued that problems with the rating agencies underlie much of the current crisis.
May 1, 2009 at 6:59 pm
Posted in: Corporate Law, Current Events, Economic Analysis of Law
Print This Post
7 Comments
Creativity, Law and Entrepreneurship Workshop at Wisconsin
posted by Deven Desai
On Friday I was in lovely Madison, Wisconsin for the Creativity, Law and Entrepreneurship Workshop which Shubha Ghosh put together and was sponsored by UW Law School, the Institute for Legal Studies, the Initiative for Studies in Technology Entrepreneurship (INSITE), and the Global Legal Studies Center. I’m afraid I don’t have the ability to capture everything that happened, but I will try and call out what each panel did (although the link above sets out the program and speakers).
Those details are below the break. Before that, I want to say that Wisconsin was a great host. The group was excellent. Each paper linked in some way to the other papers in its session. In addition, the pace was perfect. Three papers per session allowed one to present the core ideas of the paper and have plenty of time to get into the discussions. Furthermore, it was a a great pleasure to have the business school folks attend. I, for one, was able to get valuable feedback and learn about some literature that looks like it will help my work in general. In short, thanks to Wisconsin and all those who put together the event for a job well done. Now on to the panels.
April 27, 2009 at 1:09 pm
Posted in: Corporate Law, Empirical Analysis of Law, Intellectual Property
Print This Post
One Comment
