Law Commons^™

Should Issuers Be On The Hook For Laddering? An Empirical Analysis Of The Ipo Market Manipulation Litigation, Adam C. Pritchard, Stephen J. Choi

Articles

On December 6, 2000, the Wall Street Journal ran a front-page story exposing abuses in the market for initial public offerings (IPOs). The story revealed "tie-in" agreements between investment banks and initial investors seeking to participate in "hot" offerings. Under those agreements, initial investors would commit to buy additional shares of the offering company's stock in secondary market trading in return for allocations of shares in the IPO. As the Wall Street Journal related, those "[c]ommitments to buy in the after-market lock in demand for additional stock at levels above the IPO price. As such, they provide the rocket fuel …

Corporations, Society, And The State: A Defense Of The Corporate Tax, Reuven S. Avi-Yonah

Articles

Corporations are both everywhere and nowhere. They are everywhere, first and foremost, on the economic scene: a large percentage of economic activity in the United States is effectuated through the corporate form. But the reach of corporations is far broader than that. Many of our other institutions, including universities, churches, hospitals, and other non-profit organizations, are in corporate form. Other salient features of our society, such as representative democracy, originated from the use of the corporate form in medieval England. Even the idea of the state itself originated in Roman and Medieval legal notions about corporate bodies.

Tender Offers By Controlling Shareholders: The Specter Of Coercion And Fair Price, Adam C. Pritchard

Articles

Taking your company private has never been so appealing. The collapse of the tech bubble has left many companies whose stock prices bordered on the stratospheric now trading at small fractions of their historical highs. The spate of accounting scandals that followed the bursting of the bubble has taken some of the shine off the aura of being a public company-the glare of the spotlight from stock analysts and the business press looks much less inviting, notwithstanding the monitoring benefits that the spotlight purports to confer. Moreover, the regulatory backlash against those accounting scandals has made the costs of being …

The Poison Pill In Japan: The Missing Infrastructure, Ronald J. Gilson

Faculty Scholarship

The coming of hostile takeovers to Japan has been anticipated, and anticipated, and anticipated. Each report of a reduction in the size of crossholdings among Japanese companies and in the size of Japanese bank stockholdings in their clients has given rise to an expectation that now, at last, hostile offers would emerge. It is not surprising that commentators looked forward, optimistically, to the arrival of a potentially disruptive takeover technique. The extended Japanese recession, together with management resistance to internally implemented restructurings and the barriers to externally imposed restructurings, has created the potential for substantial private and social gain from …

Globalizing Corporate Governance: Convergence Of Form Or Function, Ronald J. Gilson

Faculty Scholarship

Globalization has led to a remarkable resurgence in the study of comparative corporate governance. This area of scholarship had been largely the domain of taxonomists, intent on cataloguing the central characteristics of national corporate governance systems, and then classifying different systems based on the specified attributes. The result was an interesting, if perhaps somewhat dry, enterprise. We learned that national corporate governance systems differed dramatically along a number of seemingly important dimensions. Some corporate governance systems, notably those of the United States and other Anglo-Saxon countries, are built on the foundation of a stock market-centered capital market. Other systems, like …

Overcoming Resistance To Diversity In The Executive Suite: Grease, Grit, And The Corporate Tournament, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

Once we open the corporate governance/human resources nexus to deeper inquiry, mutual scholarly interest in diversity and discrimination follows naturally. Firms have complex motives to take nondiscrimination and the promotion of diversity seriously. First, at least certain forms of discrimination are both unlawful and socially illegitimate and hence present threats of potential liability and injury to reputation. Second, human resources demands are such that attracting and motivating a diverse workforce is a competitive imperative. At the same time, however, offsetting economic forces may exist that favor subtle forms of discrimination and hostility to diversity, even if intentional and overt racial …

Gaming Delaware, William W. Bratton

Georgetown Law Faculty Publications and Other Works

Back in 2000, at the World Trade Center in Portland, Oregon, Time Belden and other Enron electricity traders carefully studied the regulations governing California's new electricity market. Belden thought that the complex rules were "prone to gaming." And game them he did. Under one strategy, Enron filed imaginary transmission schedules, creating nonexistent congestion, so as to draw on the rules' provision of payment to alleviate congestion. They called it "Death Star." Then there was "Ricochet," or megawatt laundering, under which Enron circumvented price caps by exporting power out of California, only to bring the power back later, when the State, …

Some Thoughts On Proposed Revisions To The Organizational Guidelines, Julie R. O'Sullivan

Georgetown Law Faculty Publications and Other Works

In this article, Professor O'Sullivan, who served as the reporter for the U.S. Sentencing Commission's Ad Hoc Advisory Group for Organizational Sentencing Guidelines, reflects on that Group's work. She concludes that the potential impact of many of the policy fixes within the power of the Sentencing Commission is dwarfed by decisions that lie solely within the power of the Department of Justice or Congress. Specifically, Department of Justice decisions regarding what constitutes organizational "cooperation" may have a determinative impact on organizational incentives regarding compliance efforts and decisions to investigate, self-report, and cooperate in the remediation of organizational wrongdoing. Professor O'Sullivan …

Rules, Principles, And The Accounting Crisis In The United States, William W. Bratton

Georgetown Law Faculty Publications and Other Works

The Sarbanes-Oxley Act and the Securities Exchange Commission move too quickly when they prod the Financial Accounting Standards Board, the standard setter for US GAAP, to move immediately to a principles-based system. Priorities respecting reform of corporate reporting in the US need to be ordered more carefully. Incentive problems impairing audit performance should be solved first through institutional reform insulating the audit from the negative impact of rent-seeking and solving adverse selection problems otherwise affecting audit practice. So long as auditor independence and management incentives respecting accounting treatments remain suspect, the US reporting system holds out no actor plausibly positioned …

Capitalism And Freedom -- For Whom? Feminist Legal Theory And Progressive Corporate Law,, Kellye Y. Testy

Articles

Beginning at least in the 1980s, the version of corporate law and governance prevailing in the U.S. (as well as widely exported to other nations) was a radically privatized one, treating the corporation as a contractual arrangement for maximizing shortterm share price in a laissez faire global marketplace. Though many robust and varied social movements, many of which were bolstered by the 1999 WTO protests in Seattle, have been and are engaged in challenging this hegemony from many angles, few have found their way into corporate law reform. That is not to say, however, that there are no progressive legal …

Executive Compensation Reform And The Limits Of Tax Policy, Michael Doran

Georgetown Law Faculty Publications and Other Works

The American Jobs Creation Act of 2004 includes a major attempt to reform the tax rules for deferred compensation arrangements covering corporate managers. This paper examines the tax policy and corporate-governance policy objectives of the reform effort, explores the shortcomings of the legislation, and outlines a different approach for future executive compensation reform.

The Sarbanes-Oxley Act: A Bird's-Eye View, Niels Schaumann

Faculty Scholarship

It is the goal of this article to provide a brief reference to the multitude of changes in the law wrought by SOX. The author's hope is that this will be of use to students, scholars, and practitioners seeking an overview of the extensive changes resulting from this legislation. The discussion is broader than it is deep; indeed, a work attempting to examine SOX in depth would soon become a treatise and not just an article. The remainder of this article, then, will seek to provide a big-picture view of SOX: Part II of this article will address SOX regulation …

Economic Organization In The Construction Industry: A Case Study Of Collaborative Production Under High Uncertainty, William A. Klein, Mitu Gulati

Faculty Scholarship

No abstract provided.

Measuring Share Price Accuracy, Merritt B. Fox

Faculty Scholarship

This Article concerns how to measure share price accuracy. It is prompted by the fact that many scholars believe that the prices established in the stock market affect the efficiency of the real economy. In their view, more accurate prices increase the amount of value added by capital-utilizing enterprises as these enterprises use society's scarce resources for the production of goods and services. More accurate share prices help improve both the quality of choice among new proposed investment projects in the economy and the operation of existing real assets currently in corporate hands.

The proposition that more accurate share prices …