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Articles 1 - 4 of 4
Full-Text Articles in Securities Law
On The Role And Regulation Of Proxy Advisors, Paul Rose
On The Role And Regulation Of Proxy Advisors, Paul Rose
Michigan Law Review First Impressions
In anticipation of proxy season-the springtime ritual where companies prepare and deliver proxy statements in preparation for annual shareholder meetings-U.S. public companies typically reexamine their corporate governance structures and policies. Many corporate governance structures that were acceptable ten years ago are now considered outmoded or even evidence of managerial entrenchment. For example, consider the classified board of directors. In recent years, many companies have shifted from a classified board of directors to an annually elected board. A company might adopt an annually-elected board structure for a number of reasons. A classified board can serve as an entrenchment device, for instance, …
Are Investors’ Gains And Losses From Securities Fraud Equal Over Time? Theory And Evidence, Alicia J. Davis
Are Investors’ Gains And Losses From Securities Fraud Equal Over Time? Theory And Evidence, Alicia J. Davis
Law & Economics Working Papers
Most leading securities regulation scholars argue that compensating securities fraud victims is inefficient. They maintain that because diversified investors that trade frequently are as likely to gain from trading in fraud-tainted stocks as they are to suffer harm from doing so, these investors should have no expected net losses from fraud over the long term. This assertion, which analogizes trading in fraud-tainted stocks to participating in a coin toss game in which players win $1 on heads and lose $1 on tails, is problematic for a number of reasons. First, even if we accept this analogy, probability theory holds that …
Turning A Short-Term Fling Into A Long-Term Commitment: Board Duties In A New Era, Nadelle Grossman
Turning A Short-Term Fling Into A Long-Term Commitment: Board Duties In A New Era, Nadelle Grossman
University of Michigan Journal of Law Reform
Corporate boards face significant pressure to make decisions that maximize profits in the short run. That pressure comes in part from executives who are financially rewarded for short-term profits despite the long-term risks associated with those profit-making activities. The current financial crisis, where executives at AIG and numerous other institutions ignored the long-term risks associated with their mortgage backed securities investments, arose largely because those executives were compensated for the short-term profits generated by those investments despite their longer-term risks. Pressure on boards for short-term profits also comes from activist investors who seek to make quick money off of trading …
The Case For Semi-Strong-Form Corporate Scienter In Securities Fraud Actions, Paul B. Maslo
The Case For Semi-Strong-Form Corporate Scienter In Securities Fraud Actions, Paul B. Maslo
Michigan Law Review First Impressions
The mental state of scienter - intent to defraud - is a required element of a securities fraud claim. The scienter inquiry is fairly straightforward when the defendant is an individual. It is more complex when a corporate entity is involved because a corporation can only act through its agents; it has no mind of its own. This article compares the three approaches courts have used to impute scienter to corporate defendants in the securities fraud context and concludes by recommending the approach which strikes an appropriate balance between several dueling public policy concerns.