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The Dystopian Potential Of Corporate Law, D. Gordon Smith Dec 2008

The Dystopian Potential Of Corporate Law, D. Gordon Smith

Faculty Scholarship

The community of corporate law scholars in the United States is fragmented. One group, heavily influenced by economic analysis of corporations, is exploring the merits of increasing shareholder power vis-a-vis directors. Another group, animated by concern for social justice, is challenging the traditional, shareholder-centric view of corporate law, arguing instead for a model of stakeholder governance. The current disagreement within corporate law is as fundamental as in any area of law, and the debate is more heated than at any time since the New Deal. This paper is part of a debate on the audacious question, Can Corporate Law Save ...


The Undercivilization Of Corporate Law, A. Christine Hurt Dec 2008

The Undercivilization Of Corporate Law, A. Christine Hurt

Faculty Scholarship

No abstract provided.


Electronic Tax Fraud - Are There 'Sales Zappers' In Japan?, Richard Thompson Ainsworth Oct 2008

Electronic Tax Fraud - Are There 'Sales Zappers' In Japan?, Richard Thompson Ainsworth

Faculty Scholarship

Although there is no public acknowledgement - in the press, in a court case, though any announcement by the Japanese National Tax Administration, or in any academic studies or papers - that Zappers and Phantom-ware are a fraud problem in Japan, a number of factors suggest that Japan may be very fertile ground for technology-assisted cash skimming fraud. Those factors include: (1) a high concentration of small to medium sized businesses; (2) the fact that the retail economy is highly cash-based; and (3) the high level of technology acceptance in the Japanese retail sector - electronic cash registers (ECRs) and point of sale ...


Linkage And The Deterrence Of Corporate Fraud, Miriam Baer Oct 2008

Linkage And The Deterrence Of Corporate Fraud, Miriam Baer

Faculty Scholarship

No abstract provided.


Tales Of Two Regimes For Regulating Limited Liability Law Firms In The Us And Australia: Client Protection And Risk Management Lessons, Susan Saab Fortney Sep 2008

Tales Of Two Regimes For Regulating Limited Liability Law Firms In The Us And Australia: Client Protection And Risk Management Lessons, Susan Saab Fortney

Faculty Scholarship

This essay contrasts the regimes that allow limited liability partnerships in the US and fully incorporated legal practices in Australia. The essay argues that Australia has taken advantage of an opportunity to develop innovative and necessary regulation of law firm ethical infrastructure with the introduction of incorporated legal practices, but the United States has not yet adequately addressed the consumer and ethical risks of limited liability partnerships. This essay raises the issue of whether Australia’s requirement that incorporated law firms should implement “appropriate management systems” to ensure ethical conduct is a model that could fruitfully be applied to all ...


Zappers And Phantom-Ware At The Fta: Are They Listening Now?, Richard Thompson Ainsworth Jul 2008

Zappers And Phantom-Ware At The Fta: Are They Listening Now?, Richard Thompson Ainsworth

Faculty Scholarship

When the Federation of Tax Administrators (FTA) held a national Compliance and Education Workshop in Louisville, Kentucky (February 25-27, 2001) one of the invited speakers was Kevin Pratt, Manager, Underground Economy, Canadian Customs and Revenue Authority (CCRA). He spoke on Zappers.

To the best of anyone's present recollection, this was the first time zappers had been discussed with a large group of state-level US tax compliance professionals. However, most of the information that the CCRA presented to the FTA in 2001 was not its own - it was derivative. Zapper investigations were not an in-house specialty of the CCRA (although ...


Insuring Corporate Crime, Miriam Baer Jul 2008

Insuring Corporate Crime, Miriam Baer

Faculty Scholarship

No abstract provided.


Zappers & Phantom-Ware: A Global Demand For Tax Fraud Technology, Richard Thompson Ainsworth Jun 2008

Zappers & Phantom-Ware: A Global Demand For Tax Fraud Technology, Richard Thompson Ainsworth

Faculty Scholarship

There is a demand-market for technology that facilitates tax fraud. By all accounts the providers in this market are working in a growth industry.

In the short term this is bad news for those concerned with tax policy and information privacy. In the long term however, the fight against technology-assisted fraud is stimulating the development of a more robust technology base within tax administrations, and this is good news for those who believe that a sophisticated technological infrastructure is needed to resolve difficult questions of tax design.

This paper focuses on two technology-accelerants of SME tax fraud - zappers and phantom-ware ...


Mtic (Carousel) Fraud: Twelve Ways Forward; Two Ways 'Preferred' - Has The Technology-Based Administrative Solution Been Rejected?, Richard Thompson Ainsworth Mar 2008

Mtic (Carousel) Fraud: Twelve Ways Forward; Two Ways 'Preferred' - Has The Technology-Based Administrative Solution Been Rejected?, Richard Thompson Ainsworth

Faculty Scholarship

In a May 31, 2006 Communication to the Council, the European Parliament, and the European Economic and Social Committee, the European Commission indicated a need to develop a co-ordinated strategy to improve the fight against fiscal fraud [COM(2006) 254 final]. Although the Communication considers fiscal fraud broadly (VAT, excise duties and direct taxes) the most pressing need seems to be for a VAT strategy that will effectively deal with MTIC (Missing Trader Intra-Community) or carousel fraud. To this end the Commission hosted a conference: Fiscal Fraud - Tackling VAT Fraud: Possible Ways Forward. The March 29, 2007 conference was constructed ...


Zappers: Tax Fraud, Technology And Terrorist Funding, Richard Thompson Ainsworth Feb 2008

Zappers: Tax Fraud, Technology And Terrorist Funding, Richard Thompson Ainsworth

Faculty Scholarship

"Zappers," or automated sales suppression devices, have brought unheard of efficiencies and economies of scale to a very simple tax fraud - skimming cash sales at point of sale (POS) terminals (electronic cash registers). Until recently the largest tax fraud case in Connecticut, also the "largest computer driven tax-evasion case in the nation," was a zapper case. Stew Leonard's Dairy in Norwalk Connecticut skimmed $17 million in receipts and hid the cash in St. Martin (a Caribbean island). Talal Chahine and his wife, Elfat El Aouar, owners of the La Shish restaurant chain in Detroit Michigan have the dubious honor ...


The Private Costs Of Patent Litigation, James Bessen, Michael Meurer Feb 2008

The Private Costs Of Patent Litigation, James Bessen, Michael Meurer

Faculty Scholarship

This paper estimates the total cost of patent litigation to alleged infringers. We use a large sample of stock market event studies around the date of lawsuit filings for US public firms from 1984-99. We find that the total costs of litigation are much greater than legal fees and costs are large even for lawsuits that settle. Lawsuits cost alleged infringers about $28.7 million ($92) in the mean and $2.9 million in the median. Moreover, infringement risk rose sharply during the late 1990s to over 14% of R&D spending. Small firms have lower risk relative to R ...


It-Apas - Vertical Harmonization Of Transfer - Pricing Standards, Richard Thompson Ainsworth Jan 2008

It-Apas - Vertical Harmonization Of Transfer - Pricing Standards, Richard Thompson Ainsworth

Faculty Scholarship

The World Customs Organization (WCO) and the Organization of Economic Cooperation and Development (OECD) have begun considering the harmonization of transfer pricing norms among income tax, customs and VAT regimes. Two conferences have been organized in May of 2006 and 2007.

These conferences have concluded so far: (a) that more analysis is needed; (b) that harmonization will require adjustments on all sides; and (c) that pilot projects (real world statutory and administrative efforts to harmonize) or case studies in harmonization (hypothetical fact patterns) are needed to facilitate consideration. This paper assesses the three basic paths being pursued at the present ...


The Impact Of The Sarbanes-Oxley Act On Non-Shareholder Constituents: A Silver Lining, But Will It Endure?, Lisa M. Fairfax Jan 2008

The Impact Of The Sarbanes-Oxley Act On Non-Shareholder Constituents: A Silver Lining, But Will It Endure?, Lisa M. Fairfax

Faculty Scholarship

No abstract provided.


Corporate Ethics, Agency, And The Theory Of The Firm, Robert J. Rhee Jan 2008

Corporate Ethics, Agency, And The Theory Of The Firm, Robert J. Rhee

Faculty Scholarship

This conference paper suggests that the problem of corporate ethics cannot be reduced to the autonomous person. Although the greatest influence on action and choice is one's moral constitution, it does not follow that the agent's behavior is the same within or without the firm. Ethics is a function of corporate form. The theory of agency cannot dismiss the firm as a fiction or metaphorical shorthand since that which does not exist should not be able to cause ethical breakdowns in corporate action. Thus, the theory of the firm, which emphasizes profit and wealth maximization, should incorporate a ...


Assessing Interest Groups: A Playing Field Approach, Paul Stancil Jan 2008

Assessing Interest Groups: A Playing Field Approach, Paul Stancil

Faculty Scholarship

Despite general public antipathy toward the political influence exerted by corporations, industries, and other special interests, prescriptive applications of interest group theory have not gained much traction. This is primarily a function of previous commentators' inability to solve two difficult and related problems: (1) development of a consensus normative framework in which to apply interest group theory; and (2) development of a meaningful, objective, and workable approach to measuring interest group dynamics in the real world. The article offers solutions to both.

The article first proposes workably competitive pluralism as a norm to which the regulatory process should aspire in ...


The Continuing Need For Broker-Dealer Professionalism In Ipos, James A. Fanto Jan 2008

The Continuing Need For Broker-Dealer Professionalism In Ipos, James A. Fanto

Faculty Scholarship

No abstract provided.


Corporate Policing And Corporate Governance: What Can We Learn From Hewlett-Packard's Pretexting Scandal, Miriam Baer Jan 2008

Corporate Policing And Corporate Governance: What Can We Learn From Hewlett-Packard's Pretexting Scandal, Miriam Baer

Faculty Scholarship

No abstract provided.


Forming Entities To Negotiate Community Benefits Agreements, Debra Bechtel Jan 2008

Forming Entities To Negotiate Community Benefits Agreements, Debra Bechtel

Faculty Scholarship

No abstract provided.


Preventive Law: A Strategy For Internal Corporate Lawyers To Advise Managers Of Their Ethical Obligations, Z. Jill Barclift Jan 2008

Preventive Law: A Strategy For Internal Corporate Lawyers To Advise Managers Of Their Ethical Obligations, Z. Jill Barclift

Faculty Scholarship

This article examines the efficacy of Preventive Law jurisprudence to internal corporate law practice. The article compares internal corporate law practice to the practice approach of Preventive Law. The article explores the benefits of Preventive Law jurisprudence to internal corporate law practice. Part I discusses the history and various vectors of Preventive Law. Part II examines the responsibilities of corporate law departments. Part III compares Preventive Law practice skills to internal corporate law practice, and explores the utility of Barton’s problem solving approaches to internal corporate law practice. Finally, the article concludes arguing internal corporate law practice is Preventive ...


Irrevocable Proxies, Deborah A. Demott Jan 2008

Irrevocable Proxies, Deborah A. Demott

Faculty Scholarship

This short article explores the circumstances under which the power to vote shares owned by another may be made irrevocable. Irrevocable proxies often serve as integral ingredients within corporate governance arrangements because they serve as mechanisms that enable alliances among shareowners or enhance the holder’s voting power in disproportion to the holder’s residual economic interest in the corporation. The rights and duties of holders of irrevocable proxies are best understood against a background of common-law agency relationships, in which agent and principal always have the power–albeit having contracted otherwise–to terminate their relationship and the agent’s ...


Understanding The ‘Corporate’ In Corporate Social Responsibility, Barak D. Richman, Aaron K. Chatterji Jan 2008

Understanding The ‘Corporate’ In Corporate Social Responsibility, Barak D. Richman, Aaron K. Chatterji

Faculty Scholarship

No abstract provided.


Signaling Through Board Diversity: Is Anyone Listening?, Kimberly D. Krawiec, Lissa Lamkin Broome Jan 2008

Signaling Through Board Diversity: Is Anyone Listening?, Kimberly D. Krawiec, Lissa Lamkin Broome

Faculty Scholarship

The ethnic and gender make-up of corporate boards has been the subject of intense public and regulatory focus in many countries, including the United States, in recent years. Of particular interest has been quantitative research on the impact, if any, of board diversity on corporate performance. This body of work leaves substantial gaps in our understanding of the precise mechanisms by which board diversity may alter the corporate environment, if indeed it does. In this Symposium, we discuss some preliminary findings from our first thirty-five of a series of confidential, semi-structured interviews of 45 to 90 minutes in length with ...


Do Patents Perform Like Property?, Michael Meurer, James Bessen Jan 2008

Do Patents Perform Like Property?, Michael Meurer, James Bessen

Faculty Scholarship

Do patents provide critical incentives to encourage investment in innovation? Or, instead, do patents impose legal risks and burdens on innovators that discourage innovation, as some critics now claim? This paper reviews empirical economic evidence on how well patents perform as a property system.


Dirty Dancing: The Fda Stumbles On The Chevron Two-Step, Gary Lawson Jan 2008

Dirty Dancing: The Fda Stumbles On The Chevron Two-Step, Gary Lawson

Faculty Scholarship

Professor Lars Noah deserves much credit for exposing some of the myriad ways in which the Food and Drug Administration (FDA) has consistently sought to expand its authority through questionable, and perhaps in some cases abusive, legal practices.' As Professor Noah observes, there are signs that the federal courts' century-long honeymoon with the FDA may be ending 2 -and perhaps the FDA never deserved the solicitude that it has traditionally received from both the judiciary and Congress. 3 If Professor Noah can hasten the onset of a more realistic legal and public attitude toward the FDA, he will have performed ...


How The Merits Matter: Directors' And Officers' Insurance And Securities Settlements, Tom Baker, Sean J. Griffith Jan 2008

How The Merits Matter: Directors' And Officers' Insurance And Securities Settlements, Tom Baker, Sean J. Griffith

Faculty Scholarship

This Article seeks what may be the holy grail of securities law scholarship—the role of the "merits" in securities class actions--by investigating the relationship between settlements and directors' and officers' (D&O) liability insurance. Drawing upon in-depth interviews with plaintiffs' and defense lawyers, D&O insurance claims managers, monitoring counsel, brokers, mediators, and testifying experts, we elucidate the key factors influencing settlement and examine the relationship between these factors and notions of merit in civil litigation. We find that, although securities settlements are influenced by some factors that are arguably merit related, such as the "sex appeal" of a ...


We Are All Entrepreneurs Now, David E. Pozen Jan 2008

We Are All Entrepreneurs Now, David E. Pozen

Faculty Scholarship

A funny thing happened to the entrepreneur in legal, business, and social science scholarship. She strayed from her capitalist roots, took on more and more functions that have little to do with starting or running a business, and became wildly popular in the process. Nowadays, "social entrepreneurs" tackle civic problems through innovative methods, "policy entrepreneurs" promote new forms of government action, "norm entrepreneurs" seek to change the way society thinks or behaves, and "moral entrepreneurs" try to alter the boundaries of duty or compassion. "Ethnification entrepreneurs," "polarization entrepreneurs," and other newfangled spinoffs pursue more discrete objectives. Entrepreneurial rhetoric has never ...


The Market For Bad Legal Advice: Academic Professional Responsibility Consulting As An Example, William H. Simon Jan 2008

The Market For Bad Legal Advice: Academic Professional Responsibility Consulting As An Example, William H. Simon

Faculty Scholarship

Clients demand bad legal advice when legal advice can favorably influence third-party conduct or attitudes even when it is wrong. Lawyers supply bad legal advice most readily when they are substantially immunized from accountability to the people it is intended to influence. Both demand and supply conditions for a flourishing market are in place in several quarters of the legal system. The resulting practices, however, are in tension with basic professional and academic values. I demonstrate these tensions through critiques of the work of academic professional responsibility consultants in such matters as Enron, Lincoln Savings & Loan, and a heretofore undiscussed ...


Creditor Control And Conflict In Chapter 11, Kenneth M. Ayotte, Edward R. Morrison Jan 2008

Creditor Control And Conflict In Chapter 11, Kenneth M. Ayotte, Edward R. Morrison

Faculty Scholarship

We analyze a sample of large privately and publicly held businesses that filed Chapter 11 bankruptcy petitions during 2001. We find pervasive creditor control. In contrast to traditional views of Chapter 11, equityholders and managers exercise little or no leverage during the reorganization process: Seventy percent of CEOs are replaced in the two years before a bankruptcy filing; very few reorganization plans (at most eight percent) deviate from the absolute priority rule in order to distribute value to equityholders. Senior lenders exercise significant control through stringent covenants contained in DIP loans, such as line-item budgets. Unsecured creditors gain leverage through ...


A Requiem For Sam's Bank, Ronald J. Mann Jan 2008

A Requiem For Sam's Bank, Ronald J. Mann

Faculty Scholarship

This paper situates Wal-Mart's failed application to form a banking subsidiary in the context of payments policy. Generally, I argue that permitting Wal-Mart to have a bank would have a salutary effect on the relatively uncompetitive market for payment networks. The dominant position of Visa and MasterCard, in which payments are priced above cost to subsidize credit, inevitably will give way to a world in which payment services are priced at cost, or even below cost as a loss-leader to attract customers to other goods and services. Entry into this market by Wal-Mart would be likely to spur more ...


Sovereign Wealth Funds And Corporate Governance: A Minimalist Response To The New Merchantilism, Ronald J. Gilson, Curtis J. Milhaupt Jan 2008

Sovereign Wealth Funds And Corporate Governance: A Minimalist Response To The New Merchantilism, Ronald J. Gilson, Curtis J. Milhaupt

Faculty Scholarship

Sovereign wealth funds (SWFs) have increased dramatically in size as a result of increased commodity prices and the increase in the foreign currency reserves of Asian trading countries. SWF assets now roughly equal those in hedge and private equity funds combined. This growth, and the shift of SWF investment strategy toward equities and increasingly high profile investments like capital infusions into U.S. financial institutions following the subprime mortgage problem, have generated calls for domestic and international regulation. The U.S. and other western economies already regulate the foreign acquisition of control of domestic corporations. However, acquisitions of significant but ...