Law Commons^™

Entrenched Managers & Corporate Social Responsibility, Shane M. Shelley

ExpressO

A growing number of academics have suggested U.S. corporate governance laws bestow too much power on managers. Much of the research focuses on the relationship between corporate governance arrangements, which supply a means to managerial power, and the financial performance of corporations. This exclusive focus on financial performance may be misguided. Although profits serve as a proxy for the benefits corporations provide society, they do not always adequately reflect the costs of the activities that generated them. In this sense, financial performance may not give an accurate, or at least complete, picture of the real value of corporations. Whether managers …

Overvalued Equity And The Case For An Asymmetric Insider Trading Regime, Thomas A. Lambert

ExpressO

The forty-year debate over whether insider trading should be regulated has generally proceeded in all-or-nothing terms: Either all insider trading should be permitted (subject only to private restrictions imposed by issuers themselves), or none should. This Article argues for an asymmetric insider trading policy under which insider trading that decreases the price of an overvalued stock is generally permitted, but insider trading that increases the price of an undervalued stock is generally prohibited. Concluding that the net investor benefits of price-decreasing insider trading exceed those of price-enhancing insider trading, the Article argues that an asymmetric insider trading regime likely represents …

Global Pharmaceutical Patent Law In Developing Countries- Amending Trips To Promote Access For All, Angela J. Anderson

ExpressO

This comment will analyze the need to amend and revise the current global pharmaceutical patent system under TRIPS to take into account the needs of developing countries and overall public health. This comment will emphasize that the current international trade rules, which although administered by the WTO, are dictated by developed country governments and powerful pharmaceutical companies, and therefore, without reform will further diminish the access of poor people in developing countries to vital medicines. Part II of this comment will provide a general overview of the international trade law governing patents on pharmaceuticals focusing specifically on the development of …

The Marginal Incentive Of Insider Trading: An Economic Reinterpretation Of The Case Law, Kristoffel R. Grechenig

ExpressO

Commentators on insider trading are divided into two camps, one in favor of regulation, the other in favor of deregulation. The arguments for the two positions are manifold but not irreconcilable. I show that important gains to social welfare come with insider trading on negative information (sales), whereas losses often result from the use of positive information (purchases). Thus, I look at a regulation that allows insiders to use negative but not positive non-public information. Because positive information will be disclosed much sooner than negative information, the marginal incentive (and marginal gain to social welfare, respectively) of insider trading as …

Against Freedom Of Commercial Expression, Tamara R. Piety

ExpressO

An article that announces itself in the title as “against freedom” has a heavy burden of persuasion to carry. At this time and in this place, it seems almost un-American to be “against freedom,” (however much our civil liberties have in fact been circumscribed in recent years). Nevertheless, the most significant word in the title is not “against” or “freedom,” but “commercial.” Conventional wisdom in the First Amendment area would have it that there is no meaningful basis on which to distinguish between commercial speech and other speech for purposes of the First Amendment. And in recent years the courts …

Galactic Stupidity And The Business Judgment Rule, David Rosenberg

ExpressO

The article examines whether the business judgment rule allows courts to review the substantive wisdom of decisions made by corporate directors. Although the conventional view among legal scholars is that the business judgment rule precludes such review, the article concludes that Delaware courts must sometimes examine the substance of directors’ decisions in order to determine whether those directors acted in good faith. Where the evidence shows that a director acted in a rational way (and therefore in good faith) in arriving at a decision, courts will not review the substance of that decision. However, where a director made a decision …

Informal Economy: Is It A Problem, A Solution Or Both? The Perspective Of The Informal Business, Omar E. Garcia-Bolivar

ExpressO

This paper deals with the informal economy. For many it is a solution, for others it is a problem. What can the law do to incorporate the informal economy into the formal economy? Does it really matter? What are the challenges?

Before Competition: Origins Of The Internal Affairs Doctrine, Frederick Tung

ExpressO

To the modern corporate scholar and lawyer, the internal affairs doctrine seems in the natural order of things. Corporate law is state law. Each corporation is formed under the law of its chosen state of incorporation. To ensure consistency and predictability, that law must govern the corporation’s internal affairs. Yet the origin of such a doctrine is puzzling. Respecting the firm’s choice of corporate law, the doctrine forces state legislatures into competition to attract incorporations. But how did legislatures come to concede their traditional territorial regulatory authority, and instead agree to compete? This Article solves this puzzle, offering the first …

Global Pharmaceutical Patent Law In Developing Countries- Amending Trips To Promote Access For All, Angela J. Anderson

ExpressO

This comment will analyze the need to amend and revise the current global pharmaceutical patent system under TRIPS to take into account the needs of developing countries and overall public health. This comment will emphasize that the current international trade rules, which although administered by the WTO, are dictated by developed country governments and powerful pharmaceutical companies, and therefore, without reform will further diminish the access of poor people in developing countries to vital medicines. Part II of this comment will provide a general overview of the international trade law governing patents on pharmaceuticals focusing specifically on the development of …

Putting Regulation Before Responsibility: Towards Binding Norms Of Corporate Social Responsibility, Thomas F. Mcinerney

ExpressO

Globalization of business has heightened concerns regarding corporate conduct in developing countries. Critics have charged that multinational firms in particular have exported social harms involving labor, the environment, bribery, and human rights to jurisdictions outside of their home countries. Opportunities for regulatory arbitrage and the associated collective action problem such opportunities suggest, highlight the need for strong regulatory responses to these issues. Rather than prioritize the strengthening of national or international regulatory actors to address these social harms, voluntary corporate social responsibility initiatives have emerged as a favored response within the international community. This article undertakes a critical examination of …

Preventing International Terrorism: Can Multinational Corporations Offer A Fresh New Perspective?, Jocelyne Kokaz-Muslu

ExpressO

Multinational corporations (“MNC”s) while investing in new ventures all over the world, have managed a variety of risk factors such as developing country risk, language risk, cultural risk, currency risk, and political risk including terrorism. The risk management strategies that have worked for MNCs would be beneficial and effective for states around the world, as well as the United States of America (“USA”), to win the war against terrorism. Furthermore, the USA has a unique position in the world, where it has accumulated dormant knowledge regarding fighting terrorism in light of its ownership of the most respected, most profitable and …

Good Faith, State Of Mind, And The Outer Boundaries Of Director Liability In Corporate Law, Christopher M. Bruner

ExpressO

The Delaware General Corporation Law was amended in 1986 to permit shareholder-approved exculpatory charter provisions shielding directors from monetary liability for certain types of fiduciary duty breaches, explicitly excepting breaches of the duty of loyalty and conduct not in "good faith" – evidently distinct concepts in the Delaware legislature’s view. This paper examines the development of corporate fiduciary duty doctrine in Delaware leading up to and following this statutory amendment, focusing particularly on the Delaware courts' evolving conception of the meaning and doctrinal status of good faith. Specifically, the paper argues that Delaware's statutory exculpation regime and good faith case …

Populism And Patents, Kimberly A. Moore

ExpressO

Lawyers and other commentators often remark that American courts, and particularly American juries, are prejudiced against large corporate entities. Existing empirical research attempting to confirm this suspicion is contradictory and suffers from a number of shortcomings. In this Article, Professor Moore reexamines the issue by reporting the results of research on an original dataset of over 4000 patent cases and more than a million patents. The results cast substantial doubt on the hypothesis that individuals and corporations are treated identically in jury trials of patent property rights. In jury trials of patent cases between corporations and individuals, the individual won …

Sarbanes-Oxley's Structural Model To Encourage Corporate Whistleblowers, Richard E. Moberly

ExpressO

Recent corporate scandals demonstrate that rank-and-file employees often remain silent in the face of significant fraud. This silence is unfortunate because corporate employees have inside knowledge of misconduct that gives them an information advantage over more traditional corporate monitors, such as independent directors and government regulators. To address this problem, the Sarbanes-Oxley Act utilized a new approach that encourages employee whistleblowers to disclose information about corporate wrongdoing. This approach, which Professor Richard Moberly labels the “Structural Model,” requires that corporations provide a standardized channel for employees to report organizational misconduct to official monitors within the corporation. This Article offers an …

The Market For Takeover Defenses, Sharon Hannes

ExpressO

This paper develops a market-based approach to takeover defenses. In this framework, a firm’s decision to go public without defenses is considered a decision to produce an unshielded target. The paper shows that the voluminous classical literature on takeover defenses, which argues either that takeover defenses are good for all firms or that they are bad for all firms, actually ignores both supply and demand considerations. Recent empirical findings that revealed that IPO-stage firms diverge in antitakeover practices led to the rapid development of a new branch in the literature. This branch emphasizes that firms diverge in defense-adopting costs due …

Fair Use And The First Amendment: Corporate Control Of Copyright Is Stifling Documentary Making And Thwarting The Aims Of The First Amendment, Paige Gold

ExpressO

Documentary motion pictures constitute a crucial part of contemporary public debate, because in today’s highly consolidated mass media environment, documentaries offer the kinds of independent voices that the First Amendment was designed to protect. However, current intellectual property practices are chilling speech by forcing documentary filmmakers to tailor their films to accommodate new, strict licensing practices. When filmmakers are compelled to edit their work to meet insurance requirements, it harms the interests of not just the filmmaker, but also the public. Thus, the “clearance culture,” in which anything and everything that could possibly lead to a lawsuit must be cleared, …

Equal Treatment Of Foreign Shareholders In Transnational Securities Class Action Against A Foreign Issuer—A Chinese Example, Clark Yao

ExpressO

As the world economy and financial markets become increasingly more integrated, cross-boarder securities transaction becomes a daily event. Because Unite States has the world’s largest and arguably most liquid capital markets, it has attracted a significant number of foreign companies to cross-list their stocks in a U.S. stock exchange. Unavoidably, such transactions will not only bring out fortune, but also disputes between transacting parties. Relying on the powerful federal securities law , U.S. investors who have bought or sold such stocks have routinely sued foreign stock issuers through class action when the stock prices went down, alleging their loss is …

Legislation And Legitimation: Congress And Insider Trading In The 1980s, Thomas W. Joo

ExpressO

Legislation and Legitimation:

Congress and Insider Trading in the 1980s

Abstract

Orthodox corporate law-and-economics holds that American corporate and securities regulation has evolved inexorably toward economic efficiency. That position is difficult to square with the fact that regulation is the product of government actors and institutions. Indeed, the rational behavior assumptions of law-and-economics suggest that those actors and institutions would tend to place their own self-interest ahead of economic efficiency. This article provides anecdotal evidence of such self-interest at work. Based on an analysis of legislative history—primarily Congressional hearings—this article argues that Congress had little interest in the economic policy …

Unraveling The Veil: The Concepts Of Limited Liability And Disregard Of The Corporate Entity, C. Christopher Adkins

ExpressO

An overview of limited liability and the doctrine of piercing the corporate veil. I focus on the factors courts consider in determining whether to disregard the corporate entity.

Comparative Corporate Governance: Irish, American, And European Responses To Corporate Scandals, Manish Gupta

ExpressO

A comparative review of legislative reactions to corporate scandals such as Enron and WorldCom. This paper examines American, Irish, and European Union legislation meant to deal with regulating corporations.

Law As Rationalization: Getting Beyond Reason To Business Ethics, Jeffrey Marc Lipshaw

ExpressO

Embedded in the way we use the law is the tendency of human reason to justification, in the words of one philosopher, “the thirst for rationality that creates lies.” I contend that this tendency is exacerbated by the conflation of what is knowable as a matter of science, and that which we might believe is normative. I rely on Kant’s critique of theoretical and practical reason to assess claims to objectivity in social science approaches to law, and to suggest it is not surprising that the operation of theoretical and practical reason would tend to the conflation of the descriptive …

Implementation Of Sarbanes-Oxley: New Rules For Lawyers And What Lawyers Think, Olga Yevglevskaya-Wayne

ExpressO

This paper discusses practical implications of Sarbanes-Oxley for lawyers. Emphasis is on the new federal rules of professional responsibility the Act sets up. The paper includes the views of various renowned practitioners interpreting and using these rules. The paper also contains suggestions for how the Securities and Exchange Commission could potentially improve those areas that are proving problematic for attorneys so as to better effectuate the purpose of this major new law, in light of its legislative history and intent, which are also discussed in the paper.