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Full-Text Articles in Law
Unraveling China's Capital Market Growth: A Political Economy Account, Tamar Groswald Ozery
Unraveling China's Capital Market Growth: A Political Economy Account, Tamar Groswald Ozery
SJD Dissertations
With modern, successful firms that operate globally and a capital market that is the second largest in the world, corporate governance in China has long passed the point of an “adjust or perish” prognostic. Yet its firm governance and capital market functions maintain strong idiosyncrasies that go against many fundamentals in economics and legal thought. These idiosyncrasies are products of the underlying configurations of China’s political economy and the shifts within it. Political economy in China has a determinant role on the ways corporate ownership is organized, firms operate, and the capital market functions. It is responsible for many of …
Private Enforcement Of Company Law And Securities Regulation In Korea, Hwa-Jin Kim
Private Enforcement Of Company Law And Securities Regulation In Korea, Hwa-Jin Kim
Book Chapters
This chapter offers a brief overview of the private enforcement of corporate law and securities regulation in Korea, with particular reference to the current legislative efforts in the Korean National Assembly and recent court cases. This chapter also talks about Korea’s ill-fated and misguided adoption of the fraud-on-the-market theory in securities fraud litigation.
Protecting The State From Itself? Regulatory Interventions In Corporate Governance And The Financing Of China's 'State Capitalism', Nicholas C, Howson
Protecting The State From Itself? Regulatory Interventions In Corporate Governance And The Financing Of China's 'State Capitalism', Nicholas C, Howson
Book Chapters
From the start of China’s “corporatization without privatization” process in the late 1980s, a Chinese corporate governance regime, apparently shareholder-empowering and determined by enabling legal norms, has been altered by mandatory governance mechanisms imposed by a state administrative agency, the China Securities Regulatory Commission (CSRC). This has been done to protect minority shareholders against exploitation by the Party-state controlling shareholders, the power behind China’s “state capitalism.” This chapter reviews the path of this benign intervention by the CSRC and the structural reasons for it, and then speculates on why this novel example of the China’s “fragmented authoritarianism” continues to be …
Legally "Strong" Shareholders Of Japan, Gen Goto
Legally "Strong" Shareholders Of Japan, Gen Goto
Michigan Business & Entrepreneurial Law Review
Foreign investors often criticize Japanese corporations for not paying enough attention to the interests of their shareholders. It might surprise these critics, then, to learn that shareholders’ legal rights under the Japanese Companies Act are actually quite strong. Indeed, many of the rights that shareholders’ rights advocates often support, including shareholders’ power to alter a corporate charter without board consent, shareholders’ power to control dividend payments, majority voting for board elections, shareholders’ power to replace the board of directors, and shareholder access to a corporate ballot—all of which are strongly debated elsewhere— are already effective in Japan. Moreover, derivative suits …
Insider Trading And Other Securities Frauds In The United States: Lessons For Chile, Dante Figueroa
Insider Trading And Other Securities Frauds In The United States: Lessons For Chile, Dante Figueroa
Michigan Business & Entrepreneurial Law Review
This Article is a comparative analysis of insider trading law in the United States and Chile. The study summarily reviews the historical, political, and legal foundations of insider trading regulation in both jurisdictions, identifying areas of convergence, as well as areas in which the Chilean securities market could benefit vis- ` a-vis the more advanced experience of the considerably larger American securities market. The Article also highlights the axiological closeness between both jurisdictions concerning the protection of inside corporate information and the fiduciary role of those who intervene in securities markets in their various capacities (as investors, shareholders, corporate officers, …
'Quack Corporate Governance' As Traditional Chinese Medicine – The Securities Regulation Cannibalization Of China's Corporate Law And A State Regulator's Battle Against Party State Political Economic Power, Nicholas C. Howson
Articles
From the start of the People’s Republic of China’s (PRC) “corporatization ” project in the late 1980s, a Chinese corporate governance regime subject to increasingly enabling legal norms has been determined by mandatory regulations imposed by the PRC securities regulator, the China Securities Regulatory Commission (CSRC). Indeed, the Chinese corporate law system has been cannibalized by all - encompassing securities regulation directed at corporate governance, at least for companies with listed stock. This Article traces the path of that sustained intervention and makes a case — wholly contrary to the “quack corporate governance” critique much aired in the United States …
The Future Of Securities Class Actions Against Foreign Companies: China And Comity Concerns, Dana M. Muir, Junhai Liu, Haiyan Xu
The Future Of Securities Class Actions Against Foreign Companies: China And Comity Concerns, Dana M. Muir, Junhai Liu, Haiyan Xu
University of Michigan Journal of Law Reform
In Morrison v. National Australia Bank Ltd., the U.S. Supreme Court limited the application of U.S. securities fraud law in transnational situations. The Supreme Court noted that its decision was influenced by international comity considerations. In this Article, we evaluate the availability of class actions in China in cases involving alleged securities fraud. Because we find that the availability of those actions is too limited to fully protect U.S. shareholders, we argue that U.S. investors should be permitted to bring securities fraud class actions against non-U.S. companies whose securities are traded on a U.S. exchange regardless of where those investors …
Favoritism And Corporate Law: The Confused Corporate Opportunity Doctrine In The Hyundai Motor Case, Hwa-Jin Kim, Seung Hwan Lee, Stephen M. Woodcock
Favoritism And Corporate Law: The Confused Corporate Opportunity Doctrine In The Hyundai Motor Case, Hwa-Jin Kim, Seung Hwan Lee, Stephen M. Woodcock
Michigan Business & Entrepreneurial Law Review
Core legal principles of U.S. corporate law are often met with perplexity in foreign jurisdictions. This is especially true for legal principles that are controversial even in the U.S. This Article takes the corporate opportunity doctrine and examines how it has been exported to the civil law regime in Korea. Korean conglomerates such as Samsung Group and Hyundai Motor Group have become major players in the global market, but corporate law and practice in Korea have had a difficult time keeping up with developments in the business sector. The Hyundai Motor Case demonstrates an ambitious, but ill-fated, attempt at the …
Private Regulation Of Insider Trading In The Shadow Of Lax Public Enforcement: Evidence From Canadian Firms, Laura Nyantung Beny, Anita Anand
Private Regulation Of Insider Trading In The Shadow Of Lax Public Enforcement: Evidence From Canadian Firms, Laura Nyantung Beny, Anita Anand
Articles
Like firms in the United States, many Canadian firms voluntarily restrict trading by corporate insiders beyond the requirements of insider trading laws (i.e., super-compliance). Thus, we aim to understand the determinants of firms’ private insider trading policies (ITPs), which are quasi-contractual devices. Based on the assumption that firms that face greater costs from insider trading (or greater benefits from restricting insider trading) ought to be more inclined than other firms to adopt more stringent ITPs, we develop several testable hypotheses. We test our hypotheses using data from a sample of firms included in the Toronto Stock Exchange/Standard and Poor’s (TSX/S&P) …
Populist Retribution And International Competition In Financial Services Regulation, Adam C. Pritchard
Populist Retribution And International Competition In Financial Services Regulation, Adam C. Pritchard
Articles
The pattern of regulatory reform in financial services regulation follows a predictable pattern in democratic states. A hyperactive market generates a bubble, the bubble deflates, and much financial pain ensues for those individuals who bought at the top of the market. The financial mess brings the scrutiny of politicians, who vow "Never again!" A political battle ensues, with representatives of the financial services industry fighting a rearguard action to preserve its prerogatives amidst cries for the bankers' scalps. Regulations, carefully crafted to win the last war, are promulgated. Memories fade of the foolish enthusiasm that fed the last bubble. Slowly, …
Securities Class Actions Move North: A Doctrinal And Empirical Analysis Of Securities Class Actions In Canada, Adam C. Pritchard, Janis P. Sarra
Securities Class Actions Move North: A Doctrinal And Empirical Analysis Of Securities Class Actions In Canada, Adam C. Pritchard, Janis P. Sarra
Articles
The article explores securities class actions involving Canadian issuers since the provinces added secondary market class action provisions to their securities legislation. It examines the development of civil liability provisions, and class proceedings legislation and their effect on one another. Through analyses of the substance and framework of the statutory provisions, the article presents an empirical and comparative examination of cases involving Canadian issuers in both Canada and the United States. In addition, it explores how both the availability and pricing of director and officer insurance have been affected by the potential for secondary market class action liability. The article …
International Capital Taxation., Rachel Griffith, James R. Hines Jr., Peter Birch Sørensen
International Capital Taxation., Rachel Griffith, James R. Hines Jr., Peter Birch Sørensen
Book Chapters
Globalization carries profound implications for tax systems, yet most tax systems, including that of the UK, still retain many features more suited to closed economies. The purpose of this chapter is to assess how tax policy should reflect the changing international economic environment. Institutional barriers to the movement of goods, services, capital, and (to a lesser extent) labour have fallen dramatically since the Meade Report (Meade, 1978) was published. So have the costs of moving both real activity and taxable profits between tax jurisdictions. These changes mean that capital and taxable profits in particular are more mobile between jurisdictions than …
The Development Of Modern Corporate Governance In China And India, Nicholas C. Howson, Vikramaditya S. Khanna
The Development Of Modern Corporate Governance In China And India, Nicholas C. Howson, Vikramaditya S. Khanna
Book Chapters
Corporate governance reform has become a topic of considerable debate both in the US and in many emerging markets. Indeed, the discussion is important because these reforms may have potentially long-standing effects upon the global allocation of capital, and in understanding the ways in which governance norms are communicated across markets and nations in an ever-globalizing world. In this chapter we examine the corporate governance reform efforts of the world's two biggest and fastest growing emerging markets, the People's Republic of China (PRC or China) and India. In the process we find that our understanding of how and why corporate …
London As Delaware?, Adam C. Pritchard
London As Delaware?, Adam C. Pritchard
Articles
Jurisdictional competition in corporate law has long been a staple of academic-and sometimes, political-debate in the United States. State corporate law, by long-standing tradition in the United States, determines most questions of internal corporate governance-the role of boards of directors, the allocation of authority between directors, managers and shareholders, etc.-while federal law governs questions of disclosure to shareholders-annual reports, proxy statements, and periodic filings. Despite substantial incursions by Congress, most recently in the Sarbanes-Oxley Act of 2002, this dividing line between state and federal law persists, so state law arguably has the most immediate impact on corporate governance outcomes.
Monitoring Of Corporate Groups By Independent Directors, Adam C. Pritchard
Monitoring Of Corporate Groups By Independent Directors, Adam C. Pritchard
Articles
Both the United States and Korea have reformed their corporate governance in recent years to put increasing responsibilities on independent directors. Independent directors have been found to be an important force protecting the interests of shareholders when it comes time to make certain highly salient decisions, such as firing a CEO or selling the company. This article compares the role of independent directors in the US and Korean systems. I argue that the US may have placed regulatory burdens on independent directors that they are unlikely to be able to satisfy, given their part-time status. By contrast, in the chaebol …
London As Delaware?, Adam C. Pritchard
London As Delaware?, Adam C. Pritchard
Articles
In the United States, state corporate law determines most questions of internal corporate governance - the role of directors; the allocation of authority between directors, managers, and shareholders; etc. - while federal law governs questions of disclosure to shareholders - annual reports, proxy statements, and periodic filings. Despite substantial incursions by Congress, most recently with the Sarbanes-Oxley Act, this dividing line between state and federal law persists, so state law arguably has the most immediate effect on corporate governance outcomes.
Do Investors In Controlled Firms Value Insider Trading Laws? International Evidence, Laura Nyantung Beny
Do Investors In Controlled Firms Value Insider Trading Laws? International Evidence, Laura Nyantung Beny
Articles
This article characterizes insider trading as an agency problem in firms that have a controlling shareholder. Using a standard agency model of corporate value diversion through insider trading by the controlling shareholder, I derive testable hypotheses about the relationship between corporate value and insider trading laws among such firms. The article tests these hypotheses using firm-level cross-sectional data from twenty-seven developed countries. The results show that stringent insider trading laws and enforcement are associated with greater corporate valuation among the sample firms in common law countries, a result that is consistent with the claim that insider trading laws mitigate agency …
The Yukos Money Laundering Case: A Never-Ending Story, Dmitry Gololobov
The Yukos Money Laundering Case: A Never-Ending Story, Dmitry Gololobov
Michigan Journal of International Law
The Yukos case has unveiled the possible dangers of money laundering legislation in the hands of governments with transitional economies and weak democratic traditions. Even if the anti-money laundering laws of the country comply with international pronouncements to the letter, there are still a number of ways the laws could be used for the sole purpose of persecuting political opponents. In the Yukos case, the money laundering charges were interrelated with the charges of corporate tax evasion, which, taken separately, in Russia, represent a rather weak tool for suppressing the political opponents, but taken together they are perfect for the …
Insider Trading Rules Can Affect Attractiveness Of Country's Stock Markets, Laura Nyantung Beny
Insider Trading Rules Can Affect Attractiveness Of Country's Stock Markets, Laura Nyantung Beny
Articles
The academic debate about the desirability of prohibiting insider trading is longstanding and as yet unresolved. Until Henry Manne’s 1966 book, Insider Trading and the Stock Market, the debate centered on whether insider trading is unfair to public investors who are not privy to private corporate information. However, the fairness approach is malleable and indeterminate and thus does not lend itself to clear-cut policy prescriptions. Since Manne’s book, the focus of the debate has been on the effect of insider trading on economic efficiency. Manne argued that, contrary to the prevailing legal and moral opinion of the time, insider trading …
Insider Trading Laws And Stock Markets Around The World: An Empirical Contribution To The Theoretical Law And Economics Debate, Laura Nyantung Beny
Insider Trading Laws And Stock Markets Around The World: An Empirical Contribution To The Theoretical Law And Economics Debate, Laura Nyantung Beny
Articles
The primary goal of this Article is to bring empirical evidence to bear on the heretofore largely theoretical law and economics debate about insider trading. The Article first summarizes various agency, market, and contractual (or "Coasian") theories of insider trading propounded over the course of this longstanding debate. The Article then proposes three testable hypotheses regarding the relationship between insider trading laws and several measures of stock market performance. Exploiting the natural variation of international data, the Article finds that more stringent insider trading laws are generally associated with more dispersed equity ownership, greater stock price accuracy and greater stock …
China's Acquisitions Abroad - Global Ambitions, Domestic Effects, Nicholas C. Howson
China's Acquisitions Abroad - Global Ambitions, Domestic Effects, Nicholas C. Howson
Articles
In the past year or so, the world has observed with seeming trepidation what appears to be a new phenomenon-China's "stepping out" into the world economy. The move, labeled the "Going Out Strategy" by Chinese policy makers, sees China acting in the world not just as a trader of commodities and raw materials, or the provider of inexpensively-produced consumer goods for every corner of the globe, but as a driven and sophisticated acquirer of foreign assets and the equity interests in the legal entities that control such assets. The New Yorker magazine, ever topical and appropriately humorous, highlighted this attention …
Competition, Corporate Responsibility, And The China Question, Jospeh Vining
Competition, Corporate Responsibility, And The China Question, Jospeh Vining
Other Publications
"Corporate responsibility" is not a peripheral matter. It is at the core of all decision-making on behalf of business corporations under American law. This paper examines the effort to add an exemption for "business" in corporate form to the exemptions from ordinary responsibility that are seen in other areas of activity - e.g., for the military, for lawyers in adversarial litigation, or for investigators in scientific research. It looks at a number of well known cases and points to the often neglected relevance of both the criminal law applicable to corporations as such, and the evolving professional responsibility of corporate …
Hail Britannia?: Institutional Investor Behavior Under Limited Regulation, Bernard S. Black, John C. Coffee Jr.
Hail Britannia?: Institutional Investor Behavior Under Limited Regulation, Bernard S. Black, John C. Coffee Jr.
Michigan Law Review
The two authors of this article have been on opposite sides of this debate, but both recognize that no single explanation is complete and that other factors, such as the self-interest of fund managers, the conflicts of interest faced by institutions who want to retain corporate business, cultural forces, collective action problems, and what we can call path dependence- the difficulty of changing the structure and behavior of highly evolved and specialized institutions - have causal roles in explaining shareholder passivity. The central question in research on American corporate governance is how these forces interact to produce the characteristic …
Withdrawal And Expulsion In Germany: A Comparative Perspective On The "Close Corporation Problem", Hugh T. Scogin Jr.
Withdrawal And Expulsion In Germany: A Comparative Perspective On The "Close Corporation Problem", Hugh T. Scogin Jr.
Michigan Journal of International Law
This article will examine the German legal system's experience with fashioning remedies for the "close corporation problem" and the underlying concepts that have shaped these remedies. Part I will trace the growth of the doctrines of withdrawal and expulsion in the context of Germany's troubled history. Part II will compare German and U.S. approaches on both practical and conceptual levels. On one level, the focus of the article is narrow. It deals with specific, technical solutions to only the most extreme examples of the close corporation problem. Such cases are not frequently litigated. Their doctrines do, however, constitute default rules …
A Comparative Study Of The Laws Of The Philippine Islands And Of The United States Of America Applicable To Private Corporations, Emilio M. Javier
A Comparative Study Of The Laws Of The Philippine Islands And Of The United States Of America Applicable To Private Corporations, Emilio M. Javier
SJD Dissertations
The main objective of the present treatise is to expound the similarities and dissimilarities of the laws of the Philippine Islands and of the United States of America applicable to private corporations. Act 1459, otherwise known as the Philippine Corporation Law, as amended and as radically modified recently, in many or its important provisions, by Act 3518, is made the basis of discussion from the Philippine view point. All the decisions of the Supreme Court of the Islands interpreting the provisions of the law, and which the author considers pertinent, are also discussed herein. Due to the fact that each …