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Full-Text Articles in Business
You Can’T Stop What You Can’T See: Complementary Risk Mitigation Through Compensation Disclosure, Matt Reeder
You Can’T Stop What You Can’T See: Complementary Risk Mitigation Through Compensation Disclosure, Matt Reeder
William & Mary Business Law Review
Section 956 of the Dodd-Frank Act requires regulators to help prevent the next financial crisis by monitoring executive compensation arrangements to prevent them from becoming excessive or leading to “material financial loss.” A now-pending rule seeks to do just this. This Article argues that the rule is well-conceived inasmuch as it limits the total portion of compensation that can be based on risk-inducing incentives, ties incentive-based compensation to longer-term performance, places a ceiling on potential incentivebased earnings, provides for downward adjustment and clawbacks, prohibits many hedging behaviors, and institutionalizes governance mechanisms and oversight policies. But, by placing a number of …
Broker-Dealers, Institutional Investors, And Fiduciary Duty: Much Ado About Nothing?, Lynn Bai
Broker-Dealers, Institutional Investors, And Fiduciary Duty: Much Ado About Nothing?, Lynn Bai
William & Mary Business Law Review
Under the mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC is soliciting public opinions on whether broker-dealers should be subject to a fiduciary duty when advising retail and institutional investors. This Article focuses on the advisability of such a proposal for institutional investors. It shows that, first, a fiduciary duty could potentially enhance broker-dealers’ standard of conduct for only a subset of institutional investors who are well capitalized, capable of assessing risks independently, and acknowledge in writing their nonreliance on broker-dealers’ advice. Thus, the benefit of fiduciary duty is much narrower than what …