Securities Law Prof Blog

AALS Section on Securities Regulation Call for Papers

Call for Papers: AALS Section on Securities Regulation
New Challenges in Dynamic Markets
AALS Annual Meeting
January 6-10, 2009 in San Diego, California

The subprime crisis and the resulting fallout have placed new pressures on the financial markets, reflected perhaps most vividly in the collapse of Bear Stearns.  The sale of mortgage-backed securities has resulted in a flood of litigation, involving underwriters, issuers, and investors.  The resulting lawsuits will have to contend with the changing legal landscape created by recent Supreme Court decisions such as Dura Pharmaceuticals, Tellabs and Stoneridge.  At the same time, the global financial turmoil has led to a host of reform proposals, including changes to the regulation of private offerings, reform of the rating agencies, and a single financial regulator combining the SEC and CFTC.

We are seeking papers for the January 2009 meeting of the AALS Securities Regulation Section in San Diego discussing any aspect of these developments.  Our section meeting is scheduled for Friday January 9, 2009, from 10:30 am-12:15 pm.  A broad range of topics is possible, and we welcome submissions on any aspect of the recent market and regulatory developments.

Submissions will be reviewed by the Section on Securities Regulation Executive Committee.  Decisions will be communicated no later than September 15, 2008.

Please submit an abstract and a draft, if available to Professor Jill Fisch, Chair of the Section on Securities Regulation by July 30, 2008.  E-mail submissions are preferred and should be sent to jfisch@law.fordham.edu. You may also submit your proposal by mail to Jill Fisch, Fordham Law School, 140 West 62nd Street, New York, NY  10023.

Please feel free to forward this Call for Papers to anyone who might be interested.

AALS Section on Business Associations Call for Papers

                                                    AALS SECTION ON BUSINESS ASSOCIATIONS

Call for Papers

JANUARY 2009 ANNUAL MEETING

 

The AALS Section on Business Associations will meet during the AALS Annual Meeting in San Diego, from 9:00am-noon on Saturday, January 10, 2009.

The topic for this year's session is "What, If Anything, Can Finance Teach Law (and vice versa)."  During the first half of the session, there will be a roundtable discussion and debate by a group of distinguished commentators, including prominent law and business school faculty.  During the second half of the session, legal scholars will present papers related to the topic.

Papers will be selected based on submissions made in response to this Call for Papers.  Possible topics include corporate governance and the role of the board, executive compensation and decision making, financial innovation, legal issues related to behavioral economics and finance, shareholder and stakeholder rights, and the theory of the firm, as well as recent market dislocations and the contributions of finance to reform proposals.  The Executive Committee encourages submissions on a broad range of issues related to the topic, including empirical and theoretical perspectives.

If you are interested in presenting a paper, please submit a summary of no more than three double-spaced pages, preferably by e-mail, before Friday, August 15, 2008.  In addition to the summary, you also may submit a complete draft of your paper.  Direct your submission to: Professor Frank Partnoy
fpartnoy@sandiego.edu 
University of San Diego School of Law
5998 Alcala Park
San Diego, CA 92110

Papers will be selected after review by members of the Executive Committee of the Section on Business Associations, including:

Richard Booth (Villanova)   
Eric Chiappinelli (Creighton, Dean) 
Lisa Fairfax (Maryland, Chair-Elect)
Frank Gevurtz (McGeorge)   
Christine Hurt (Illinois)   
Therese Maynard (Loyola-Los Angeles)
Brett McDonnell (Minnesota)   
Frank Partnoy (San Diego, Chair)
Margaret Sachs (Georgia)
David Skeel (Penn)
Gordon Smith (BYU, Past Chair)
Guhan Subramanian (Harvard)
Cynthia Williams (Osgoode Hall)

Authors of accepted papers will be notified by Friday, September 19, 2008.  Please feel free to pass this Call for Papers along to any colleagues who may be interested.

Law & Society Annual Meeting Sessions from Corporate and Securities Law Women Scholars

For those attending the Law and Society Annual Meeting next week (May 29-June 1) in Montreal, I hope you will mark the following six programs on your calendar.  All are organized by the Corporate and Securities Law Women Scholars under the capable leadership of Faith Stevelman (NYLS).

Thursday 8:15 - 10:00 a.m.  Securities Markets, Risk and Corporate Fraud: Looking Beyond Private Civil Litigation. Principal presenters include: Jayne Barnard (William & Mary), Donna Nagy (Indiana-Bloomington), Rebecca Roiphe (NYLS).

Friday 12:30 -- 2:15 p.m.  Firms, Markets, and Social Welfare: The Role of Business Law.  Principal presenters include: Claire Moore Dickerson (Tulane), Renee Jones (Boston College), Christiana Ochoa (Indiana-Bloomington), Janis Sarra (British Columbia).

Saturday 8:15 -- 10:00 a.m. Law, Value, and Wealth: Markets and Securities Law.  Principal presenters include: Christine Hurt (Illinois), Lisa Fairfax (Maryland), Elizabeth Nowicki (Tulane).

Saturday 4:30 -- 6:15 p.m.  Corporate Governance and Employees: Caught in the Crossfire.  Principal presenters include: Kelli Alces (Florida State), Katrice Bridges (Penn State), Julie Goldscheid (CUNY).

Sunday 8:15 -- 10:00 a.m.  Changing Perspectives on the Corporate Board, its Role and Functions.  Principal presenters include: Lynne Dallas (San Diego), Kimberly Krawiec (UNC), Erica Beecher-Monas (Wayne State).

Sunday 10:15 -- noon.  Trends in Securities Litigation and Settlements.  Principal presenters include: Margaret V. Sachs (Georgia), Verity Winship (Fordham), Faith Stevelman (NYLS).

I hope to see you there!

Warren Buffett on Corporate America

Larry Cunningham (GW) has edited a second edition of Warren Buffett's legendary essays.  Among the "hot topics" touched upon in this edition are stock options, excessive CEO pay, derivatives, foreign currency trading, and management succession.  You can preorder the book in time for Berkshire Hathaway's annual meeting.

Virginia Law Review on SEC at 75

On Friday, September 26th, 2008, the Virginia Law Review will host a symposium marking the 75th anniversary of the Securities and Exchange Commission. The Virginia Law Review is pleased to announce that the following securities law scholars will present at the symposium:

John C. Coffee, Jr.
James D. Cox
Donald C. Langevoort
A.C. Pritchard
Hillary A. Sale
Joel Seligman
Robert S. Thompson
More details on commentators and special speakers will be announced on the Law Review's website as they become available.

DePaul and Commercial Law League Announce Ethics Symposium

The DePaul Business and Commercial Law Journal and the Commercial Law League of America announce the Sixth Annual Symposium, Lawyers, Law Firms, & the Legal Profession: An Ethical View of the Business of Law on May 1 from 10:30 a.m. to 5 p.m.  Panels include: Lawyers in a Fee Quandary: Must the Billable Hour Die?; Lawyers in Transition: Ghosts from the Old Firm Haunting the New Firm;Lawyers in the Hot Seat: The State of Ethics & Professionalism.  Tickets are $75.00 on or before April 1, 2008 and $90.00 after that date.  Judges and students are free.  For registration and sponsorship information, contact Don Carrillo, the Symposium Editor, at (312) 362-6178 or depaul.bclj@gmail.com, or Paula Lucas of the Commercial Law League of America at (800) 978-2552 or plucas@clla.org.
 

Chamber of Commerce 2d Annual Capital Markets Summit

The U.S. Chamber of Commerce Center for Capital Markets Competitiveness will host its 2nd Annual Capital Markets Summit on Wednesday, March 26, 2008, from 9:00am to 4:30pm.  The event is scheduled to be on CNBC, and can be viewed via webcast.

Featured Speakers include:

The Honorable Henry M. Paulson, Jr., Secretary, U.S. Department of Treasury

Thomas Renyi, Executive Chairman, The Bank of New York Mellon, and Chairman, The Financial Services Roundtable

Robert Greifeld, President and Chief Executive Officer, The NASDAQ OMX Group

James Turley, Chairman and Chief Executive Officer, Ernst & Young

Tom Donohue, President and Chief Executive Officer, U.S. Chamber of Commerce

Linda Thomsen, Director of the Division of Enforcement, U.S. Securities and Exchange Commission

The Center also announced its new report: Strengthening U.S. Capital Markets: A Challenge for All Americans, also available at its website.

"The Dysfunctional Board: Causes and Cures

The Corporate Law Center at the University of Cincinnati College of Law presented its 21st Annual Corporate Law Symposium on March 14 on "The Dysfunctional Board: Causes and Cures," before a packed audience consisting of students, practitioners, and academics.  The panelists were of uniformly high quality, and the audience's enthusiastic participation in the Q&A sessions made for lively discussions.  The webcast of the program will be shortly posted on the CLC site, and the papers will appear in a forthcoming issue of the University of Cincinnati Law Review.  Here is a synopsis of the Program:

Panel I: The Underlying Causes of Dysfunctionality

Franklin A. Gevurtz, McGeorge (The Function of Dysfunctional Boards) started us off with the hard question: what is the board's function?  After arguing that none of the models (managing, monitoring, mediating) works, he reviewed the origins of the modern corporate board in English trading companies and medieval councils.  From this he argued that the board's purpose is to be a representive body; thus, it is dysfunctional only when it is not an elected body.  If a board is divided because the shareholders are divided, it has fulfilled its function.
Jayne W. Barnard, William & Mary (Narcissism, Over-Optimism, Fear, Anger and Depression: The Interior Life of Corporate Leaders) examined common CEO pathologies and how they can lead to recurring behavior, such as overcommitment to previous decisions, overestimation of ability to execute takeovers, overpayment in tender offers, and preoccupation with perquisites and personal myth making.  She also proposed some solutions, including the board's awareness of these characteristics in succession planning and expanding the board's monitoring role to take into account these issues.
John S. Stith (Porter Wright & Morris) focused on the Ohio corporation statute, particularly its constituency statute, and noted that the law expects that the board will perform a variety of roles, including mediation.

Panel II: Competing Expectations for Board Performance

Lissa Lamkin Broome and Kimberly D. Krawiec, both from UNC (The Road to Board Diversity: A Case Study from North Carolina) described their empirical study on diversity on public boards, consisting of a series of confidential, semi-structured interviews with corporate directors.  For this Symposium, they limited their discussion to an analysis of the rationale for board diversity, in particular, the signaling function.  They noted that through board diversity corporations may seek to signal workplace equality, attention to women and minorities in the development in products and services, and, more generally, that they are law-abiding and forward-looking.  They could not conclude, however, that board diversity is a stable signal in all cases, since board diversity may not be too costly to fake a signal.
Lawrence A. Cunningham, GW (Rediscovering Board Expertise: Legal Implications of the Empirical Literature) began by noting that despite the fascination with board independence, there is little evidence that it has improved board performance.  Accounting expertise, however, has been shown to improve the quality of financial statements, although the SEC's definition of "accounting expertise" is too broad for this purpose.  Thus, audit committee members add real value, but may not get greater benefits and may have greater liabilities, than other directors.  He argued that the incentives for expertise need to change.
Tamr Frankel, BU (Corporate Boards of Directors: Advisors or Supervisors?) emphasized the importance of culture in the two components of board service: advisory and supervisory.  She noted that boards need to strike the appropriate balance between micromanagement and window-dressing.  Boards must create a culture where extremes are not allowed.  She emphasized the importance of the board's "muddling through" -- to try and if it fails, then try something else.
Gary P. Kreider (Keating, Muething & Klekamp) noted that for shareholders corporate financial performance is what matters.  He also predicted that shareholders' access to the corporate ballot for purposes of nominating directors is likely to come soon.

Panel III: The Board as Compliance Officer

Peter J. Henning, Wayne State (Board Dysfunction: Dealing with the Threat of Corporate Criminal Liability) focused on board decisions made in response to reports of alleged misconduct in the context of four recent examples: Enron, Chiquita, United HealthCare and Staples.  He recommended the creation of a Zapata committee consisting of directors that are not tainted by the alleged corporate misconduct with the authority to effect real change.
Miriam H. Baer, NYU (Corporate Policing and Corporate Governance: What Can We Learn from Hewlett-Packard's Pretexting Scandal?) first examined Hewlett-Packard's pretexting scandal.  She then explained and examined the contradictions between corporate governance principles and corporate policing practices.  The government insists on effective corporate compliance programs, and given boards' lack of expertise and limited tools, we should not be surprised if we see more clashes between corporate governance and compliance.
Clifford A. Roe, Jr. (Dinsmore & Shohl) concluded by identifing common themes that had emerged in the course of the day's discussion: the uncertainty about the board's function, the competing expectations for board performance, and the difficulties these present to board members.

    

University of Cincinnati Symposium on Dysfunctional Boards

The University of Cincinnati College of Law and Law Review Present

The Dysfunctional Board: Causes and Cures

March 14, 2008, 8:00 a.m. - 3:30 p.m.

This Program will be Webcast at the Corporate Law Center website.  In addition, you will be able to participate in the question and answer sessions by emailing questions to the panels.  The email address will be announced during the conference and posted on the website.

PROGRAM

Panel 1: The Underlying Causes of Dysfunctionality

9:00 -- 10:30 a.m.

MODERATOR: John S. Stith, Esq., Porter Wright & Morris LLP, Cincinnati

PRESENTERS:

Franklin A. Gevurtz, Distinguished Professor and Scholar, University of the

Pacific, McGeorge School of Law

The Function of Dysfunctional Boards

An examination of the historical and political origins of the corporate

board of directors and what it tells us about Hewlett-Packard.

Jayne W. Barnard, James Goold Cutler Professor, College of William and

Mary, Marshall-Wythe School of Law

Narcissism, Over-Optimism, Fear, Anger and Depression: The Interior Life of

Corporate Leaders

An exploration of the cognitive biases and personal demons that may

drive leaders to foolish acts and several structural responses to the most

common CEO pathologies.

Panel 2: Competing Expectations for Board Performance

10:45 a.m. -- 12:30 p.m.

MODERATOR: Gary P. Kreider, Esq., Keating Muething & Klekamp, LLP, Cincinnati

PRESENTERS:

Lissa Lamkin Broome, Professor, University of North Carolina School of Law

Kimberly D. Krawiec, Professor, University of North Carolina School of Law

The Road to Board Diversity: A Case Study from North Carolina

Empirical research on the hurdles and successes of board diversity and its

impact on board decision-making.

Lawrence A. Cunningham, Professor, George Washington University Law School

Rediscovering Board Expertise: Legal Implications of the Empirical Literature

An examination of the relative importance of independence versus

expertise on the board of directors, especially as it relates to the audit

committee.

Tamar Frankel, Professor and Michaels Faculty Research Scholar, Boston

University School of Law

Corporate Boards of Directors: Advisors or Supervisors?

An analysis of the role of boards as advisors vs. supervisors, and the issues of

mediation among the two conflicting power positions as well as cause and cure.

Panel 3: The Board as Compliance Officer

1:45 - 3:15 p.m.

MODERATOR: Clifford A. Roe, Jr., Esq., Dinsmore & Shohl, LLP, Cincinnati

PRESENTERS:

Peter J. Henning, Professor, Wayne State University Law School

Board Dysfunction: Dealing with the Threat of Corporate Criminal Liability

An analysis of how boards respond to corporate malfeasance and, in some

instances, enable companies and their CEOs to commit corporate malfeasance.

Miriam H. Baer, Acting Assistant Professor, New York University School of Law

Corporate Policing and Corporate Governance: What Can We Learn from

Hewlett-Packard’s Pretexting Scandal?

An examination of the tension between law enforcement norms and

corporate governance norms, the deception gap between private and

public law enforcement, and the implications of these tensions for public

companies and their Boards.

The Corporate Law Symposium is generously sponsored by the law firm of Dinsmore & Shohl LLP.

University of Cincinnati Corporate Law Symposium on Dysfunctional Boards

Corporate Law Center and University of Cincinnati Law Review
2008 Corporate Law Symposium

The Dysfunctional Board: Causes and Cures

March 14, 2008 9:00 a.m. -- 4 p.m.

Hewlett-Packard presents a cautionary tale of the damage caused by distrust and dissension within the boardroom.  In fall 2006, Hewlett-Packard became embroiled in a headline-grabbing scandal and disgrace when the media reported that the board had authorized the use of possibly illegal tactics to determine the source of boardroom leaks.  In the resulting publicity, the underlying problem – the breach of the directors’ obligation to maintain the confidentiality of corporate information – was often overlooked. More recently, Dow Chemical announced that it had fired two senior executives, one of whom a director, for allegedly engaging in unauthorized talks to sell the company.  In another well-publicized “civil war,” in 2005 Morgan Stanley replaced its CEO and substantially reshaped its board of directors.

What confluence of events can cause governance at highly-regarded corporations to go awry?   This symposium will explore the causes of dysfunctional boards and attempt to formulate some possible cures.

Confirmed Speakers:

Miriam H. Baer, Acting Assistant Professor, NYU School of Law

Jayne W. Barnard, James Goold Cutler Professor, College of William and Mary, Marshall-Wythe School of Law

Lissa Lamkin Broome, Professor, University of North Carolina School of Law

Lawrence A. Cunningham, Professor, George Washington University Law School 

Tamar Frankel, Professor and Michaels Faculty Research Scholar, Boston University School of Law 

Franklin A. Gevurtz, Distinguished Professor and Scholar, University of the Pacific, McGeorge School of Law

Peter J. Henning, Professor, Wayne State University Law School

Kimberly D. Krawiec, Professor, University of North Carolina School of Law

The Corporate Law Symposium is generously sponsored by the law firm of Dinsmore & Shohl LLP.

For further information, contact Toni McGuire at toni.mcguire@uc.edu

South Texas Seeks Faculty Visitors

South Texas College of Law seeks one or more visitors for either or both semesters of the 2008-09 academic year.  Priority will be given to applicants interested in teaching torts, evidence, and business courses (e.g., corporations, agency and partnership, securities regulation, corporate finance, and mergers and acquisitions).  Applicants should submit a current c.v. and indicate a preference for one or both semesters and a desired course package.

Tim Zinnecker
(Chair -- Faculty Appointments Committee)

Feb. 8 Symposium on Forex Regulation

FOREX Symposium, Regulations in Currency Exchange and Its Impact on International Business, sponsored by Hofstra University's Journal of International Business and Law (Download forex_symposium.doc), will be held on February 8, 2008. This symposium is centered on addressing current and key issues in the market through panel discussions consisting of prominent panelists including academics, business professionals, lawyers and regulators.  It will address current as well as upcoming issues, such as: the ramifications of Commodity Futures Trading Com'n v. Zelener, 373 F.3d 861 (7th Cir. 2004) on the FOREX market, the impact of recent OTC retail FOREX regulations, the World's economy and the declining collar, and the effect and legal implications of the declining dollar in pricing and hedging strategies.

Drexel Presents "No Seat at the Table"

Drexel University's College of Law Program in Business & Entrepreneurship Law is hosting a conference on November 29, 2007 entitled "No Seat at the Table" A Discussion of Women & Corporate Boards. 
Attendance at the conference is open to the public and, unless you are seeking CLE credits, free of charge.  The conference is three (3) hours of substantive CLE credits in PA for $25, payable the day of the conference.  All attendees must register in advance.  See the website for further information.

"Scheme Liability" Program this Friday

Case Western Reserve University School of Law is presenting, along with the Corporate Law Practice Group of the Federalist Society for Law and Public Policy Studies, a Supreme Court Preview Symposium focusing on “SCHEME LIABILITY, SECTION 10(b), and STONERIDGE INVESTMENT PARTNERS v. SCIENTIFIC ATLANTA” on Friday, October 5, 2007 from 8:45 a.m. - 1:30 p.m. -- just days before the oral argument.  For those outside the Cleveland area, you can view it live via Webcast.  The program includes a distinguished group of academics and practitioners (and me too).  For more details, see the CWRU website.

GAO Report on SEC Enforcement Division Sees Need for Further Improvement

The GAO was asked to evaluate the SEC Enforcement Division's (1) investigation planning and information systems and (2) oversight of Fair Funds program.  Among its findings:

In March 2007 the SEC established a centralized process for reviewing and approving new investigations.  It has not yet established written procedures and assessment criteria for reviewing and approving new investigations.

By late 2007 Enforcement plans to update its current information system for managing investigations.  It has not yet taken sufficient steps to help ensure that data are entered in a timely and consistent basis.

In May 2007 Enforcement announced plans to better ensure the prompt closure of investigations.  Enforcement's plans will not fully resolve the potentially large backlog.

See GAO Report, Additional Actions Needed to Ensure Planned Improvements Address Limitations in Enforcement Division Operations.

SEC Announces Forum on Small Business Capital Formation

The SEC will hold its annual Forum on Small Business Capital Formation on Monday, Sept. 24, 2007, at the Commission's Washington, D.C., headquarters. This year's small business forum will focus on recent SEC rule proposals addressing securities registration and disclosure requirements for smaller companies.  The SEC is required to conduct the annual forum under a 1980 federal statute. The forum offers representatives of smaller companies an opportunity to meet and communicate with senior government officials.  SEC Small Business Forum to Focus on Recent Rule Proposals for Smaller Companies (see agenda for further information).

Corporate Law Center Database on Commercial Courts/Dockets

In 2007 Chief Justice Thomas J. Moyer of the Ohio Supreme Court announced that he had appointed a Task Force on Commercial Dockets to develop a pilot project to assess the best method of establishing commercial civil litigation dockets in Ohio’s common pleas courts.  The UC Corporate Law Center volunteered its assistance to Task Force and, to that end, has compiled information on other states’ efforts to create specialized business or commercial courts.  The information is posted on the CLC website in two forms: (1) a spreadsheet and (2) summaries detailing information on each state’s use of specialized business/commercial courts.

The Corporate Law Center hopes that this information will be a useful resource for everyone who is interested in the development of business/commercial courts throughout the nation, including policy makers, academics, attorneys and users of the judicial system.  We plan to update it regularly and welcome the submission of additional information.  Please send questions, comments, corrections and other information directly to me at barbara.black@uc.edu.

Upcoming SEC Historical Society Events

The SEC Historical Society has posted on its website a number of interesting programs, including a Fireside Chat on Accounting Aspects of the FCPA on Sept. 18 at 3 p.m. moderated by Professor Theresa Gabaldon at GW Law School.

Drexel Colloquium on Brennan's "Impossible Frontiers"

Drexel University's Program in Business & Entrepreneurship Law is presenting a faculty colloquium with Professor Thomas Brennan entitled "Impossible Frontiers" on Friday Sept. 28 at 10:30 a.m. (this is a change from a previously posted date). Here is the abstract of Professor Brennan's paper:

A key concept of the Capital Asset Pricing Model is the Mean-Variance Efficient Frontier, the collection of portfolios of n assets having mean-variance characteristics that cannot be improved upon. We study Mean-Variance Efficient Frontiers for which every portfolio on the frontier has at least one negative weight, i.e., for every portfolio, at least one asset is sold short. We call such a frontier an "impossible frontier" because the CAPM requires that the market portfolio—the portfolio of all n assets where the weight of each asset is proportional to that asset’s market capitalization—lie somewhere on the efficient frontier. Whether a frontier is impossible depends upon the particular values of the set of expected returns and covariances of the assets. In the two-asset case, we find that impossible frontiers occur only under certain unusual circumstances. However, for three assets or more, we find impossible frontiers in more common situations. Moreover, as the number of assets grows, we show that the probability that a generically chosen frontier is impossible tends to one. In fact, we find that for large n, nearly a quarter of all assets on a frontier are expected to have negative weights for every portfolio on the frontier. We also show that the expected minimum amount of short selling across points on frontiers grows linearly with n. Finally, we find that an impossible frontier remains impossible even if constraints are placed on the amount of short selling allowed in each portfolio.

More information is available at Drexel's website.

SEC Market Reg Director to Testify on Credit Markets

Erik Sirri, Director  of  the  Division  of  Market  Regulation at the SEC, will  testify  before  the  House Financial Services Committee on Wednesday, Sept. 5, 2007. Mr.  Sirri's testimony, which concerns recent events in  the  credit  and  mortgage markets, will be delivered at a hearing of the Committee which will be held in Room 2128 of the Rayburn House Office Building at 10:30 a.m.

Senate Hearing on Advising Seniors Sept. 5

Both SEC Chair Christopher Cox and NASAA President/ Alabama Securities Commission Director Joseph P. Borg will present testimony on ongoing efforts to protect senior investors from fraud, this Wednesday, September 5, before the U.S. Senate Special Committee on Aging, chaired by Sen. Herb Kohl (D-WI),at a hearing entitled “Advising Seniors About Their Money: Who Is Qualified - and Who Is Not?” The hearing is scheduled for 3 p.m., September 5 in Room 628, Dirksen Senate Office Building.

10(b) Scheme Liability Symposium

Case Western Reserve University School of Law is presenting a symposium on Section 10(b) Scheme Liability on October 9, from 8:45 a.m. -- 1 p.m. for those in the Cleveland vicinity.

Organizations Launch Website to Oppose SEC's Proxy Access Rule Proposals

The Social Investment Forum and Interfaith Center on Corporate Responsibility have jointly sponsored a website, Save Shareholder Rights!, to mount opposition to the SEC's competing versions of amendments to Rule 14a-8(i)(8) that address shareholders' access to management proxy materials for nominating directors.  Among the organizations' concerns: (1) the proposals could curb advisory shareholders resolutions; (2) the 5% threshold for director nominations is too high.  They are soliciting both individual and institutional investors to email their representatives in Congress.

"The Mystery of Delaware Law's Success" Conference at Illinois

On Friday, October 19, the University of Illinois College of Law Program in Business Law and Policy will be hosting a lecture “The Mystery of Delaware Law’s Success” presented by Chancellor William B. Chandler III of the Delaware Court of Chancery with responses from Emory University Professor William Carney, University of Illinois Professor Larry Ribstein, and Vanderbilt University Professor Robert Thompson. The Law School is located in Urbana-Champaign.

SEC Commissioner Campos Announces Resignation

SEC Commissioner Roel C. Campos announced that he intends to leave the Commission in a month's time and plans to return to the private sector. Currently serving his second term, Mr. Campos was first appointed by President George W. Bush and confirmed by the U.S. Senate as a Commissioner in August 2002.  Mr. Campos established a reputation as a strong advocate for investors and was the first Hispanic Commissioner.

SAC Award Surveys Available

The Securities Arbitration Commentator is well known among securities arbitration practitioners for its statistical information on arbitration awards.  It has now posted 50 Award Surveys on its website that are available, for free, to the general public.

SIFMA Urges Continuance of Rule 12b-1 Fees

SIFMA filed a comment letter with the SEC, following up on the agency's June 19 Roundtable Discussion on Rule 12b-1 fees, where Chair Cox questioned whether there was a continuing justification for allowing use of fund assets to promote sales activities.  SIFMA stated that it would be a major mistake to discontinue the fees because they play an important role in opening up the financial markets to investors.

SIFMA Study in Support of Rule 12b-1 Fees

The Securities Industry and Financial Markets Association (SIFMA) has prepared a white paper on the history and purpose of Rule 12b-1 under the Investment Company Act of 1940.  Rule 12b-1 permits mutual funds to use fund assets to finance the distribution of their shares.  The white paper has been provided to the Securities Exchange Commission (SEC) as background material for panelists participating in a roundtable event on Rule 12b-1 being held today in Washington D.C. by the SEC.

“While we appreciate the SEC’s efforts to undertake a review of Rule 12b-1, we ultimately believe that the rule is important to both firms and investors,” points out Ira Hammerman, senior managing director and general counsel for SIFMA.  “For broker-dealers and other intermediaries, 12b-1 plans support important marketing, advertising, and administrative and shareholder servicing functions.”

The report is available at the SIFMA website.

Corporate Women Scholar's Conference

The Corporate Women Scholar's Conference was held Saturday June 16 at the Seattle University School of Law.  Presenters included Jill Fisch (Fordham), Loss Causation in Securities Fraud; Donna Nagy(Indiana), The Demise of the Fiduciary Principle in Insider-Trading Law; Hillary Sale(Iowa), The Gatekeeping Role of Judges in Approving Settlements; Janis Serra (British Columbia), Legal and Governance Principles in Cross-Border Corporate Group Insolvencies; Cheryl Wade (St. John's), SOX Five Years Later: Calls for Repeal or Rollback, anad What the Public Does Not Know; Lynne Dallas (San Diego), Implications of the Post-SOX Changes in the Composition and Culture of Boards; and Barbara Black (Cincinnati), Should the SEC be a Collection Agency for Defrauded Investors?  Other participants include Renee Jones (Boston College), Elizabeth Nowicki (Tulane), Claire Moore Dickinson (Rutgers/Tulane), Cristine Hurt (Illinois), Faith Kahn (New York Law School).  Many thanks go to Dean Kellye Testy for hosting this wonderful conference at her beautiful law school!

What a Surprise...

SIFMA opposes extending Rule 10b-5 liability through the "scheme liability" theory.  Here is its press release:

The Securities Industry and Financial Markets Association (SIFMA) today issued the following statement in response to the pending Supreme Court case, Stoneridge Investment Partners v. Scientific-Atlanta and Motorola.  The Court’s ruling in the case could determine whether shareholders can collect damages from investment banks, attorneys, accountants, and other third-parties who did business with a company that engaged in fraud.  Such an outcome would unnecessarily generate significant additional litigation, costing billions of dollars to American businesses, and putting US companies at a competitive disadvantage to their foreign counterparts. 

“Expanding the scope of class action lawsuits to include third-parties would send large ripple effects throughout the US economy,” said Marc Lackritz, SIFMA president and CEO.  “The inclusion of third-parties would cause litigation costs to skyrocket at the expense of the American economy and its workers, by raising the costs for companies in the US and deterring foreign investment in our economy.”

“President Bush got it right yesterday in reiterating the administration’s policy of not expanding the scope of private shareholder litigation against third-parties,” added Lackritz.  “As the President said, this is not a case concerning investor protection; it’s about overzealous litigation.  The SEC already has all the necessary regulatory tools to recoup lost money for investors.” 

Online Discussion on Global Securities Offerings

SEC Historical Society Online Program
June 6, 2007

www.sechistorical.org
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

"Beyond Borders: A New Approach to the Regulation of Global Securities Offerings" - Wednesday, June 6th - 12:00 noon to 1:30 pm ET. Join Edward F. Greene, General Counsel, Citi Markets and Banking, as he discusses his recommendations on facilitating a world-wide securities marketplace while still maintaining investor protections, with David B.H. Martin, Covington & Burling LLP; Alan L. Beller, Cleary Gottlieb Steen & Hamilton LLP; Craig Beazer, General Electric Company; and Elisse B. Walter, NASD. The broadcast is available free of charge; no advance registration is required.

SEC Historical Society Broadcast on Insider Trading

Online Broadcast Tomorrow at www.sechistorical.org

Fireside Chat: Insider Trading - Tuesday, May 22nd - 3:00 pm ET.
Learn more about the persistence of insider trading fraud and why the SEC views it as the "capital crime" of securities regulation by joining Mark Radke of LeBoeuf Lamb Greene & MacRae LLP, a former Chief of Staff to SEC Chairman Harvey Pitt; and Donna Nagy of Indiana University School of Law in discussion with moderator Professor Theresa Gabaldon of The George Washington University School of Law. The Fireside Chat is available free of charge; no advance registration is required.

Corporate Law and Democracy Website

I urge all of you to visit a wonderful new blog, Corporate Law and Democracy, by Professor Renee Jones at Boston College Law School, intended to be a repository for multidisciplinary thought on "corporate law and democracy" and the influence of "corporations and corporate law on political and social structure."  Renee has posted some provocative and insightful posts and, in addition, has some first-rate contributions by stellar guest-bloggers-- this week, it's her (soon to be ex-) colleague Larry Cunningham (who is moving to George Washington).

SIFMA's Campaign Against FPA v. SEC

SIFMA (the trade association previously known as the Securities Industry Association) is putting pressure on the SEC to seek rehearing of FPA v. SEC, the D.C. Circuit's invalidation of the SEC rule exempting brokers that offer fee-based accounts from regulation as investment advisers.  It released a survey of investors showing that investors prefer choice of investment options instead of being forced into "cookie-cutter" accounts.  See SIFMA, Poll: Investors Value Choice FPA Lawsuit Could Limit Consumer Options.

Call For Papers: Conglomerate Online Workshop for Junior Scholars

Christine Hurt, who blogs on Conglomerate, asked me to announce Conglomerate's online workshop for junior scholars, and I am glad to do so.  The workshop provides a valuable service to junior scholars by connecting them with expert commentators in their field who provide helpful commentary and by introducing them to Conglomerate's readership.  Christine goes on to say: "Although I understand that causation would be impossible to prove, participants from the past two workshops who have gone on the market from visiting positions have had enormous success, including David Gamage, Paul Rose, Brian Galle, William Birdthistle, and Adam Levitin.  In addition, papers that were honed and sharpened during the workshop enjoyed equal success in the placement process. "   The Call for Papers is at its website.

Call for Papers-- UCincinnati 2008 Corporate Law Symposium

CALL FOR PAPERS

UNIVERSITY OF CINCINNATI COLLEGE OF LAW
Corporate Law Center and Law Review 2008 Corporate Law Symposium

The Dysfunctional Board: Causes and Cures

March 14, 2008

Hewlett-Packard presents a cautionary tale of the damage caused by distrust and dissension within the boardroom.  In fall 2006, Hewlett-Packard became embroiled in a headline-grabbing scandal and disgrace when the media reported that the board had authorized the use of possibly illegal tactics to determine the source of boardroom leaks.  In the resulting publicity, the underlying problem – the breach of the directors’ obligation to maintain the confidentiality of corporate information – was often overlooked.  More recently, Dow Chemical announced that it had fired two senior executives, one of whom is a director, for allegedly engaging in unauthorized talks to sell the company.  In another well-publicized “civil war,” in 2005 Morgan Stanley replaced its CEO and substantially reshaped its board of directors.

  What confluence of events can cause governance at highly-regarded corporations to go awry?   This symposium will explore the causes of dysfunctional boards and attempt to formulate some possible cures.

This is a call for papers.  If you are interested in presenting a paper on any aspect of this topic, please submit a proposal to Barbara Black, Charles Hartsock Professor of Law and Director, Corporate Law Center, University of Cincinnati College of Law.  Submissions should be no more than 5 single-spaced pages and should be sent by e-mail by May 31 to: barbara.black@uc.edu.

Presenters will be reimbursed for reasonable travel expenses to attend the conference, and papers will be published in the symposium issue of the University of Cincinnati Law Review.

Confirmed Speakers:

Lissa Lamkin Broome, Professor of Law, University of North Carolina School of Law

Lawrence A. Cunningham, Academic Dean, Libby Scholar and Professor of Law &  Business, Boston College Law School 

Tamar Frankel, Professor and Michaels Faculty Research Scholar, Boston University School of Law 

Kimberly D. Krawiec, Professor, University of North Carolina School of Law

NASAA Public Policy Program May 8

The North American Securities Administrators Association (NASAA) will hold its 2007 Public Policy Conference on May 8 in Washington, D.C. to focus attention on investor protection issues of key concern to both state securities regulators and the securities industry, NASAA President and Alabama Securities Commission Director Joseph P. Borg said today.

SIFMA Wants SEC to Request Re-Hearing of Fee-Based Accounts Decision

The Securities Industry and Financial Markets Association (SIFMA) today announced that it is urging the Securities and Exchange Commission to ask the D.C. Court of Appeals for a rehearing on the issue of fee-based brokerage accounts.  Late last month, the court ruled in favor of the Financial Planning Association (FPA) in its case against the Securities and Exchange Commission, finding the SEC exceeded its statutory authority under Section 202(a)(11)(F) of the Investment Advisers Act of 1940 when it  adopted Rule 202(a) (11)-1, which exempted broker-dealers offering fee-based brokerage accounts from registering as advisers.

“This ruling has the potential to significantly impair an important element of consumer choice for American investors and we strongly urge the SEC to ask for a rehearing.  With this decision, one million investors, with nearly $300 billion in assets, could see a significant reduction in their range of choices and options for receiving and paying for financial services.  Investors deserve no less than robust choice and vigorous competition,” said Marc Lackritz, President and CEO of SIFMA. 

Securities Industry '06 Profits a Record High

The US securities industry had a record breaking year in 2006, reporting full-year profits of $33.1 billion – 88.2% above the $17.6 billion earned in 2005, and 4.7% above the previous record of $31.6 billion in 2000.  See SIFMA press release, Securities Industry ’06 Profits Complete Record Breaking Year.

NASD Announces Structure and Organization for New SRO

With the formal consolidation of NASD and New York Stock Exchange Member Regulation on schedule for the second quarter, NASD Chairman and CEO Mary L. Schapiro today announced a number of important structural and organizational moves for the new SRO, focusing on the core areas of member regulation, enforcement, dispute resolution and technology.

Specifically, the changes announced today are:

Member Regulation

The new SRO's Member Regulation function will be split into two departments. Grace Vogel, who currently heads Member Firm Regulation at NYSE Regulation, will head the new SRO's Department of Risk Oversight and Operational Regulation, building on NYSE Regulation's Financial Operations expertise. Robert Errico, who currently heads Member Regulation at NASD, will lead the Department of Sales Practice Regulation, which will leverage the NASD District Office structure and NYSE Regulation's Sales Practice Review Unit in focusing on the wide range of issues involving the financial industry's relationship with the investing public.

Enforcement

The enforcement departments of both organizations will be fully integrated into a single Enforcement Department. Susan Merrill, who is in charge of Enforcement at NYSE Regulation, will be Chief of the combined operation and will be based in New York. NASD's current Enforcement chief, James Shorris, will serve as Executive Director and will be based in Washington.

Member Regulation, Enforcement and NASD's existing Market Regulation Department will report to Luparello.

Emerging Issues

NYSE Regulation's Office of Risk Assessment and the NASD Office of Emerging Issues will be combined into a single group, which will report to Elisse Walter, who currently oversees regulatory policy and programs at NASD. Investment Company Regulation, Investor Education, Corporate Finance, Advertising and Member Education will also report to Walter.

Dispute Resolution

Linda Fienberg, who runs NASD Dispute Resolution, will head the new SRO's Office of Dispute Resolution, which will combine NYSE Regulation's arbitration program with NASD's arbitration and mediation programs.

Technology

The integration of the two organizations' technology portfolios will be led by NASD's Chief Technology Officer, Marty Colburn, supported by NYSE's Angela Posillico.

Technology, as well as Strategy, Registration and Disclosure, Testing and Continuing Education, Member Relations, Transparency Services and International will continue to report to NASD's Doug Shulman.

AALS Sec Reg Call for Papers

Call for Papers: An Evaluation of the Recent Regulatory Reforms and Litigation
AALS Securities Regulation Section Meeting January 2008 in New York City

After the collapse of Enron, Adelphia, Worldcom and other high flyers of the 1990s, there was a crisis of confidence in American business and securities regulators. Numerous federal and state enforcement and regulatory actions occurred in the wake of these scandals. These included: the passage of the Sarbanes-Oxley Act of 2002; the research analyst prosecutions by the New York Attorney General and the Securities and Exchange Commission and the reform of the regulation of analysts; and prosecutions of mutual funds and reform of mutual fund governance. A torrent of criminal prosecutions and civil litigation under Rule 10b-5 and other securities law statutes also occurred.

Numerous law review articles have been written, explaining, praising or criticizing these developments.  Currently, several high-powered decision makers have asserted that the U.S. capital markets are becoming less competitive than overseas markets due, in part, to the U.S. regulatory and litigation environment.  Further, there has been a push back in the courts as to expansive interpretations by the SEC of its authority and expansive district court opinions regarding the reach of the anti-fraud provisions.

We are seeking papers for the January 2008 meeting of the AALS Securities Regulation Section in New York discussing any aspect of these developments.  A broad range of topics is possible, and we hope to have a lively discussion on whether regulatory and litigation developments have gone too far, not far enough or have appropriately dealt with the problems which led to the 1990s stock market bubble and its collapse. A special issue of the Brooklyn Journal of Corporate, Financial & Commercial Law will be devoted to these papers.

Please submit an abstract of any proposed papers and any available drafts  to Roberta S. Karmel at Brooklyn Law School by March 30, 2007, roberta.karmel@brooklaw.edu, or by mail to Brooklyn Law School, 250 Joralemon Street, Brooklyn, New York 11201.

"Understanding Your Brokerage Account Statements"

SIFM, NASAA and SIPC today released updated editions of  “Understanding Your Brokerage Account Statements,” available in English and Spanish.  The guide, which provides investors with tips on analyzing their monthly statement, includes new content on fee based accounts, as well as answers to frequently asked questions, details on common features of most brokerage account statements, a step-by-step checklist on how to review them, and an extensive glossary of investment terms that investors may come across while reviewing their statements.

Georgetown Law's Corporate Counsel Institute

Georgetown Law’s Eleventh Annual Corporate Counsel Institute

March 8-9, 2007

WHO: Christopher Cox
Chairman, U.S. Securities and Exchange Commission
"Priorities for 2007 at the SEC"
Paul McNulty
Deputy Attorney General, U.S. Department of Justice
"DOJ Enforcement Priorities"

Linda Chatman Thomsen
Director, Division of Enforcement, U.S. Securities and Exchange Commission
"Developments at the SEC"
(Thomsen is expected to make a major SEC policy announcement.)

Daniel Petrocelli
Partner, O’Melveny & Myers LLP
"Lessons from Enron"

Further information.

Lateral Moves in Academia

Gordon Smith is moving from Wisconsin to BYU.

Susan Stabile is moving from St. John's to St. Thomas (Minneapolis).

Congrats to both Gordon and Susan!

Endowed Chair at Seton Hall

Seton Hall School of Law has announced The Harvey Washington Wiley Chaired Professorship in Corporate Governance and Business Ethics.  Nominations and inquiries should be directed to:  Professor Charles A. Sullivan, Chair, Lateral Appointments Committee, Seton Hall School of Law, One Newark Center, Newark NJ 07102; email: sullivch@shu.edu

Symposium on Investors' Remedies

Corporate Law Symposium
University of Cincinnati College of Law
March 30, 2007
9 a.m. – 4 p.m.

Twenty Years After Shearson/American Express v. McMahon:
Assessing Investors’ Remedies

Panel 1:  Securities and Other Forms of Consumer Arbitration Compared

Moderator:  Jill Gross, Pace
Presenter:  Developing Fairness Protocols for the Era of Mass Arbitration,
Jeffrey Stempel, UNLV
Presenter:  Substantive and Procedural Fairness in Business Arbitration, Edward J. Brunet, Lewis & Clark
Commentator:  Stephen J. Ware, Kansas
Commentator:  Jill Gross

Panel 2:  Investors’ Remedies:  Arbitration and Litigation Compared

Moderator:  Barbara Black, UC
Presenter:  Mutual Fund Shareholder Claims: All Bark, No Bite, Mercer E. Bullard, U. Miss.
Presenter:  The Retail Investor and the Anti-Fraud Provisions of the Federal Securities Laws, Jennifer A. O’Hare, Villanova
Commentator:  Barbara Black

Lunch

Round Table:  The Current State of Securities Arbitration 

Catherine McGuire, Associate Director and Chief Counsel, Division of Market Regulation, SEC

Linda D. Fienberg, President, NASD Dispute Resolution

Joseph Borg, Alabama Securities Commissioner and President, North American Securities Administrators Association

Philip M. Aidikoff, Esq., Aidikoff, Uhl & Bakhtiari, Beverly Hills, CA

Kenneth Meister, Senior Vice President and General Counsel, Prudential Equity Group, Inc.

The Corporate Law Symposium is supported by a generous gift from Dinsmore & Shohl LLP.

For additional information, contact Barbara Black at barbara.black@uc.edu