Law Commons^™

After Citizens United: Extending The Liberal Revolution To The Multinational Corporation, Daniel J.H. Greenwood

Daniel J.H. Greenwood

This Article proposes several routes to reverse Citizens United, the Supreme Court case holding that corporate campaign spending is “speech” protected by the First Amendment.

The core problem of Citizens United is that corporations are illegitimate participants in our politics. Corporate law requires corporate officers to pursue the corporate interest. They are thus disqualified from considering the central political questions of a democratic capitalist country: defining the rules of the market (which define corporate interests) and balancing profit against other, more important, values.

The high road to fixing Citizens United is a constitutional amendment to extend the fundamental insights …

Puzzles In Controlling Shareholder Regimes And China: Shareholder Primacy And (Quasi) Monopoly, Sang Yop Kang

Sang Yop Kang

Professor Mark Roe explained that the shareholder wealth maximization norm (“the norm”) is not fit for a country with a (quasi) monopoly, because the norm encourages managers to maximize monopoly rents, to the detriment of the national economy. This Article provides new findings and counter-intuitive arguments as to the tension created by the norm and (quasi) monopoly by exploring three key corporate governance concepts that Roe did not examine—(1) “controlling minority structure” (CMS), where dominant shareholders hold a fractional ownership in their controlled-corporations, (2) “tunneling” (i.e., illicit transfer of corporate wealth to controlling shareholders), and (3) Chinese state-owned enterprises (SOEs). …

Limiting Leukophobia: Looking Beyond Lockup. Debunking The Strategy Of Turning White Collars Orange, Jared J. Hight

Jared J Hight

The legal and political landscape of the past 30 years has resulted in the abandonment of the utilitarian principle of parsimony as applied to white collar criminals. In response to preceding decades of minor punishments meted out for serious white collar crimes, the Federal Sentencing Commission abandoned the typical past practices of sentencing judges and instead formulated Guidelines that are wildly excessive and no longer balance the need for community safety with the need for that same community to remain economically efficient. The guiding principles of deterrence, rehabilitation, and incapacitation have been deemphasized in a new model that focuses primarily …

An Approach To The Regulation Of Spanish Banking Foundations, Miguel Martínez

Miguel Martínez

The purpose of this paper is to analyze the legal framework governing banking foundations as they have been regulated by Spanish Act 26/2013, of December 27th, on savings banks and banking foundations. Title 2 of this regulation addresses a construct that is groundbreaking for the Spanish legal system, still of paramount importance for the entire financial system insofar as these foundations become the leading players behind certain banking institutions given the high interest that foundations hold in the share capital of such institutions.

The Moral Undercurrent Beneath The Regulatory Regime Of Investor Protection, Huhnkie Lee

Huhnkie Lee

No abstract provided.

Person, State Or Not: The Place Of Business Corporations In Our Constitutional Order, Daniel J.H. Greenwood

Daniel J.H. Greenwood

Business corporations are critical institutions in our democratic republican market-based economic order. The United States Constitution, however, is completely silent as to their status in our system. The Supreme Court has filled this silence by repeatedly granting corporations rights against the citizenry and its elected representatives.

Instead, we ought to view business corporations, like municipal corporations, as governance structures created by We the People to promote our general Welfare. On this social contract view, corporations should have the constitutional rights specified in the text: none. Instead, we should be debating which rights of citizens against governmental agencies should also apply …

Broad Shareholder Value And The Inevitable Role Of Conscience, Paul D. Weitzel, Zachariah J. Rodgers

Paul D. Weitzel

This article proposes an integrative solution to the modern debate on corporate purpose, the question of whether directors and officers must solely maximize profits or whether they may consider the effects on employees, the environment or the community. Many find pure profit maximization unseemly and suggest alternative theories, typically arguing that corporations owe a duty to a broader range of stakeholders. This position is inconsistent with the case law and unnecessary to allow conscience in the board room. We resolve the issue more simply by acknowledging that the purpose of a corporation is to promote the shareholders’ interests, which includes …

Optimized Theft: Why Some Controlling Shareholders “Generously” Expropriate From Minority Shareholders, Sang Yop Kang

Sang Yop Kang

Although controlling shareholder agency problems have been well studied so far, many questions still remain unanswered. In particular, an important puzzle in a bad-law jurisdiction is: why some controlling shareholders (“roving controllers”) loot the entire corporate assets at once, and why others (“stationary controllers”) siphon a part of corporate assets on a continuous basis. To solve this conundrum, this Article provides analytical frameworks exploring the behaviors and motivations of controlling shareholders. To begin with, I reinterpret Olson’s political theory of “banditry” in the context of corporate governance in developing countries. Based on a new taxonomy of controlling shareholders (“roving controllers” …

Re-Envisioning Investors’ Anti-Director Rights Index: Theory, Criticism, And Implications, Sang Yop Kang

Sang Yop Kang

‘Law and Finance’ theory – which offers analytical frameworks to measure the protection of public investors and the quality of corporate governance – has dominated the comparative corporate governance scholarship in the last decade. So far, many proponents and critics have had debates on the relevance of the theory and the implications of the theory’s empirical studies. Several important points in relation to shareholder protection, however, have been highly neglected in these debates. In particular, the significance of one-share-one-vote (OSOV) rule has been inappropriately underestimated. In response, this Article explores (1) why OSOV is an utmost critical component in corporate …