Law Commons^™

A Prescription To Retire The Rhetoric Of "Principles-Based Systems" In Corporate Law, Securities Regulation, And Accounting, Lawrence A. Cunningham

Vanderbilt Law Review

This Article corrects widespread misconception about whether complex regulatory systems can be described fairly as either "rules-based" or "principles-based" (also called "standards-based'). Promiscuous use of these labels has proliferated in the years since the implosion of Enron Corp. Users show an increasing habit of celebrating systems dubbed principles-based and scorning those called rules-based. While the concepts of rules and principles (or standards) are useful to classify individual provisions, they are not scalable to the level of complex regulatory systems. The Article uses examples from corporate law, securities regulation, and accounting to illustrate this problematic phenomenon. To describe or design systems …

Stock Market, Corporations And Their Regulation: A Few Glimpses Into Reality, Palladam M. Vasudev

Palladam M Vasudev

The paper examines events in three public companies – Enron Corp., Sycamore Networks and Amazon.com, from the perspective of corporate law and securities law. The events are interpreted in terms of the applicable law, and explain how it influences them. In particular, the paper demonstrates how the prevailing loose legal regime for corporations and the stock market-centricity of corporate arrangements give rise to specific varieties of negative behaviour. The paper adopts a critical approach, and is an effort to describe the consequences of the minimalist philosophy underlying corporate and securities regulation.

Companies And Corporations: Their Transition From Status To Contract And Its Political Economy, Palladam M. Vasudev

Palladam M Vasudev

This article traces the state of corporate law in the English-speaking world since 1720, identifies the political economy of the changes that occurred since mid-nineteenth century, and the consequences for corporate law. During this period, there was a transition from the position that incorporation was a status to be conferred by the law to the position that they were the products of private contracts. In addition, they came to be treated as the property of their shareholders. These conceptual changes have had far-reaching consequences for the growth of corporations and were used to largely abandon the public regulation of corporations. …

Managers’ Fiduciary Duties In Financially Distressed Corporations: Chaos In Delaware (And Elsewhere), Rutheford B. Campbell Jr., Christopher W. Frost

Law Faculty Scholarly Articles

The inherent conflict between creditors and shareholders has long occupied courts and commentators interested in corporate governance. Creditors holding fixed claims to the corporation's assets generally prefer corporate decision making that minimizes the risk of firm failure. Shareholders, in contrast, have a greater appetite for risk, because, as residual owners, they reap the rewards of firm success while sharing the risk of loss with creditors.

Traditionally, this conflict is mediated by a governance structure that imposes a fiduciary duty on the corporation's managers-its officers and directors-to maximize the value of the shareholders' interests in the firm. In this traditional view, …

Corporate Governance, Director Liability, And Good Faith, Elizabeth Nowicki

Elizabeth Nowicki

Corporate directors are obligated to act “in good faith,” and directors face personal monetary liability to their shareholders for acts “not in good faith.” Yet no modern court has imposed liability accordingly. Every time the issue of a director’s good faith comes up in court, the court forces the complaining shareholder to prove that her directors acted affirmatively in bad faith as opposed to merely in the absence of good faith. The judiciary completely misses the point that acts lacking good faith are not always the same as acts affirmatively taken in bad faith. A director can act in the …

The Business Judgment Rule, Disclosure, And Executive Compensation, D. A. Jeremy Telman

Law Faculty Publications

Despite its ubiquity in corporate law, the business judgment rule remains a doctrinal puzzle. Both courts and scholars offer different understandings of the Rule's role in litigation brought against corporate directors and different justifications for its deployment to insulate such directors from liability for breaches of fiduciary duties. This Article rejects all existing justifications for the Rule and argues that the Rule is no longer needed to protect directors from liability either because the justifications offered never made any sense or because directors are now protected by other, statutory means. Rather, the Rule is needed today not to protect directors, …

How We Make Law In Delaware, And What To Expect From Us In The Future, Lawrence A. Hamermesh

Lawrence A. Hamermesh

No abstract provided.

The Criminalization Of Corporate Law, Lisa M. Fairfax

Faculty Scholarship

No abstract provided.

Criminalization Of Corporate Law: The Impact On Shareholders And Other Constituents, David K. Millon

Scholarly Articles

None available.

Merck Kgaa V. Integra Lifesciences I Ltd.: How Broad Can You Go? The Supreme Court Makes Room For Preclinical Research In The Drug Price Competition And Patent Term Restoration Act's Safe Harbor Provision, Lauren B. Willis

Journal of Business & Technology Law

No abstract provided.

On The Prospects Of Deterring Corporate Crime, Geraldine Szott Moohr

Journal of Business & Technology Law

No abstract provided.

Sarbanes-Oxley's Purported Over-Criminalization Of Corporate Offenders, Lisa H. Nicholson

Journal of Business & Technology Law

No abstract provided.

The Impact On Director And Officer Behavior, Douglas M. Branson

Journal of Business & Technology Law

No abstract provided.

The Impact On Shareholders And Other Constituents, Jill Fisch

Journal of Business & Technology Law

No abstract provided.

The Impact On Shareholders And Other Constituents, Brett Mcdonnell

Journal of Business & Technology Law

No abstract provided.

The Impact On Shareholders And Other Constituents, Jennifer O'Hare

Journal of Business & Technology Law

No abstract provided.

The Impact Of Criminal Sanctions On Corporate Misconduct, Peter Henning

Journal of Business & Technology Law

No abstract provided.

The Impact Of Criminal Sanctions On Corporate Misconduct, Ellen S. Podgor

Journal of Business & Technology Law

No abstract provided.

When Fragile Become Friable: Endemic Control Fraud As A Cause Of Economic Stagnation And Collapse, William K. Black

Book Chapters

Individual “control frauds” cause greater losses than all other property crime combined. They are financial super-predators. Control frauds are crimes by the head of state or CEO that use the nation or company as a “weapon.” Waves of “control fraud” can cause economic collapses, discredit institutions vital to governance, and erode trust. Fraud’s defining element is deceit – the criminal creates and then betrays trust. Fraud erodes trust. Endemic control fraud causes institutions and trust to crumble and produces economic stagnation.

Economic theory about fraud is underdeveloped, economists are not taught about fraud mechanisms, and economists minimize the incidence and …

Structural Reform Prosecution, Brandon L. Garrett

Faculty Scholarship

In what I call a structural reform prosecution, prosecutors secure the cooperation of an organization in adopting internal reforms. No scholars have considered the problem of prosecutors seeking structural reform remedies, perhaps because until recently organizational prosecutions were themselves infrequent. In the past few years, however, federal prosecutors adopted a bold new prosecutorial strategy under which dozens of leading corporations entered into demanding settlements, including AIG, American Online, Bristol-Myers Squibb Co., Computer Associates, HealthSouth, KPMG, MCI, Merrill Lynch & Co, Monsanto, and Time Warner. To situate the DOJ's latest strategy, I frame alternatives to the pursuit of structural reform remedies …

Corporate Deferred Prosecutions Through The Looking Glass Of Contract Policing, Candace Zierdt, Ellen S. Podgor

Kentucky Law Journal

No abstract provided.

Roundtable - The Criminalization Of Corporate Law - Foreword, Lisa M. Fairfax

Journal of Business & Technology Law

No abstract provided.

Hell Hath No Fury Like An Investor Scorned: Retribution, Deterrence, Restoration, And The Criminalization Of Securities Fraud Under Rule 10b-5, Joan Macleod Heminway

Journal of Business & Technology Law

No abstract provided.

The Perils Of Criminalizing Agency Costs, Larry E. Ribstein

Journal of Business & Technology Law

No abstract provided.

Criminalization Of Corporate Law, David Anders

Journal of Business & Technology Law

No abstract provided.

The Impact On Director And Officer Behavior, Donald Langevoort

Journal of Business & Technology Law

No abstract provided.

The Impact On Shareholders And Other Constituents, Christine Hurt

Journal of Business & Technology Law

No abstract provided.

The Impact Of Criminal Sanctions On Corporate Misconduct, Donna M. Nagy

Journal of Business & Technology Law

No abstract provided.

The Impact On Shareholders And Other Constituents, David Millon

Journal of Business & Technology Law

No abstract provided.

The Impact Of Criminal Sanctions On Corporate Misconduct, David Skeel Jr.

Journal of Business & Technology Law

No abstract provided.