Monthly Archives: December 2023

Securities and Derivative Litigation: Quarterly Update

Joni Jacobsen, Stuart Steinberg, and Melanie MacKay are Partners at Dechert LLP. This post is based on a Dechert memorandum by Ms. Jacobsen, Mr. Steinberg, Ms. MacKay, Vince Montoya-Armanios, and Vishan J. Patel.

With just one quarter remaining in 2023, securities and derivative litigation continues to develop with new standards being articulated or clarified, particularly by decisions within the Second Circuit:

  • The Second Circuit provided additional guidance regarding when statements of opinion may nevertheless be actionable; and
  • In Goldman, the Second Circuit instructed the district court to decertify a class thereby highlighting the need for a searching analysis of any mismatch between a generic alleged misrepresentation and a specific corrective disclosure at the class certification stage.

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Investor Alliances: The Infrastructure For Climate Stewardship

Amelia Miazad is a Professor at the UC Davis School of Law. This post is based on her recent paper. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance (discussed on the Forum here) by Lucian A. Bebchuk and Roberto Tallarita; Companies Should Maximize Shareholder Welfare Not Market Value (discussed on the Forum here) by Oliver Hart and Luigi Zingales; How Much Do Investors Care about Social Responsibility? (discussed on the Forum here) by Scott Hirst, Kobi Kastiel, and Tamar Kricheli‐Katz; and The Limits of Portfolio Primacy (discussed on the Forum here) by Roberto Tallarita.

Investors have switched from competition to collaboration to combat climate change. In a new article, I describe the reasons for this shift, and offer the first in-depth analysis of how investor climate alliances facilitate collaborative climate stewardship.

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Weekly Roundup: December 8-14, 2023


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This roundup contains a collection of the posts published on the Forum during the week of December 7-13, 2023

Remarks by Chair Gensler Before the American Bar Association



Reporting Beneficial Owners Under the Corporate Transparency Act



The Cost of Private Fund Regulation


The Social Cost of Investor Distraction: Evidence from Institutional Cross-Blockholding




2023 Equity Proposal Trends in the U.S. and Canada


Profiting from Pollution


Statement by Chair Gensler on PCAOB 2024 Budget


Statement by Chair Gensler on PCAOB 2024 Budget

Gary Gensler is Chair of the U.S. Securities and Exchange Commission. This post is based on his recent statement. The views expressed in this post are those of Chair Gensler, and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Today, the Commission is voting to approve the 2024 budget of the Public Company Accounting Oversight Board (PCAOB). I support this $385 million budget—supporting a modest two percent increase in headcount—because of the important role the PCAOB plays in protecting investors and facilitating capital formation.

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Profiting from Pollution

Nathan Atkinson is Assistant Professor at the University of Wisconsin Law School. This post is based on his recent article that was published in the Yale Journal on Regulation.

In 2015, the Environmental Protection Agency entered a settlement with ASARCO LLC for violations of the Clean Air Act at a copper smelting plant in Hayden, Arizona. ASARCO was required to spend an estimated $150 million to come into compliance with regulations that ASARCO had been in violation of since 2005. Moreover, the firm had to pay a $4.5 million penalty, and was required to spend $9 million on supplementary projects including paving a local county road and performing lead-based paint abatement in nearby towns.

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2023 Equity Proposal Trends in the U.S. and Canada

Maria Vu is Senior Director of Executive Compensation Research, Lisa-Marie O’Malley is Lead Analyst, and Brandon Pak is Research Analyst at Glass, Lewis & Co. This post is based on a Glass Lewis article by Ms. Vu, Ms. O’Malley, Mr. Pak, Oren Lida, and Krishna Shah.

Executive compensation continues to be an area of great interest to investors as companies seek to align the long-term interests of management and shareholders. During the 2023 proxy season in North America there was a surge of shareholder opposition on equity plans, with a rare failure in Canada and a significant rise in failures among U.S. companies.

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Delaware Law Requires Directors to Manage the Corporation for the Benefit of its Stockholders and the Absurdity of Denying It

Robert T. Miller is the F. Arnold Daum Chair in Corporate Finance and Law and the Associate Dean for Faculty Development at the University of Iowa College of Law. This post is based on his recent paper forthcoming in the Journal of Corporation Law and is part of the Delaware law series; links to other posts in the series are available here. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance (discussed on the Forum here) by Lucian A. Bebchuk and Roberto Tallarita; Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American Economy – A Reply to Professor Rock (discussed on the Forum here) by Leo E. Strine Jr.; and Does Enlightened Shareholder Value Add Value? (discussed on the Forum here) by Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita.

In a new article posted on SSRN and forthcoming in the Journal of Corporation Law, I address what I take to be a minor intellectual scandal. To wit, for decades, eminent law professors have been publishing scholarly articles claiming that Delaware law permits directors to promote the interests of non-stockholder constituencies even if doing so harms stockholders in the long term (or, at least, that Delaware law is unclear on whether directors may do this). But as all competent Delaware lawyers know, and as numerous scholars have pointed out, this is clearly wrong. In Delaware, the standard of conduct requires that, in making a business decision, directors act for the purpose of promoting the value of the corporation for the benefit of the stockholders in the long term and for no other purpose. The Delaware Supreme Court and the Delaware Court of Chancery have said this so often, so consistently and so clearly (and leading treatises on Delaware law so plainly confirm the point) that any lawyer who advised a client otherwise would undoubtedly be committing legal malpractice.

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Post-Doctoral Corporate Governance Fellowships For Finance, Economics, and Accounting Researchers


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The Program on Corporate Governance at Harvard Law School (HLS) is seeking applications for Corporate Governance Post Doctoral Fellowships from highly qualified candidates with graduate training in finance, economics, or accounting.

Applications are considered on a rolling basis, and the start date is flexible. Appointments are for one year but the appointment period can be extended for additional one-year period/s (contingent on business needs and funding as are other Program positions).

To be eligible to apply candidates should (i) have a J.D., LL.M., or S.J.D. from a U.S. law school, (ii) by the time they commence their fellowship, (ii) be pursuing an S.J.D. at a US law school, provided that they have completed their program’s coursework requirements by the time they start, or (iii) have a doctoral degree in law, or have completed much of the work toward such a degree, in a law school outside the U.S.

During the term of their appointment, Fellows will be in residence at HLS. They will be required to devote part of their time to work on research projects of the Program, depending on their skills, interests, and Program needs. Fellows will also be able to spend significant time on their own projects. The position will provide a competitive fellowship salary and Harvard University benefits.

Interested candidates should submit to [email protected] a CV; graduate program transcripts; any research papers they have written; and a cover letter. The cover letter should describe the candidate’s experience, reasons for seeking the position, career plans, and the period during which they would like to work with the Program.

The Social Cost of Investor Distraction: Evidence from Institutional Cross-Blockholding

Vivek Astvansh is an Associate Professor of Quantitative Marketing and Analytics at McGill University’s Desautels Faculty of Management. Tao Chen is an Associate Professor in Finance at Nanyang Business School, Singapore. Jimmy “Chengyuan” Qu earned his Ph.D. in Finance from Nanyang Business School, Singapore. This post is based on their recent paper. Related research from the Program on Corporate Governance includes Index Funds and the Future of Corporate Governance: Theory, Evidence and Policy (discussed on the Forum here) by Lucian A. Bebchuk and Scott Hirst; New Evidence, Proofs, and Legal Theories on Horizontal Shareholding (discussed on the Forum here); and Horizontal Shareholding (discussed on the Forum here) both by Einer Elhauge.

The world is becoming richer. Not in resources but in the stimuli it offers to individuals and organizations. Consequently, we are living in the attention economy—that is, attention is becoming increasingly scarce, and we ought to preserve it, lest we distract ourselves away from events that truly matter.

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The Cost of Private Fund Regulation

Ben Bates is a Research Fellow at the Harvard Law School Program on Corporate Governance. This post is based on his recent paper. Related research from the Program on Corporate Governance includes The Long-Term Effects of Hedge Fund Activism (discussed on the Forum here) by Lucian A. Bebchuk, Alon Brav, and Wei Jiang; Dancing with Activists (discussed on the Forum here) by Lucian A. Bebchuk, Alon Brav, Wei Jiang, and Thomas Keusch; and Who Bleeds When the Wolves Bite? A Flesh-and-Blood Perspective on Hedge Fund Activism and Our Strange Corporate Governance System (discussed on the Forum here) by Leo E. Strine, Jr.

The Dodd-Frank Act, passed in 2010, directed the SEC to tighten the reins on private equity and hedge fund advisers by setting up a monitoring and reporting system. When the SEC proposed new rules to implement the Act’s mandate, it triggered a wave of criticism. The SEC had predicted that advisers would spend only an additional $25,000 to $65,000 per year on compliance costs (SEC Release No. IA-3222, pp. 151 – 52), but the advisers themselves complained that, in reality, complying with the new regulations would cost them hundreds of thousands of dollars per year and have a negative impact on their business.

The huge gap between the SEC’s and advisers’ cost estimates is concerning because the SEC routinely justifies its rules on cost-benefit grounds. If the SEC is naïve about how burdensome its rules are, it risks overregulated and slowing down economic growth. On the other hand, it is hard to know how much to trust industry members’ cost estimates. After all, they have an incentive to exaggerate to convince the SEC to loosen up its regulations.

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