Law Commons^™

Dashboard Compliance: Benefit, Threat, Or Both?, James Fanto

Brooklyn Journal of Corporate, Financial & Commercial Law

This Article poses the basic question that is reflected in its title and that was the subject of the conference where the Article was initially presented: whether technology poses any threats to the mission of compliance and the position of compliance officers, whether it is just another useful tool for them, or whether it is something of both. It begins by explaining the origin of compliance in broker-dealers and investment advisers and its important current position in those firms. It then discusses why compliance officers have always been drawn to technology, particularly to keep up with the business sides of …

The Question Concerning Technology In Compliance, Sean J. Griffith

Brooklyn Journal of Corporate, Financial & Commercial Law

In this symposium Essay, I apply insights from philosophy and psychology to argue that modes of achieving compliance that focus on technology undermine, and are undermined by, modes of achieving compliance that focus on culture. Insisting on both may mean succeeding at neither. How an organization resolves this apparent contradiction in program design, like the broader question of optimal corporate governance arrangements, is highly idiosyncratic. Firms should therefore be accorded maximum freedom in designing their compliance programs, rather than being forced by enforcement authorities into a set of de facto mandatory compliance structures.

Do The Merits Matter: Empirical Evidence On Shareholder Suits From Options Backdating Litigation, Minor Myers, Q. Curtis

Faculty Scholarship

No abstract provided.

Dissecting Hobby Lobby'S Corporate Person: A Procedural Proposal For Aligning Corporate Rights And Responsibilities, Andrew J. Fleming

Brooklyn Law Review

Over the years, the U.S. Supreme Court’s corporate personhood decisions have allowed for the corporation to become increasingly more “person-like” by recognizing corporate constitutional rights that were previously reserved for flesh-and-blood human beings. Yet in cases where the rights of corporations are evaluated, the Court’s analysis flows from an axiomatic conceptualization of the corporation as a static, theoretical being, as if plucked straight from a business organizations law school textbook. The result is a gulf between corporate rights as “persons” and corporate legal responsibilities. Nowhere is that gulf more evident than in the Court’s personal jurisdiction jurisprudence. In particular, this …

A Cautionary Look At A Cautionary Doctrine, Andrew W. Fine

Brooklyn Journal of Corporate, Financial & Commercial Law

Optimism is an indispensable element of effective salesmanship. It is therefore quite natural for the directors of public companies to want to optimistically tout the potential long-term benefits of investing in their companies. After all, directors of public companies must be empowered to attract the attention and money of American investors. But what happens if these long-term projections fail to come true? Who is to blame for long-term projections that are simply unrealistic? A doctrine called the “bespeaks caution” doctrine has emerged in order to govern these inquiries, and holds that these optimistic forward-looking statements are legally immunized provided that …

Another Bite At The Apple For Trade Secret Protection: Why Stronger Federal Laws Are Needed To Protect A Corporation's Most Valuable Property, Alissa Cardillo

Brooklyn Journal of Corporate, Financial & Commercial Law

Trade secrets are one of a corporation’s most valuable assets. However, they lack adequate protection under federal law, leaving them vulnerable to theft and misappropriation. As technology advances, it becomes easier and less time consuming for individuals and entities to access and steal trade secrets to a corporation’s detriment. Most often these thefts involve stealing trade secrets in an intangible form. Current legislation fails to adequately protect intangible trade secrets, leaving them vulnerable to theft. An amendment to the National Stolen Property Act that encompasses intangible trade secrets would close a loophole that currently exists relating to intangible assets, allowing …

The Challenge Of Fiduciary Regulation: The Investment Advisors Act After Seventy-Five Years, Roberta S. Karmel

Brooklyn Journal of Corporate, Financial & Commercial Law

Seventy-five years after its enactment the Investment Advisers Act of 1940 has advanced from a relatively weak statute merely registering advisers with the Securities and Exchange Commission (SEC) to a more robust law imposing fiduciary responsibilities on advisers. Over the years, the number of investment advisers and the number of their clients have increased greatly. The SEC therefore has been pressured by Congress to develop a harmonized fiduciary standard for broker-dealers and advisers and also to develop and enforce a greater degree of oversight over the advisory industry. These developments have raised the questions of how to fund such efforts …

Making Corporate Law More Communitarian: A Proposed Response To The Roberts Court's Personification Of Corporations, Robert M. Ackerman, Lance Cole

Brooklyn Law Review

Both Citizens United and Hobby Lobby are notable for the Roberts Court’s personification of the corporation. In Citizens United, the United States Supreme Court expanded corporate speech rights in a political context; in Hobby Lobby, it accorded religious rights to corporations in an unprecedented manner. This article explains how the Court’s expansion of corporate personification has ignored both traditional corporate law doctrine regarding shareholder primacy and the fundamental distinction in corporate law between the corporate entity and the shareholders who control it.

The article takes a communitarian approach to corporate law analysis, recognizing that corporations play useful roles …

Share And Share Dislike: The Rise Of Uber And Airbnb And How New York City Should Play Nice, Alexandra Jonas

Journal of Law and Policy

Uber and Airbnb are two companies in the emerging “sharing economy” that provide individuals with a means to become entrepreneurs and benefit from a laissez-faire business model. The problem, however, is that while the benefits to users are great, so too are the risks. The dangers of operating without restraint and circumventing existing law are not only potentially harmful to unapprised users, but also adversely affect the continued use of these businesses. Every aggrieved user complaint has the potential for a lawsuit and every violation creates an opportunity for penalties. Left over are attempts by the courts and city government …

Personal Injury Victims As Insurance Collection Agents: Erisa Preemption Of State Antisubrogation Laws, Jonathan P. Connery

Journal of Law and Policy

The Employee Retirement Income Security Act (ERISA) was enacted in 1974 to protect the pension rights of employees nationwide. However, due to its broad preemptive powers, ERISA has since developed into a tool used by health insurers to recover millions of dollars in tort damages meant to benefit employees with ERISA health plans. This practice, known as subrogation, has been met with legislative backlash in the form of state antisubrogation statutes, which attempt to limit the enforceability of subrogation clauses found in almost all ERISA health plans. However, many courts have held that ERISA preempts these antisubrogation statutes, thereby affirming …

Fortifying The Rights Of Unauthorized Immigrant Workers: Why Employee-Focused Incentives Under The Nlra Would Help End The Cycle Of Labor Rights Abuse, Caitlin E. Delaney

Journal of Law and Policy

Over the past several decades, there has been an unmistakable tension between labor law and immigration law in the United States. That tension, addressed by the Supreme Court most recently in 2001, still exists for unauthorized immigrant workers who wish to assert their labor rights under the National Labor Relations Act (NLRA). While the Obama Administration has made significant strides in easing the concerns that unauthorized immigrant workers may have before filing an NLRA claim, the unavailability of the back pay remedy and the uncertainty of protection from immigration authorities leave little incentive for such workers to assert their labor …

The New Governance And The Challenge Of Litigation Bylaws, Jill E. Fisch

Brooklyn Law Review

Corporate governance mechanisms designed to ensure that managers act in shareholders’ interest have evolved dramatically over the past 40 years. “Old governance” mechanisms such as independent directors and performance-based executive compensation have been supplemented by innovations that give shareholders greater input into both the selection of directors and ongoing operational decisions. Issuer boards have responded with tools to limit the exercise of shareholder power both procedurally and substantively. This article terms the adoption and use of these tools, which generally take the form of structural provisions in the corporate charter or bylaws, the “new governance.”

Delaware law has largely taken …

Open Sesame: The Myth Of Alibaba's Extreme Corporate Governance And Control, Yu-Hsin Lin, Thomas Mehaffy

Brooklyn Journal of Corporate, Financial & Commercial Law

In September 2014, Alibaba Group Holding Limited (Alibaba) successfully launched a $25 billion initial public offering (IPO), the largest IPO ever, on New York Stock Exchange. Alibaba’s IPO success witnessed a wave among Chinese Internet companies to raise capital in U.S capital markets. A significant number of these companies have employed a novel, but poorly understood corporate ownership and control mechanism—the variable interest entity (VIE) structure and/or the disproportional control structure. The VIE structure was created in response to the Chinese restriction on foreign investments; however, it carries the risk of being declared illegal under Chinese law. The disproportional control …