Business Law Prof Blog

"An Ironic Uprising"

That's what the Wall Street Journal called the recent "Rally to Restore Sanity and/or Fear."  My colleague, Prof. Huhn, reports back from the event here.

SJP

"New Governance" or New Levels of Corruption?

In 2001, David Korten released the second edition of his provocative book, "When Corporations Rule the World."  If he decides to update this edition, he may want to include the following NPR items:

1.  Shaping State Laws With Little Scrutiny:

When you walk into the offices of the American Legislative Exchange Council, it's hard to imagine it is the birthplace of a thousand pieces of legislation introduced in statehouses across the county. . . . The real authors are the group's members — a mix of state legislators and some of the biggest corporations in the country.

2.  Prison Economics Help Drive Ariz. Immigration Law:

Last year, two men showed up in Benson, Ariz. … offering a deal … a prison for women and children who were illegal immigrants. . . . [H]ow would they possibly keep a prison full for years — decades even — with illegal immigrants?  [The] prison companies … had a plan — a new business model to lock up illegal immigrants.  And the plan became Arizona's immigration law.

Perhaps relatedly, Korten might also want to include a recent study by Transparency International concluding that the U.S. has dropped out of the top 20 countries in terms of battling corruption.

I have some additional thoughts on these issues in my latest published article: Finding State Action When Corporations Govern.

SJP

 

The Value of Regulators or "I Want My $3"

The FCC announced yesterday (pdf here) a settlement agreement related to "mystery fees" Verizon Wireless charged some pay-as-you-go customers, which included a record $25 million payment to the U.S. Treasury, as well as an immediate refund to 15 million customers to the tune of $52.8 million. Verizon Wireless was apparently improperly charging a $1.99 per MB data usage charge to some customers. The customers were getting charged for a variety of reasons.  Some customers did not know they had programs on their phones that were connecting to the data network. Others were charged even though they failed to connect to the data network other than to register a charge.  Still others accidentally hit a button on their phone that accessed the network. (The FCC consent decree can be found here in pdf.)

This case underscores one of the real potential values of regulators. Ultra-large companies serve so many customers that small charges can lead to large dollars.  With 15 million customers, an extra dollar charged per customer raises a ton of cash. A small charge can be quite lucrative, even though the impact per customer is relatively small. On the one hand, of course, $15 million is not a lot of money to Verizon.  Last year, the company's total wireless revenues were $16.2 billion and service revenues were $14.2 billion.  On the other hand, an extra $15 million here and there still adds up quickly.

Most individuals are not likely to pursue a few dollars in overcharges zealously because they are dealing with an entity with great resources and the potential gain is modest.  That doesn't mean a large company's practices should go unchecked.  Not every customer can be expected to be the newspaper boy from the "classic" film, Better Off Dead.  And perhaps that's part of the real value of regulators.  They can be our Johnny the Paper Boy when it comes to big companies acting improperly.  The FCC already chased Verizon Wireless down the ski hill screaming, "I want my $3!" That means 15 million Verizon Wireless customers didn't have to.  

(With apologies to those without solid roots in 1980s film and/or the John Cusack Collection.)

--Joshua Fershee 

BLPB Selected As One of LexisNexis's Top 25 Business Law Blogs of 2010

The complete list is here (while you're there, feel free to vote for us for Blog of the Year).  Thanks to everyone who has helped make this blog a success.  Hopefully, this means we've managed to provide some form of value and service to our readers in our time here.  Onwards and upwards!

SJP

CFTC Rules on Market Manipulation Incorporate Sympathy Provision

The CFTC yesterday announced its proposed rules on market manipulation, as required by Dodd-Frank (the available factsheet can be found in pdf here). Proposed section 6(c)(1) tracks SEC Rule 10b-5 and is similar to the rule promulgated by the Federal Energy Regulatory Commission (FERC) under authority granted in 2005 (18 C.F.R. § 1c). The FTC also created similar rules in 2007.

The CFTC language adds a new wrinkle, stating that is unlawful to

deliver or cause to be delivered, or attempt to deliver or cause to be delivered, for transmission through the mails or interstate commerce, by any means of communication whatsoever, a false or misleading or inaccurate report concerning crop or market information or conditions that affect or tend to affect the price of any commodity in interstate commerce, knowing, or acting in reckless disregard of the fact that such report is false, misleading or inaccurate. Notwithstanding the foregoing, no violation of this subsection shall exist where the person mistakenly transmit, in good faith, false or misleading information to a price reporting service.

As someone who formerly practiced before FERC, this new provision reminds me of a mistake made by a natural gas company back in 2004 (see here). The company had generated a correct report, but the clerk charged with sending the information about natural gas withdrawals to the Energy Information Administration accidentally attached the wrong data file.  This was a pretty big mistake, and it was one that cost consumers because it created a spike in futures prices.  

As most of us know, it's pretty easy to attach the wrong file if you aren't paying close attention. As lawyers, we must to be vigilant about such things.  However, it's also reasonable to have regulators include some "there but for the grace of God" provisions from time to time. 

--Joshua Fershee 

Oh, That Tricky 10b-5

As reported in The New York Law Journal last week, an S.D.N.Y. judge recently dismissed a class action complaint against Oppenheimer Co. centering on sales of auction rate securities, a vehicle of infamy in recent years.  The case serves as a barometer of the Second Circuit's tolerance for Rule 10b-5 claims inviting a number of controversial defenses to securities fraud.  See Vining v. Oppenheimer Holdings Inc., 08 Civ. 4435 (Sept. 27, 2010).

As the judge ruled:

Plaintiffs' basic theory is that high-level Oppenheimer officials issued management directives and uniform sales materials to Oppenheimer financial advisors regarding ARS, and that these directives were issued recklessly or with the intention to defraud because the prospect of ARS illiquidity was "either known to [Oppenheimer] or so obvious that [Oppenheimer] must have been aware of it."

On the topic of imputing scienter of unnamed individuals to the corporate defendant, the Court readily concluded that, while such is theoretically permissible in the Circuit, Plaintiffs had failed to offer sufficient grounds in the Complaint.  Specifically, allegations of inadequate training did not create an inference that the trainer possessed a motive to defraud.

As for the Tellabs "competing inference" analysis, the Court concluded that the allegations of fraud failed when juxtaposed with "the more cogent theory that Oppenheimer was caught off-guard by the exceptional turmoil in the financial markets...."

And concerning Plaintiffs' attempts to satisfy the strong inference test via allegations of the entity's insider sales/desire to keep the ARS market afloat, the Court cited a 2001 Second Circuit case (Kalnit v. Eichler) for the continuing truism that allegations of a generalized profit motive will not satisfy the demands of scienter. 

Overall, by dismissing the Complaint, the S.D.N.Y. reiterated that, even in these angry times, lawsuits involving notorious vehicles may be dealt setbacks that have plagued 10b-5 suits for decades.

---JSC, 10/26/10       

From Investopedia....

The Emergency Economic Stabilization Act of 2008 -One of the bailout measures taken by Congress in 2008 to help repair the damage from the subprime mortgage crisis. The act gives the Treasury Secretary the authority to buy up to $700 billion of troubled assets and restore liquidity in financial markets. The Emergency Economic Stabilization Act (EESA) was originally created and proposed by Henry Paulson...The original form of the EESA was rejected by the House of Representatives in September of 2008 and was therefore revised. A revised version was passed the following month. Proponents of the plan felt that it was vital to minimize the damage done to the economy by the mortgage meltdown, while detractors felt that the cost of the plan was way too high.

The American Recovery and Reinvestment Act of 2009 - An act initiated and signed by U.S. President Barack Obama in February, 2009. The act was set into motion as a response to the weak economic state facing the country. The American Recovery and Reinvestment Act was created to stimulate the economy through individual and corporate tax cuts, leniency in unemployment benefits, increased domestic spending, and increased social welfare funding.

[Just two notes to self.  I've read so many times this year that the current administration is to blame for "the bailout" of banks and Wall Street that I sometimes need a reminder of what actually happened].

---JSC, 10/25/10 

LLCs Taking Over?

The North Dakota Secretary of State's office provides a list (pdf here) of business entity statistics -- seven biennial histories -- for the years 1995, 1997, 1999, 2001, 2003, 2005, and 2007.  I was curious how LLCs and for-profit corporation compared over the last two time periods, to see if the LLC explosion was a reality here in North Dakota.  I'd say it is. 

In 2005, there were 12,849 "Domestic (in-state) Chartered Corporations."  In 2007, there were 13,211, which is a net increase of 362 corporations or an increase of 2.7%.  As for in-state limited liability companies (LLCs), in 2005 there were 3362 LLCs; in 2007 there were 4833.  This is a net increase of 1471 North Dakota LLCs, and increase of 43%.  The growth pattern for LLCs is quite recent, and quite remarkable -- in 1995 there were only 366 LLCs (340 of which were new registrations).  

If the rates from the last-reported biennium hold, LLCs will pass corporations as the North Dakota entity of choice by 2013. Not bad for an entity that didn't exist in the state until April 12, 1993.  

--Joshua Fershee

I'll take the Giants.

In case you've been focusing on other things, the World Series starts Wednesday in San Francisco.  The S.F. Giants will be facing the Texas Rangers and you can get a quick overview of the matchup here.  I'm picking the Giants because: (1) the teams look relatively evenly matched and so home field--particularly home field with NL rules--may have a bigger impact than usual, and (2) I've got to root for any city that has a chance to put "World Series Champion" and "Home of the Grateful Dead" together in one place.

PS--The rest of the world called, and they're not at all holding a grudge about not being invited to our "World Championship" playoffs--they're used to that kind of behavior from us.

SJP

Is a repeal of Dodd-Frank looming?

In a recent radio address, President Obama warned that:

[T]op Republicans in Congress are now beating the drum to repeal all of these reforms and consumer protections. Recently, one of the Republican leaders in the Senate said that if Republicans take charge of Congress, repeal would be one of the first orders of business. And he joins the top Republican in the House who actually called for the law to be repealed even before it passed.

The Republican radio address of Senator John Thune did nothing to dispel this notion, asserting that Democrats "spent their time passing more and more burdensome regulations, like their so-called Financial Reform bill that failed to address the main cause of our economic mess."

I wonder how many readers of this blog are now tempted to vote for the Democrats just so all that time spent digging through the pages and pages that is Dodd-Frank won't have been in vain.

You can find the text of the two radio addresses here.

SJP

Office Depot "Talks Down" Analysts' Estimates, SEC "Talks Up" $1 Million Fine

The SEC announced enforcement actions yesterday against two Office Depot executives and the company. The SEC alleges that the executives made selective calls to certain analysts to indicate the company would not meet analysts' earnings estimates, although it was not directly stated that earnings would not meet expectations.  The company never issued a broad public disclosure of this information, as would be required under Regulation FD if the disclosures to the analysts were material nonpublic information. 

According to the SEC order against the company (pdf here), the talking points used for the calls were as follows:

• Haven’t spoken in a while, just want to touch base. 
• At beg. of Qtr we’ve talked about a number of head winds that we were facing this quarter including a softening economy, especially at small end. 
• I think the earnings release we have seen from the likes of [Company A], [Company B], and [Company C] have been interesting. 
  • On a sequential basis, [Company A] and [Company B] domestic comps were down substantially over prior quarters. 
  • [Company C] mentioned economic conditions as a reason for their slowed growth. 
• Some have pointed to better conditions in the second half of the year – however who knows? 
• Remind you that economic model contemplates stable economic conditions – that is midteens growth

Apparently, Office Depot did not make such calls to analysts on a regular basis, which made the calls especially suspect.  According to the order, "Word of these calls quickly spread among analysts, some of whom believed that Office Depot was 'talking down' analysts’ earnings estimates." 

I suspect the SEC is correct about the motivation for the calls, so perhaps this the right outcome. But I can't help but wonder if the market might not work more efficiently with a little gentle foreshadowing. This is hardly a bombshell call to analysts, so if these calls were material, they were not that material.  The SEC itself seems to agree that not all analysts thought this call was about talking down earnings. 

And, after all, the Federal Reserve often "hints" at future actions to help stabilize the market. Obviously, the Fed actions are at a macro level and Office Depot is at a micro level, but I think there is at least an argument such actions can work toward the same (arguably positive) end at either level.  

--Joshua Fershee

Why do so many physicists love poker?

I've blogged previously about Wall Street & poker, as well as lawyers & poker.  Now, Discover magazine has an interesting article out about physicists & poker.  And to think, according to many legislators and judges all these smart people are just throwing their money away because poker is predominantly a game of chance.

SJP

British Takeover Panel Says It's "Too Easy for 'Hostile' Offerors"

The New York Times DealBook reports the the British Takeover Panel is planning to amend its Takeover Code (pdf statement here) to make it harder for hostile offerors to takeover a company. The panel explained that offers can destabilize the company and that the bid outcome is “influenced unduly by the actions of so-called short-term investors.”  

The Takeover Code 

is designed principally to ensure that shareholders are treated fairly and are not denied an opportunity to decide on the merits of a takeover and that shareholders of the same class are afforded equivalent treatment by an offeror. The Code also provides an orderly framework within which takeovers are conducted. In addition, it is designed to promote, in conjunction with other regulatory regimes, the integrity of the financial markets. 

The Code is not concerned with the financial or commercial advantages or disadvantages of a takeover. These are matters for the company and its shareholders. Nor is the Code concerned with those issues, such as competition policy, which are the responsibility of government and other bodies.

One of the flaws the panel cites in the current system is that bidders bypass the board and go directly to the shareholders.  To address these (and other) concerns, the Times reports: 

The measures the panel says it plans to adopt include shortening the period between when an approach is announced and a firm offer is received, requiring more complete disclosure on the part of both companies, giving more voice to employees and introducing more transparency in reporting fees tied to deals. 

At least some of these proposals don't seem to align directly with the statement of the Code's purposes. At first glance, for example, I can't help but note that talking to employees sounds like a stakeholder protection, not a company or shareholder protection, although I concede there is often value in knowing what the employees think. 

Furthermore, I am not sure what to think of the entire proposal. On the one hand, I tend to think that companies are often being managed with the short-term stock price in mind -- to the point that sometimes it appears management is running the company to keep the day-traders happy.  (To be clear, I think that's bad.)

On the other hand, more offers can make a company more accountable to the shareholders. If shareholders are willing to sell at a given price, then they should have the option if there is a willing buyer. If most of the shareholders think that current management is better for the long term they won't sell.  Sure, short-term sellers may be looking to cash in quickly, but that's true anyway.  We can't make it so that all shareholder have the same interests no matter what regulations are put in place.

Ultimately, the Takeover Panel thinks that power has shifted to provide the offering group a tactical advantage over the target company.  Perhaps they are right, but I'm still a little skeptical. At first glance, anyway, this seems like one of those places where shareholders already have the power they need, they just aren't exercising it to the liking of the panel.  I'm not sure that's the right motivation for changes in the rules.

--Joshua Fershee

 

 

Time to Act?

The past two years have seen a remarkable increase in both the power and influence of the Federal Reserve.  And yet, the agency's authority may need to grow more.

Over the weekend, Economist Martin Feldstein stated that there are currently 4 1/2 million homes in foreclosure or at least 90  days in arrears.  Meanwhile, the Federal Open Market Committee (which largely establishes the nation's monetary policy) appears undecided as to the extent of federal intervention required; and to one extent or another, the press seems transfixed by the spectacular ineffectiveness of the stimulus to spur spending.  See "The X Factor of Economic: People" (NYT 10/16/10).

Against the backdrop of this soul-searching and philosophical debate, Professor Tim Canova of Chapman Law School has contributed a thoughtful analysis of the Fed's actions in the past few years and its active role during a prior period of crisis.  See "The Federal Reserve We Need," available at  http://www.prospect.org/cs/current_issue .

---JSC, 10/19/10       

Harrah's Bets Lack of Control Won't Impact IPO

The casino company Harrah's Entertainment is filing to sell shares in an initial public offering. The company went private in 2006 in a $27 billion deal, but is now looking to raise funds for "growth projects" and other "corporate purposes."  

Harrah's states that they don't expect to pay dividends, and that the company is controlled by entities with interests that may differ from those of their stockholders. In addition, one of the risk factors in their S-1 (here) explains the impact of being a "controlled company":

We will be a “controlled company” within the meaning of the New York Stock Exchange and Nasdaq rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.

Upon the closing of this offering and the IPO, Hamlet Holdings will continue to control a majority of our voting common stock. As a result, we will be a “controlled company” within the meaning of the New York Stock Exchange and Nasdaq corporate governance standards. Under the New York Stock Exchange and Nasdaq rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain New York Stock Exchange and Nasdaq corporate governance requirements, including:   

• the requirement that a majority of the Board of Directors consists of independent directors;
• the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors;
• the requirement that we have a compensation committee that is composed entirely of independent directors; and
• the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

Following this offering and the IPO, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors nor will our nominating/corporate governance and compensation committees consist entirely of independent directors and we will not be required to have an annual performance evaluation of the nominating/corporate governance and compensation committees. See “Management.” Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the New York Stock Exchange or Nasdaq corporate governance requirements.

When you see it written like this, it sure seems like an investor is giving up a lot of protections available with other investment opportunities.  On the other hand, the value of these protections should be built in the the share price.  Presumably, Harrah's doesn't view this is a major hurdle to the success of the IPO (i.e., it won't lower the value of the stock very much). Odds are that's a safe bet, which raises the question: do these protections actually mean anything to investors at the time of purchase? 

--Joshua Fershee

"Capitalist" or "Socialist"? It depends. And I reserve the right to change my mind.

Jonathan Haidt penned an essay for yesterday's WSJ entitled "What the Tea Partiers Really Want," wherein he argues that: "The passion behind the populist insurgency is less about liberty than a particularly American idea of karma."  I found it to be an interesting read, but what jumped out at me was the oft-repeated refrain: "Everyone should be free to do as they choose, so long as they don't infringe upon the equal freedom of others."  I've always thought this is somewhat of an empty proposition because two people can agree perfectly on it in principle while disagreeing widely as to what constitutes "infring[ing] upon the equal freedom of others."

Take for example the protection of personal property, a foundational element of capitalist society.  One could view the distribution of property to be primarily a function of circumstance rather than some type of scorecard for who "deserves" to call what property "mine."  For example, I could look at my life and conclude that I have managed to accumulate enough property to call myself a success according to some set of generally accepted metrics.  However, when I try to identify the personal attributes that justify my ownership, I may ultimately conclude that I have primarily "nature and nurture" to thank.  That is, I never chose, in any meaningful sense, the personal attributes most likely associated with my success such as intelligence, drive, wisdom, passion, etc.  These were all either given to me at birth or developed by others/circumstances (E.g., my mom surrounding me with books and music as I grew up--thanks, Mom!).  If that is correct, and we also assume a limited amount of property to be distributed, then my asserting a right to exclude others from partaking in some part of "my" property is arguably infringing upon their equal freedom to enjoy what would otherwise be a more equal distribution of property.  In sum, I have never found defenses of expansive interpretations of personal property rights based on notions of "I earned it" to be particularly convincing.  (I realize I'm ultimately taking on the entire concept of free will here, but at least I have cause-and-effect on my side.  Beyond that, I'll just have to leave that discussion for some later date . . . or lifetime, given how busy I am.)

Having said that, what I do find compelling are utilitarian and similar arguments.  That is to say, one could well agree with my foregoing assessment of justice and fairness yet nevertheless conclude that a system protective of expansive private property rights is best (or least worst) because it maximizes, for example, overall well-being.  However, if you are going to ask me to give some quarter in terms of my beliefs about justice and fairness on that basis, you'll likely need to do more than plop the "Bible of Unbridled Faith in Free Markets" on my desk, or offer up some cost-benefit analysis rooted in assumptions of perfect human actor rationality and commonly held assessments of value.  Empirical studies obviously advance the ball further, but even then one need only spend a little time with empiricists to realize that the seemingly few times they progress beyond arguing about study design they seem to rarely be able to get beyond arguing about implications.  (I'm obviously exaggerating here, but I hope you take my point.)

So, have I painted myself in a corner here?  Are my assertions of open-mindedness just hot air?  I certainly hope not.  And I believe those who know me would agree that I'm more open to what are generally deemed to be conservative or classically liberal positions than I was even a year ago.  (I guess one can only read ProfessorBainbridge.com and Truth on the Market on a semi-regular basis so long before becoming at least somewhat brainwashed ... errr, influenced by the assertions commonly put forward on those sites.)  I can certainly confess that I'm just about one more billion dollar IOU away from switching my political identification from Democrat to Independent, and I say that as someone who strongly believes the bailout--or at least some meaningful portion of it--was necessary to avoid a repeat of 1929.

Anyway, if you've made it this far you probably deserve some sort of prize, and you're also likely thinking something along the lines of: "Duh!"; "Huh?"; or, "So what?"  To this my likely best reply is that I just needed to vent, and I remain--as is often the case--at least somewhat vulnerable to the criticisms launched by Will (Matt Damon) against the Harvard grad student Clark in the movie "Good Will Hunting."  Proceed past the jump if you're not sure what I'm talking about.

Clark: There's no problem. I was just hoping you could give me some insight into the evolution of the market economy in the early colonies. My contention is that prior to the Revolutionary War the economic modalities, especially of the southern colonies could most aptly be characterized as agrarian pre-capitalist and...

Will: [interrupting] Of course that's your contention. You're a first year grad student. You just got finished reading some Marxian historian, Pete Garrison prob’ly, you’re gonna be convinced of that until next month when you get to James Lemon, then you’re gonna be talkin’ about how the economies of Virginia and Pennsylvania were entrepreneurial and capitalist back in 1740. That's gonna last until next year, when you’re gonna be in here regurgitating Gordon Wood, talkin’ about you know, the Pre-revolutionary utopia and the capital-forming effects of military mobilization.

Clark: [taken aback] Well, as a matter of fact, I won't, because Wood drastically underestimates the impact of--

Will: ..."Wood drastically underestimates the impact of social distinctions predicated upon wealth, especially inherited wealth..." You got that from "Work in Essex County," Page 98, right? Yeah I read that too. Were you gonna plagiarize the whole thing for us- you have any thoughts of- of your own on this matter? Or do- is that your thing, you come into a bar, you read some obscure passage and then you pretend- you pawn it off as your own- your own idea just to impress some girls? Embarrass my friend?

[Clark is stunned]

Will: See the sad thing about a guy like you, is in about 50 years you’re gonna start doin' some thinkin' on your own and you’re gonna come up with the fact that there are two certainties in life. One, don't do that. And two, you dropped a hundred and fifty grand on a [freakin'] education you coulda' got for a dollar fifty in late charges at the Public Library.

SJP

More Kindle Research

For the two other people on the planet still not in the know: WestlawNext allows you to transfer docs directly to Kindle (thanks to "akronstudent" for the 411 posted here).  The process is relatively fast (you just have to set your Kindle account to accept emails from westlawnext@westlawnext.com), and the benefits over simply downloading and dragging-and-dropping a PDF file to your Kindle are that: (1) you can adjust text size without exceeding the Kindle's screen size limits; and, (2) the Kindle formatted doc is able to take advantage of Kindle's text-to-speech function.  This latter point should be particularly appealing to those of you who commute to work, like I do.  In fact, I'm thinking about using this function to keep up with all the blog posts I routinely miss.  I'd have to cut and paste the days posts into a Word doc and then send it to Kindle for formatting, but if I do this in the evening I should have a blog "podcast" ready for my morning commute.  Am I peaking the geekmeter yet?

SJP

Increasing Gender Diversity Requires . . . A Commitment

A recent McKinsey Global Survey found that 72% of the respondents believe that gender diversity in the workforce has a direct link to a company's financial success. (The survey is available here, free registration required.) The survey found that companies with gender diversity as a top-three agenda item were significantly more likely (32% more likely to be specific) than other companies to have at least 15% of their C-level positions held by women. (Incidentally, C-level means high-level executive, such as Chief Executive Officer or Chief Information Officer).

It's hardly shocking that companies with a focus on gender diversity would be more successful in having a more diverse workforce, especially at the higher level.  It is also not a shock that the most-cited barrier to gender diversity is "a lack of awareness of or concern for gender diversity as a critical matter.

Interestingly, the survey found that monitoring policies were not very hard to put in place: only 7% of all respondents said there was "difficulty in implementing a top-management monitoring policy."   Beyond that, if the company implemented a monitoring policy in the past five years, the policy was likely to have an impact (according to 65% of such respondents).

The report concludes:

The actions that senior executives indicate boost diversity the most may be a good place for other companies to start: visible monitoring by the CEO, skill building specifically aimed at women, and mentoring, perhaps even on a mandatory basis. 

Of course, making a commitment to gender diversity is still probably the best place to start. 

--Joshua Fershee

BP Spill Victims Beware: SEC Warns of Scams (Available in Creole)

I was happy to see that the SEC issued a warning (here) to those receiving payouts from BP for losses from the Gulf oil spill. The SEC warns that "[r]ecipients of highly-publicized payouts often become targets for investment fraud."  Links to additional investment resources are provided to assist those receiving lump sum payments.  Additional information is available about Affinity Fraud, Oil Spill Stock Scams, and Ponzi Schemes. 

The best part, in my view, is the offering on Affinity Fraud. The SEC offers "information on investment scams targeting particular groups," including an Investor Bulletin on Affinity Fraud (here), a publication they also make available in Creole (here).

--Joshua Fershee

Up Next: Suing Ayn Rand for the Financial Crisis

Nassim Nicholas Taleb, author of “The Black Swan,” wants to sue the Swedish Central Bank for legitimizing the theories of economists that he says brought down the global economy.  (HT: Josh Wright.)  Specifically, Taleb argues that the SCB's endorsement has led to people using a portfolio theory "that vastly underestimates the risks they’re taking and overexposes them to equities."  I suggest joining Ayn Rand as a defendant.

SJP