The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Wed, 08 Apr 2026 11:32:13 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Further Recognition of the Adverse Effects of Activist Hedge Funds – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Further Recognition of the Adverse Effects of Activist Hedge Funds https://corpgov.law.harvard.edu/2015/04/11/further-recognition-of-the-adverse-effects-of-activist-hedge-funds/?utm_source=rss&utm_medium=rss&utm_campaign=further-recognition-of-the-adverse-effects-of-activist-hedge-funds https://corpgov.law.harvard.edu/2015/04/11/further-recognition-of-the-adverse-effects-of-activist-hedge-funds/#comments Sat, 11 Apr 2015 13:00:56 +0000 https://corpgov.law.harvard.edu/?p=70684?d=20150411085105EDT Posted by Martin Lipton, Wachtell, Lipton, Rosen & Katz, on Saturday, April 11, 2015
Editor's Note:

Martin Lipton is a founding partner of Wachtell, Lipton, Rosen & Katz, specializing in mergers and acquisitions and matters affecting corporate policy and strategy. This post is based on a Wachtell Lipton memorandum by Mr. Lipton. Earlier posts by Mr. Lipton on hedge fund activism are available here, here, here, and here. Recent work from the Program on Corporate Governance about hedge fund activism includes The Long-Term Effects of Hedge Fund Activism by Lucian Bebchuk, Alon Brav, and Wei Jiang (discussed on the Forum here) and The Myth that Insulating Boards Serves Long-Term Value by Lucian Bebchuk (discussed on the Forum here). For five posts by Mr. Lipton criticizing the Bebchuk-Brav-Jiang paper, and for three posts by the authors replying to Mr. Lipton’s criticism, see here.

Despite the continued support of attacks by activist hedge funds by the Chair of the SEC, and many “Chicago school” academics who continue to rely on discredited statistics, there is growing recognition by institutional investors and prominent “new school” economists of the threat to corporations and their shareholders and to the economy of these attacks and the concomitant short-termism they create.

In a “must read,” March 31, 2015 letter to the CEOs of public companies, Laurence Fink, Chairman of BlackRock and one of the earliest to recognize the danger from attacks by activist hedge funds, wrote:

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